The Missing Middle
Microfinance is often the key to success for micro-entrepreneurs in developing and emerging countries. But what happens when these businesses grow into small and medium-sized enterprises? Then there is often a lack of follow-up financing, as the financial requirements are too large for microfinance institutions and too small for traditional commercial banks.
The IIV Sustainable SME Debt Fund EM – Finance for Future provides unsecuritized loan receivables to selected financial institutions in developing and emerging countries that focus on financing small and medium-sized enterprises (SMEs for short). Through the fund, you can make a comprehensive contribution to the Sustainable Development Goals (SDGs) of the United Nations – primarily SDGs 8, 9 and 10.
Small and medium-sized Enterprises
600 million new jobs need to be created in the developing and emerging countries by 2030 in order to feed the the growing population. SMEs play an important role as the economic backbone of society. They create jobs and help people achieve greater financial security. However, according to the World Bank, they lack financing capital of around 4.5 trillion US dollars. In developing and emerging countries, 44 percent of all SMEs – no less than nine million companies – have insufficient access to the capital market.
This is where our idea comes in: The fund helps to close this financing gap in these countries. This is to be achieved through the refinancing of financial institutions that grant loans to SMEs.
The selected financial institutions are thoroughly analyzed by us as the fund’s outsourced financial portfolio manager with respect to ESG factors and financial ratios.
- Loan amount max. 10 percent of assets under management or max. 50 percent of equity of the financial institution/bank
- Market-based interest rates for local financial institutions and SMEs.
In selecting SMEs, the financial institutions are required to consider qualitative criteria of SDGs 8, 9 and 10 as well as quantitative criteria.
- Loan size to the sub-borrower/SME (between USD 50.000 and USD 2.000.000).
- Size of the SME supported (10 to 250 employees).
IIV Sustainable SME Debt Fund EM – Finance for Future
|The fund is classified as a sustainable financial product under Article 9 of the EU Sustainable Finance Disclosure Regulation.|
|Fund Type Legal (KAGB)||Special fund/open special AIF with fixed investment conditions|
|Currency Share Class||EUR|
|Investment Instruments||Unsecuritized loan receivables|
|WKN/ISIN||A3C548 / DE000A3C54891|
|Minimum Investment||EUR 200,000|
|Launch Date||July 1, 2022|
|Issue of Shares||Monthly at the end of the month|
|Redemption of Shares||Period of 12 months before the end of the fiscal year. In the event of unit redemption before the end of 36 months from the date of a unit purchase, a redemption fee of 2.5 % of the unit value will be charged and credited to the special AIF.|
|Administration Fee||0.5 % p.a. ¹|
|Capital Management Company||HANSAINVEST Hanseatische Investment-GmbH|
|Fund Manager||Invest in Visions GmbH|
|Custodian||Donner & Reuschel AG|
- 1 This seed share class is to be closed at a volume of EUR 100 million or after three years at the latest. Further inflows of funds will then take place in a newly launched unit class.
- Low correlation to other asset classes
- Low volatility
- Portfolio diversification
- Social return
- Country and contraction risks
- Credit and interest rate risks
- Limited liquidity
- Currency risks
How SME Financing can work
Learn more about the success stories of borrowers.