IFC to roll out $100m microfinance debt fund
International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, will set up a $100 million debt fund to meet the funding needs of microfinance institutions in emerging economies.
The fund, named Micro Finance Initiative for Asia (MIFA), will be funded by IFC, KfW and the German Federal Ministry for Economic Cooperation and Development, according to VCCircle. The final decision will be taken at the fund's next board meeting, to be held on April 9.
The news comes after an agreement was signed between IFC and KfW in 2007, which agreed that MIFA, together with other partners, would provide up to $1 billion over three years to support microfinance institutions in Asia through debt and equity investments, structured finance and advisory services.
IFC's investment in the fund is proposed to be up to $20 million in mezzanine shares. MIFA Find will set up special purpose vehicles in Mauritius and India and make debt investments across Asia.
The project is said to be in line with IFC's microfinance strategy for increasing outreach in South, East and Central Asia, especially in India and China. Microfinance penetration rates in this region remain among the lowest globally.
Investments made by the fund will support the expansion and sustainability of well-performing microfinance institutions, with an aim to stimulate growth and employment in the region.
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