The TSF component began in 2007 as a Locfund’s investors initiative that included non-reimbursable funds for its clients, in order to reinforce its management in the assets and liabilities management and other type of risks, as well as new activities y products that the market may request.

Sub components of the TSF

Digital transformation. To increase the financial inclusion through the use of technology and digitalization of financial services, improving and streamlining the MFI’s processes, thus services provided to final clients.

Assets and Liability Management and Internal Control: that aims to reinforce decision making processes in the finance area. Additionally, improving the internal control of main MFI’s processes through a workshop. The outreach of this activity includes: liquidity, term gap, interest rate risk, FX risk, etc.

Risks. It consists in coaching sessions designed to specific situations and requirement of the MFI. It aims to minimize specific risks that may affect the MFI. Some examples are: saving mobilization, credit technology, cost matrix and profitability, risk management reinforcement, etc.

Knowledge dissemination. In order to spread knowledge material and theorical/practical experiences adapted to the microfinance industry of the region. The TSF organizes seminars, workshops, develops guidelines, tools and learning documents..

Environmental, Social and Corporate Governance (ESG) management. In order to develop and improve the ESG management of the MFIs. Some examples of activities financed by the MFIs are: green products development/improvement, climate change prevention, financial inclusion for vulnerable groups.

Capital Markets: in order to support MFIs to participate in the Local Capital Markets, Locfund provides support in the following topics: diagnosis, partial cost cover of both credit rating and structuring, etc.

Lessons learned report of the participation of the MFIs in the local capital market

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• SECO – State Secretariat For Economic Affairs
• NORFUND – the Norwegian Investment Fund for Developing Countries
• BIO – Belgian Investment Company for Developing Countries NV/SA
• FMO – Netherlands Development Finance Company
• IDB – Inter-American Development Bank