The TSF component was launched on 2007 as an initiative from Locfund’s investors that included non-reimbursable funds for its clients, in order to reinforce its assets and liabilities management and other type of risks, as well as new activities y products that the market may request. Up to date, the TSF has had 7 phases for a total of USD4.2 MM, out of which 5 have successfully concluded with a 100% of execution and 2 that are still ongoing.

Sub components of the TSF

Digital transformation. To increase the financial inclusion through the use of technology and digitalization of financial services, by improving the MFI’s processes, as well as services provided to final clients. Some examples are: Roadmap development, Digital Onboarding, digitization of internal processes, etc.

Assets and Liability Management and Internal Control: Aims to reinforce decision making processes in the finance area and optimize the internal control of main processes through a workshop called “Risks and internal control”. 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. Locfund organizes seminars, workshops, develops guidelines, tools and learning documents.

Environmental, Social and Corporate Governance (ESG) management. In relates to the development and improvement of ESG management of the MFIs. Some examples of activities financed by the MFI are: Green products development/improvement, Climate change prevention, financial inclusion for vulnerable groups, etc.

Capital Markets: in order to spread knowledge material and theorical/practical experiences adapted to the microfinance industry of the region. Locfund organizes seminars, workshops, develops guidelines, tools and learning documents.

Climate and Gender. It consists of developing key strategies and tools to improve the performance of MFIs with a gender and climate focus. Some examples of activities are: Development of a gender policy, Development of an environmental and social risk management system (ESMS), Climate change prevention tool, etc.

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

Download 1,33 Mb

• 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
• OeEB – Austrian Development Bank
• DFC – U.S. International Development Finance Corporation