LOCFUND

| Description

LOCFUND LP is a Local Currency Fund specialized in loans to microfinancing institutions in Latin America and the Caribbean. The fund started operating in 2007 and it completed its work in March of 2015. This fund was managed by BIM Ltd., an impact investments manager based out of Bolivia, with offices in Costa Rica, Peru and Nicaragua. LOCFUND LP promoted the development of the microfinance industry throughout the region through local currencies loans, which helped MFI’s reduce their currency exchange risk, which in turn helped them prevent the transference of such risk to their own clients. Additionally, through its Technical Assistance Component (LOCFUND-TSF) the fund was able to support MFI’s in the development of many areas by financing consultancies entirely or partially.

Key elements that allowed the positive results and impact LOCFUND had, include:

  • Local currency loans and therefore exchange rate risk management.
  • Prioritizing funding to small and mid-size MFI’s that have limited access to capital markets.
  • Providing technical assistance in the areas of Asset and Liability Management, as well as risk management.
  • Investors and managers committed to the development of the microfinance industry in the region.
  • Local presence, through BIM’s offices in Bolivia, Peru, Costa Rica and Nicaragua.
  • BIM’s experience as part of the Panamerican Investments holding, which has over $US 500 million AUM.

LOCFUND provided services to 45 MFI’s, which in turn provided support to more than 900,000 final clients in 13 countries in Latin America and the Caribbean. Out of the total, more than 50% were women, and approximately 44% came from rural areas. During its 8 years of existence, LOCFUND executed 99 loan operations, totaling $US 69 million disbursed.

| Investors

  • BID/FOMIN
  • FMO
  • NORFUND
  • CAF
  • ResponsAbility
  • Gray Ghost
  • BIO
  • Hyos Invest Holding

| Main Figures

Upon the completion of the investment period (December 2013), LOCFUND had disbursed the equivalent of USD 69.2 million in 99 local currency loans to 45 microfinance institutions in 13 countries in Latin America and the Caribbean, resulting in a total of 92,521 loans to end clients of these institutions. Initially, many of the microfinance institutions did not have access to funding sources, and LOCFUND helped them attract other funders and thus gain access to various financial markets. In addition, with the collaboration of LOCFUND-TSF, more than 100 technical assistances were provided to microfinance institutions, in addition to workshops, seminars and other types of support.

| LOCFUND: disbursements

LOCFUND: Number of disbursements

LOCFUND had operations in several MFI’s in 13 countries in Latin America and the Caribbean. Among these, the ones with the most activity were Peru, Ecuador, Bolivia, Honduras and the Dominican Republic. This was directly related to the development of the microfinance industry in these countries. On the other hand, the expansion of this spectrum to more countries in the region remains a goal for future investment vehicles.

LOCFUND: Disbursements per Country

During its existence, LOCFUND was able to develop skills to detect, evaluate, approve and disburse 15 annual loans to MFI in Latin America and the Caribbean.

The number of small business owners benefited by MFI’s under LOCFUND’s umbrella reached 1,856,552. Out of this number, 92,521 of them directly received funds from LOCFUND.

LOCFUND: Assisted Final Clients

Out of the total final clients reached by LOCFUND, 60% were women and 50% came from rural areas. In addition to this, the average loan provided by LOCFUND-funded MFI’s stood at around $US 1,000, providing evidence of the commitment the institutions have with low-income clients and the success of LOCFUND’s social goals.