FMO and Oikocredit creating opportunities in low income countries
Dutch development bank FMO and Oikocredit have launched a €10 million fund to create business opportunities in low income countries. By providing access to finance, the Low Income Countries (LIC) Fund aims to support micro and small entrepreneurs in countries recognized by the United Nations as low income.
With this fund, FMO and Oikocredit will invest predominantly in Central and Southern African countries through rural-based microfinance institutions and small and medium-sized enterprises (SMEs).
A joint investment
Both FMO and Oikocredit will put €5 million towards the fund. Microfinance institutions providing financial services to micro and small entrepreneurs will receive 75% of the loans and the remainder will be used for SME funding. Oikocredit, with its vast network of local offices and expertise in rural expertise, will act as fund manager.
Focus on micro and small entrepreneurs
Ben Simmes, Managing Director at Oikocredit: “While FMO invests large amounts in microfinance institutions mainly active in urban areas, Oikocredit invests smaller amounts and provides funding to the relatively smaller microfinance institutions with a strong focus on rural regions.
Together, we aim to provide micro and small entrepreneurs in the world’s poorest countries with access to finance. The LIC Loan Fund fits Oikocredit’s strategy to expand its portfolio in Africa.”
Responding to business expansion needs
Maurice Scheepens, Investment Officer at FMO: “The interesting aspect of this concept is its ability to cater for the needs of growing companies. Once the fund has provided its support to companies at the bottom of the pyramid, the respective companies can qualify for a ‘regular’ Oikocredit loan and subsequently for a larger facility from FMO.
Thereafter, the company is well qualified for support from commercial banks. This way, Oikocredit and FMO optimally combine the strengths of their organizations.”
With the launch of the LIC Loan Fund, FMO and Oikocredit extend their cooperation in inclusive finance. Both organizations are shareholders in a number of MFIs and Oikocredit has a stake in The Currency Exchange Fund (TCX), co-founded by FMO.
Mr Paul Hartogsveld
+31 (0)6 39 44 72 88
- Oikocredit International
Ms Kawien Ziedses des Plantes
+31 (0)6 272 549 04.
Oikocredit is one of the world’s largest sources of private funding to the microfinance sector. It provides credit and equity to small businesses through microfinance institutions across the developing world and directly to trade cooperatives, fair trade organizations and SMEs. Oikocredit is privately financed.
The Netherlands Development Finance Company (FMO) is the bilateral private sector development bank of the Netherlands. FMO invests in the private sector, which can serve as an engine of sustainable growth in developing markets. To this end, it provides capital, knowledge and partnerships to ambitious entrepreneurs.
With an investment portfolio of €5.9 billion, FMO is one of the largest bilateral private sector development banks worldwide.
It focuses on three sectors which create a high development impact:
- financial institutions
- energy and agribusiness
- food & water
This focus enables FMO to offer tailor-made finance solutions, based on real expertise. In other sectors, FMO teams up with renowned partners to combine local networks, knowledge and experience.
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