NMI Global Fund invests primarily in MIVs managed by Established MIV Managers. "Established MIV Managers" are those who have previously managed MIVs and who have a demonstrable track record and experience. At 31 December 2010, the NMI Global Fund had invested in seven MIVs with seven different MIV Managers. The Global Fund's total commitment to these MIVs is USD 38.9 million and the total capitalization of these MIVs is approximately USD 664 million. The MIV Managers managing these vehicles have together more than USD 2.2 billion in assets under management and represent many of the largest and most experienced microfinance industry fund managers and investors. Table 1 sets forth each of the MIVs in which the NMI Global Fund has invested, along with selected information about each MIV.
The Global Fund invests in MIVs that invest primarily in Established MFIs. "Established MFIs" are those with large and sustainable operations. They will generally have a significant branch network, skilled and professional staff, and a large client base. They will have a proven ability to attract and utilize investment capital from domestic and international capital markets and to work closely with institutional investors. NMI Global Fund MIVs may also include Emerging MFIs in their portfolio, and the Global Fund may also make a limited number of direct investments in Established MFIs.
NMI Global Fund supports the growth and expansion of Established MFIs. It is expected that investments in these MFIs through Portfolio MIVs will help the MFIs to increase their market penetration, expand into new markets, and develop new and innovative products and services. The Global Fund seeks to have a balanced distribution of Debt and Equity investments in its Portfolio MIVs. Its investment size range is between USD 3 million and USD 8 million. While the NMI Global Fund strongly focuses its investments on Africa, Asia and Latin America, it is not limited to these regions exclusively.
For the NMI Global Fund, identifying and working with the best international, regional, and specialized MIV Managers is critical. In 2010, the Fund invested in several regionally oriented MIVs, including the India Financial Inclusion Fund, the Regional MSME Investment Fund for Sub-Saharan Africa, and the Micro-finance Growth Fund for Latin America. In addition, Rural Impulse Fund II is a specialized MIV focused on MFIs with a "high rural presence" in Africa, Asia, and Latin America. ShoreCap II is focused exclusively on regulated MFIs and Small Business Banks in Africa and Asia. The DWM Microfinance Fund and the Triodos Microfinance Fund, by contrast, follow broader MFI investment strategies providing both Debt and Equity investments to mature and emerging MFIs on a global basis. For more information, see NMI Global Fund Investments
At 31 December 2010, the Portfolio MIVs of the Global Fund had invested more than USD 198 million in 77 MFIs. These MFIs were located in 33 countries and reached more than 11 million customers. Women constituted more than 80% of these customers, and over 40% of the borrowers lived in rural areas. The aggregate Gross Loan Portfolio outstanding for these MFIs was nearly USD 6.8 billion, and the average Loan Size was USD 593. Average yield on this Portfolio was 34% and the PAR > 30 days was 5.8%. Excluding one MFI with significant exposure to Andhra Pradesh in India, the PAR > 30 was 2.7%. More than 90 % of these loans were reportedly used for income generating purposes. Table 2 sets forth selected financial and operational data for the MFIs in which the Portfolio MIVs of the Global Fund invested in 2010.
While it is not possible to summarize in this brief Report the extensive impact and activities of the many MFIs in which the NMI Global Fund MIVs have invested, below are set forth two indicative "success stories" about the clients of these MFIs, one from Jordan in the Middle East and the other from Bolivia in Latin America.
- DWM Microfinance Fund: Tamam Fraije's Honey Business in Jordan
- Microfinance Growth Fund: Flora Callisaya’s Dishware Business in Bolivia
In addition, Boxes 1 and 2 below contain excerpts from the Annual Newsletter of the Parinaam Foundation. This Foundation was established by Ujjivan, an MFI in the IFIF portfolio, in March 2008 to provide social services (including health care, vocational training, and sustainable livelihood development) for the poor and "ultra poor" in urban markets that Ujjivan is serving in India. As Ujjivan's "strategic partner," Parinaam has delivered "multi-dimensional initiatives" to Ujjivan clients and their families and thus represents a creative and innovative "Microfinance Plus" model that provides a broad range of social services to traditional microcredit clients while also reaching the "ultra poor" and helping them to become microcredit borrowers.