From Microrate:

January 12, 2012, Washington D.C. – On December 20, 2011, MicroRate, with the support of LuxFLAG and the Grand Duchy of Luxembourg, launched Luminis™ the first web-based, analytical platform focused on microfinance funds, also known as microfinance investment vehicles (MIVs).

With the success of microfinance and the growing interest in impact investments that deliver both financial returns and social impact, there has been a dramatic increase in the number of global funds that invest in microfinance institutions (MFIs). Until now, there was no single resource to assist investors in identifying and analyzing the wide range of investment options in this growing category of socially responsible investments.

Responding to this need, MicroRate’s team of microfinance and capital market analysts developed a proprietary approach to analyzing impact investment funds, called PRSM™, to assess the funds’ performance, risk, social, and management components. This in-depth analysis forms the core of Luminis, which also provides investors with search and comparison tools, detailed fund profiles and reports, research, and relevant market news.

“MicroRate’s core mission has always been to facilitate the flow of capital-market funding to microfinance to promote the long-term sustainability of this poverty-alleviation tool,” stated Damian von Stauffenberg, founder and chairman of MicroRate. “Since 1996, MicroRate has rated MFIs to achieve this goal. Luminis will now provide unprecedented transparency on the investment-fund level, which will further develop the microfinance industry.”

The current Beta version of the Luminis site includes basic profiles on over 80 MIVs. Users can also preview samples of detailed fund profiles and reports that will be part of the full-release version of the site which is scheduled to launch in the first quarter of 2012.

“Luminis would not be possible without the cooperation of forward-thinking MIV managers, who have agreed to contribute the data that enable us to deliver clear and comprehensive reports to the investment community,” stated Luis A. Viada, Executive VP of MicroRate and Luminis Director. “Already capital markets investors have responded positively to the Luminis approach and see it as a key tool in researching and differentiating among social investment funds.”

According to Kenneth Hay, Chairman of LuxFLAG “We see the launch of Luminis as a critical step forward, providing the detailed and reliable industry information necessary for investors to evaluate MIVs as a valid impact investment option and a potential alternative asset class producing both financial and social returns.” Of the funds featured on Luminis, 15 hold the LuxFLAG Microfinance Label.

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Luminis Background
The critical need to create transparency on microfinance investment vehicles (MIVs) was recognized both by MicroRate and the Grand Duchy of Luxembourg who together in May 2010 signed a collaboration agreement providing public seed capital, through the Luxembourg labeling service, LuxFLAG, to help launch Luminis.

Each of the parties is a leader in the field of microfinance investments, which made the initiative a natural alliance. The Grand Duchy of Luxembourg is a staunch advocate of microfinance and hosts the largest number of MIVs of any global financial center. MicroRate has a long-standing and respected reputation as the premier rating agency of microfinance institutions (MFIs). It is also the industry leader in microfinance investment vehicle evaluation.

Luminis is a service of MicroRate which developed the Luminis approach and is solely responsible for providing the analysis, deliberation, conclusions and opinions reflected in all reporting.

About MicroRate (www.microrate.com)
MicroRate is the first microfinance rating agency dedicated to evaluating performance and risk in microfinance institutions (MFIs) and microfinance funds, also known as microfinance investment vehicles (MIVs). As the oldest and most well-respected organization of its kind, MicroRate has conducted over 600 ratings of 200+ MFIs throughout Latin America, Africa, Europe, and Central Asia. MicroRate is a leading social rater and has also become the largest MIV evaluator in the industry.

About LuxFLAG (www.luxflag.org)
The LUXEMBOURG FUND LABELLING AGENCY (LuxFLAG) is an independent, non-profit-making association created in Luxembourg in July 2006. LuxFLAG supports the financing of sustainable development by providing clarity for investors through awarding its Labels to eligible Microfinance Investment Vehicles (MIVs) and Environment-related Investment Vehicles (EIVs). Its objective is to reassure investors that the labelled investment fund invests most of its assets, directly or indirectly, in the microfinance or environment sectors. The MIV/EIV may be domiciled in any jurisdiction that is subject to a level of national supervision equivalent to that available in European Union countries.

Founded by Matt Damon, Water.org is a non-profit organization that has transformed thousands of communities in Africa, South Asia, and Central America by providing access to safe water and sanitation over the past 21 years. We’ve written about it here a couple times on myKRO over the past couple years, which is why I was excited to see that the Caterpillar Foundation, the philanthropic arm of Caterpillar Inc, announced a $3 million partnership to reach more than 218,000 people with clean water and sanitation over the next three years. The program will support a significant expansion of Water.org’s WaterCredit activities in India, and also fund a market assessment to explore the launch of WaterCredit in Indonesia for the first time. WaterCredit facilitates small loans for water and sanitation access for people living in poverty without access to these most basic necessities. A successful, market-based solution, WaterCredit is accelerating large-scale, sustainable progress against the water and sanitation crisis. Read more about this great partnership at Water.org

MicroRate.com recently released their State of Microfinance Investment 2011 report. Here are a few key findings from the press release:

• Low-priced, domestic funding in key countries has been crowding out foreign private capital.
• Latin America & the Caribbean is now in second place behind Europe/Central Asia in terms of the geographic investment distribution – receiving 35% and 37% respectively of total MIV investments.
• Top fund executives predict growth rates of 20-30% for the remainder of 2011 and into 2012.
• Both MFIs and MIVs are giving increasing priority to social performance.

More information:

• Download the Report HERE (PDF)
• Press Release (PDF)

I came across a an article in OptimistWorld that talked about OneSeed Expeditions, a social startup that uses travel to fund women entrepreneurs in the developing world.  I was instantly a huge fan of the new startup, so I thought I would write something up about it:

What is OneSeed?
OneSeed Expeditions was founded in 2010 by Chris Baker, Bishnu Thapa, and Tek Bahadur Dong after more than three years of planning and preparation. Conceived as a social enterprise with a sustainable revenue stream, OneSeed Expeditions grew directly out of the research and work experience of its founders. OneSeed’s founders bring a unique mix of mountain guiding, ethnographic fieldwork, and non-profit skills to the start-up team. We try to keep it pretty simple:  you take an amazing trip; a local entrepreneur launches or expands their small business. We aim to change the way that travel impacts local communities.  We’ve all seen the negative side of tourism, but what happens when you take the power of travel and harness it to fund creative entrepreneurs?  Answering that question is what OneSeed is all about.

OneSeed Expeditions | Exploring the world. Investing in People. from OneSeed Expeditions on Vimeo.

To get more information about what OneSeed does and who they are, visit their website  or read their blog

Read online: http://www.globalpartnerships.org/sections/newsinfo/newsinfo_nr_SustainableHarvest.htm

Seattle, Wash., - Global Partnerships, a Seattle-based nonprofit investor, and Sustainable Harvest, a Portland-based specialty coffee importer, announced today that they have collaborated on an innovative loan product to two fair-trade coffee cooperatives in Latin America: Aprocassi, a cooperative of small-scale coffee growers in Cajamarca, Peru; and Café y Desarrollo/REDCAFES, an association of coffee cooperatives in Mexico serving small landholder farmers. The loans, which were made by Global Partnerships and fully secured by coffee sales contracts from Sustainable Harvest, are helping provide much-needed flexible financing to the region’s small-scale coffee growers.

“With the help of Sustainable Harvest’s support and expertise, we have created and executed a loan product that is finely attuned to the needs of Latin American coffee farmers,” said Mark Coffey, Global Partnerships’ Chief Investment Officer. “The collaboration reflects our shared commitment to helping underserved populations in Latin America increase their income and improve their lives.”

“We are excited to work with Global Partnerships on this new opportunity to support sustainable smallholder coffee cooperatives in Latin America,” said David Griswold, President and Founder of Sustainable Harvest. “Our partnership is facilitating access to credit for coffee farmers in many remote communities, enabling them to increase their household income and build their assets by selling specialty coffee to the global market. Together we can demonstrate it is possible to stimulate economic growth, social impact, and environmental stewardship in rural farming communities.”

Global Partnerships (GP) finalized and disbursed the loans to Aprocassi and Café y Desarrollo/REDCAFES in July 2011, and March 2011, for $465,000 and $498,000, respectively. The loans’ structure includes two innovative components. First, both loans are secured by coffee sales contracts signed between each cooperative and Sustainable Harvest, which means that Sustainable Harvest has agreed that it will purchase a certain amount and standard of coffee from the cooperatives and that it will repay Global Partnerships once the coffee shipment is made. This reduces the risk of default for Global Partnerships and its investors.

Second, the loan terms allow the cooperatives to receive an initial disbursement, pay down the loan as coffee is shipped and then receive additional disbursements from Global Partnerships without going through an additional closing process. This lowers costs for the cooperatives and allows them to provide more flexible terms to its members, such as providing much-needed credit before the coffee harvest cycle, when farmers need to purchase inputs such as seeds and fertilizer as well as pay living expenses.

GP made the two loans from its fourth fund, Social Investment Fund 2010, a $25 million debt fund that loans capital at low cost to a select portfolio of microfinance institutions and cooperatives that have both a sustainable business model and display an exceptional commitment to improving the lives of their borrowers.

The two organizations are strong examples of the type of partners GP seeks. They provide not only low-cost credit to members but also a range of other services that help members increase their income and improve their lives, including access to coffee importers such as Sustainable Harvest; help with fair-trade and organic certification; access to lower-cost inputs such as fertilizer and coffee processing services; guidance on productivity-boosting techniques; and social programs such as health education.

The cooperatives associated with Café y Desarollo/REDCAFES operate in five of the poorest states in Mexico, Veracruz, Puebla, Oaxaca, Guerrero and Chiapas. One hundred percent of its 1,500 members are fair trade certified, and 80 percent are organic certified. One hundred percent of Aprocassi’s 400 members are fair trade certified, and more than 80 percent are organic certified.

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About Global Partnerships: Global Partnerships (GP) is a Seattle- and Managua-based nonprofit that expands opportunity for people living in poverty by investing in microfinance and other sustainable solutions to poverty. As of March 31, 2011, GP had $40.2 million in capital invested in 28 microfinance partners in seven countries in Latin America. http://www.globalpartnerships.org

About Sustainable Harvest: Sustainable Harvest is a specialty coffee importer that uses the Relationship Coffee model to bring partners together in a sustainable supply chain that serves everyone involved—from the farmer to the final consumer. Its approach builds direct, transparent market linkages for coffee growers while investing in training and management systems to improve their ability to produce high quality coffee. http://sustainableharvest.com/

A couple weeks ago, CGAP announced it’s winners for the 2010 Microfinance Photo Contest.  Now that the winners have had their time to shine, it’s time to start 2011′s competition.  CGAP announced on June 15th that the 2011 competition is open.  Each contestant can enter up to 20 photos:

“We are looking for original, striking images of the impact of microfinance around the world. These images may reflect the wide variety of microfinance and microenterprise development around the world, representing a range of products, institutions, and methodologies, and may touch on a broad range of social, economic, developmental, and technological issues. We encourage entries from all regions, in both rural and urban settings. Each photo submission must be accompanied by a brief description of the photo, including the place and country where the photo was taken, how it tells the story of microfinance and reflects advances in access to finance. Read More at CGAP.”

A couple days ago Bill Clinton announced the launch of “Kiva City’ at the Clinton Global Initiative Conference which is a joint project between Kiva and Visa.  Kiva City is a new way for Kiva to accelerate the growth of U.S. microfinance by empowering communities to join the movement. Each Kiva City will be an alliance between four groups:

1. Kiva – Kiva brings its personal microlending website, with more than 595,000 lenders and over $220 million dollars in total loans.
2. Civic Leaders – Mayors, State and Congressional Representatives, and other elected officials can support Kiva City by publicly declaring their commitment to support the alliance of local partners with Kiva to reach small businesses in need with microfinance loans.
3. Community Organizations – Community groups provide the feet on the ground that find local small businesses, and encourage them to apply for loans through the established field partner in the Kiva City initiative.
4. Financial institutions – A financial field partner will use their time-tested field experience and processes to qualify and administer loans to borrowers.

Here is the video announcement from Bill Clinton:

Here are a few articles to read more about Kiva City:

• Kiva.org, Visa Inc. Launch “Kiva City” in Support of U.S. Small Businesses
• ACCION USA Is a Key Partner on New Kiva.org, Visa Inc. Program to Support of U.S. Small Businesses
• Kiva.org, Visa Inc. Launch “Kiva City”

The CGAP 2010 Microfinance Photography Contest has announced the winners.  The CGAP contest is a greatly yearly event that inspires artists, volunteers, lenders, etc to capture Microfinance through the lens of a camera.  This years winners include:

Read more details over at CGAP

Global Partnerships press release:

Seattle, Wash., – Global Partnerships (GP), a Seattle-based nonprofit that invests in microfinance and other sustainable poverty solutions, was selected in the inaugural ImpactAssets 50, a list of leading private debt and equity fund managers that deliver social and environmental value in addition to financial returns. The list was announced today.

“We are honored to be recognized as a leader among impact investors,” said Mark Coffey, chief investment officer for GP. “Inclusion in the ImpactAssets 50 is a testament to our strong track record as a fund manager, and our commitment to reaching underserved communities in Latin America with the most effective solutions.”

Since 2005, Global Partnerships has created four debt funds—ranging from $2 million to its most recent fund of $25 million—that provide affordable loans to a select portfolio of microfinance organizations and cooperatives, its partners. In identifying partners, GP prioritizes organizations that reach people most in need of credit, such as the rural poor, and which provide borrowers with not just microloans but “microfinance-plus” services such as preventive health care, business education and agricultural training.

“Impact investing” refers to investment vehicles built to solve the world’s most pressing social challenges, while offering investors social and financial returns. The ImpactAssets 50 is intended to help investors make sense of the expanding universe of impact investing, and will provide financial and impact information on each manager.

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About Global Partnerships: Global Partnerships (GP) is a Seattle- and Managua-based nonprofit that expands opportunity for people living in poverty. As of March 31, 2011, GP had $40.2 million in capital invested in 28 exceptional microfinance partners in seven countries in Latin America, which together serve 880,000 borrowers. Find out more at www.globalpartnerships.org.

About ImpactAssets: ImpactAssets is a nonprofit financial services company created to help solve the world’s toughest problems by catalyzing investment capital for maximum environmental, social and financial impact. The ImpactAssets 50 is the first “open source,” publicly published list of private debt and equity impact investment fund managers and is intended to serve as a gateway into the world of impact investing for investors and their financial advisors. www.impactassets.org/impactassets-50/

 

Congrats to Global Partnerships!

All over the world people are celebrating the announcement of Osama Bin Laden’s Death, waiving American Flags and singing the national anthem of the US.  Even in the middle east, people are celebrating the death rather than opposing the US.  I was writing up some other blog posts before the announcement was made, which of course put my work to a halt.  Now I got to thinking, “Will this affect Microfinace?”  I did a couple quick google searches and didn’t see anything major directly related to Bin Laden and Microfinance.  There will of course be backlash from the operation, but I think that overall, the ties will get better, which will hopefully allow more microfinance exposure in the middle east.  Over the last couple years, I’ve seen people be weary about giving money to non-profits in the middle east, despite some of the great work being done by LendForPeace.org, Kiva and many more.  Additionally, With the recent 60 minutes expose on Greg Mortenson and the Central Asia institute not being 100% factual , with a lot of the money going to the Three Cups of Tea marketing rather than the people in Afghanistan and Pakistan, people have started to loose faith.  However, even with all the hesitation of sending money to the middle east, I think that with today’s annoucement and the hard work of all the agencies in the middle east, I think we should be able to see an uplift in funding going to the middle east.  Now that Bin Laden is dead, donors/lenders will hopefully be more supportive of rebuilding what has been destroyed.  I’m especially interested to see how an organizations like LendForPeace, which focuses primarily in the middle east, will be affected by something this groundbreaking.   Will they be able to prove whether things got better or worse, or will things continue the way they always have?  I have high hopes that organizations like this will be able to prevail, but only time can tell how this will play out.