Microfinance: The end of the El Dorado for Investors?

5 Mar 2010 09:00 Africa/Lagos

Microfinance: The end of the El Dorado for Investors?

PARIS, March 5, 2010/PRNewswire/ -- PlaNIS, an entity of PlaNet Finance Group dedicated to advising SRI (Socially Responsible Investment) funds, has noticed that during the last decade, the microfinance sector has benefited from a sustained growth due to an increased interest from many international investors. In 2008, European funds assets dedicated to microfinance have grown by 31% thanks to private investors and public entities.


In 2009, in a very tough economic environment damaged by the crisis, SRI funds dedicated to microfinance have continued to increase their fundraising, with a 16% volume growth, (an excellent rate compared to the asset management market). Today, SRI European funds represent more than 6 billion USD.


Nevertheless, in 2009 and contrary to the previous years, the earning rates for SRI funds dedicated to microfinance have strongly decreased to reach rates between 1.74% and 2.31% which used to be at an average of 4%.


These results can be explained by:


- An increasing credit-related risk: Outstanding payments linked to high-risk-portfolio, generated by credit repayment default reaching up to 20% in certain areas.


All this, has led some funds to settle very significant provisions.


- The growing over-liquidity of numerous microfinance funds leading to the drop of their revenues: Slowdown of MFIs' development, combined to a more regulated credit policy, has drawn to the decrease of their financing demand. At the present time, PlaNIS estimates the total non-used liquidity to 1 billion USD which represents about 20% of the asset under management.


- Local currencies volatility


Therefore, SRI funds in microfinance have to be careful before investing and need to work with specialists in order to mitigate the risks.


Despite hard market conditions, PlaNIS managed to maintain good results for 2009. Its portfolio has increased by about 30% (from 119M USD to 153M USD), and the average return of the financing programs proposed to advised funds has come about 9%.


These results proceed from its big ability in terms of sourcing, its high level of expertise of the market and its portfolio composed by promising MFIs.


NEWS :


PlaNIS is a partner of MicroFinancial Services World. Organised by Hanson Wade and chaired by Xavier Reille of CGAP MicroFinancial Services World is the largest gathering of Microfinance Practitioners and Socially Responsible Investors in Europe. The conference will take place from the 10th to the 12th of May 2010 in Amsterdam.


Website: http://www.mfs-world.com


About PlaNIS:


In 2009, PlaNIS' met 300 MFIs in 40 countries. 70 investment proposals were drawn up and close to 50 million USD were lent out to MFIs. PLANIS currently advises 9 microfinance funds and manages a 153-million-USD portfolio distributed among 75 MFIs across 30 countries, 4 of these funds are managed by responsAbility; PLANIS main partner.


PlaNIS is part of PlaNet Finance group and has the chance to benefit from its 13 years of expertise concerning microfinance.


http://www.planetfinancegroup.org



MicroFinancial Services World
Charlotte Whewell
charlotte.whewell@hansonwade.com
+44(0)20-3141-8700




Source: PlaNIS

Press Contacts: PlaNet Finance, Marlène Biard, mbiard@planetfinance.org, +33-1-49-21-26-15; Audrey Le Blanc, aleblanc@planetfinance.org, +33-1-49-21-26--5; MicroFinancial Services World, Charlotte Whewell, charlotte.whewell@hansonwade.com, +44(0)20-3141-8700

Africans for Haiti

For Immediate Publication:

Africans For Haiti: Board Members and Patrons Needed For The "Microfinance For Haiti (MFH) "African Solidarity Project.

As you are rightly aware, once the TV cameras leave Haiti, most of those groups competing for headlines-grabbing photo opportunities with quake survivors will leave. This is not the first disaster for Haiti through promises where made and broken.

Respected Africans in persons of Madame Graca Mandela and Professor Chinua Achebe have called for an African Solidarity with our Haitian brothers and sisters.

To support the quake victims rebuild their lives bottom-up over the medium or long term (sustainability), I have initiated the Microfinance For Haiti (MFH) solidarity project of my NGO the African Council for Arts and Culture eV., Germany. It is part of my action for the Africans for Haiti call from the Diaspora point of view.

There are four (4) more seats available on the Board and you can occupy any of them as you dee fit.

The target beneficiaries of my Microfinance For Haiti (MFH) are primarily widows, petty traders,artisans and other enterprising survivors who need to rebuild their small businesses from scratch. You can sponsor a widow start a small business through MFH as an alternative to a seat on the Board.

http://www.microfinanceforhaiti.org/SponsoraWidowinHaiti.html

I remain at your disposal for further details while looking forward to a lasting cooperation in other appropriate forms for Haiti.



Bubacarr Sankanu

Founder,

Microfinance For Haiti (MFH)

Tel.: +49(0)177-484-2957

Email: sankanu@microfinanceforhaiti.org

www.microfinanceforhaiti.org