CANCÚN, Mexico – The Inter-American Development Bank’s Multilateral Investment Fund (MIF), the Inter-American Investment Corporation (IIC), the Corporación Andina de Fomento (CAF), and private investors today signed documents launching the Microfinance Growth Fund (MIGRoF), a new lending facility for microfinance institutions in Latin America and the Caribbean.
The new facility is expected to provide up to $250 million in medium- and long-term loans to microfinance institutions throughout the region, offering financing in local currency and in U.S. dollars. A $125 million loan from the U.S. Overseas Private Investment Corporation (OPIC), pledged at the signing ceremony today, will allow MIGRoF to initiate its lending operations in coming weeks.
The creation of MIGRoF was first announced by U.S. President Barack Obama in April 2009. Speaking at the Fifth Summit of the Americas in Port of Spain, Trinidad, he advanced that OPIC would partner with MIF and the IIC to launch a new source of funding for microfinance institutions in response to the reduction in their lending capacity due to the global credit crisis.
MIF and the IIC took a leading role in structuring MIGROF and defining its lending strategy. They also engineered the competitive process by which Swiss investment management company BlueOrchard Finance S.A. became the new facility’s manager.
“This new facility will not only help restore the lending capacity of microfinance institutions after the impact they felt when they were hit by the global financial crisis”, said IDB President and IIC Chairman Luis Alberto Moreno. “MIGRoF will also fuel the engine of growth in microfinance, boosting economic growth and increasing employment in many countries of the region”.
MIF is providing $10 million in equity to the new facility, the IIC will contribute up to $5 million, and CAF will invest up to $10 million. The private partners and investors in MIGROF, besides Banamex, are the Norwegian Microfinance Initiative (NMI), ACCION International, and BlueOrchard.