Financial Instruments
Working with local partners from the private sector, civil society and governments, MIF has financed the growth of innovative and inclusive businesses in Latin America and the Caribbean with significant contributions and investments.
The instruments that MIF has available are:
Grants and Loans
- Line of Activity for Promoting Small-Enterprise Financing (LASEF), provides technical assistance and training to increase the capacity of financial institutions to reach small enterprises.
- Line of Activity for Strengthening of Microfinance Institutions, provides resources to institutions that develop products, improve their operative abilities and introduce technology in order to offer improved financial services to microenterprises.
- Social Entrepreneurship Program (SEP), supports the integration of rural businesses to value chains and markets, as well as support to private alternative providers in the areas of education, health, water, and energy, among others.
- The Rating Fund II, co-finances the contracting of rating services for microfinance institutions.
Direct and Indirect Investment
The MIF is a primary source for direct and indirect investment for financial institutions that provide loans, investment capital and technical assistance to microenterprises and entrepreneurs in Latin America and the Caribbean.
BID Invest a part of the IDB Group, was one of the first development institutions to invest directly in the equity of a microfinance institution in early 1990s. Today, MIF is the lead IDB direct investor with equity participation in institutions such as Financiera Calpiá (today Banco Procedit El Salvador), Credifactor (Nicaragua) and Microfin (Uruguay).
Indirect investment has taken place thorough the following broad categories:
- Funds, such as the Microfinance Growth Fund (MiGroF) and the Emergency Liquidity Facility (ELF), which targets institutions affected by financial crises of natural disasters.
- Private sector instruments with different levels of sophistication and reach, such as funds in local currency (LOCFUND), for subordinated debt (Solidus), for micro insurance (Paralife), and the development of microfinance institutions ( Global Partnerships Microfinance Fund 2006 and 2008, AIM, LA-CIF, Profund International and ACCION Gateway Fund ), among others.
