Invest in Microfinance

There are now efficient ways to invest in microfinance projects and receive two distinct returns: a social and financial one. Here is a list of investment opportunities:

ResponsAbility Microfinance Fund – managed by Credit Suisse not available to U.S. residents/citizens

With over $350 million under management, this is currently among the biggest open microfinance funds in the world. As you can see in the latest monthly report , it has consistently returned good results (on average 4.61 per annum for the US$ class, 2.24% per annum for the CHF class, and 4.45% per annum for the Euro class) with very low volatility. According to mutual funds research firm Morningstar, this fund had, in the last 5 years, 57 positive months and only 4 negative. Its worst monthly result was -0.21%.

There is an excellent video presentation (available also in lower resolution here)that gives you some practical information about this investment opportunity. To subscribe to the fund you need to get in touch with Credit Suisse or trade it from any Swiss based banks (e.g. swissquote bank which does deal with non-Swiss residents too) and a minimal subscription of 1000 USD/CHF/EUR.

Microplace an Ebay company available ONLY to U.S. investors
This innovative portal targets individual investors (U.S. only) interested in microfinance as an investment. Lenders can gain up to 6% by buying securities issued by microfinance organisations like Calvert. While there is an implicit risk (i.e. if the issuer is unable to repay the loan) there have been no reported defaults to date. The whole platform is simple and straightforward. This is probably among the best – if not the best- opportunity for US investors. There is currently no US mutual fund investing in microfinance and Microplace is certainly a very valuable alternative.

Dexia Micro-Credit fund not available to U.S. residents/citizens

This fund is promoted by the Belgian bank Dexia and managed by the Swiss microfinance specialist BlueOrchard. The minimum subscription is 10,000$ and returns have been very positive: 5.98% annualized on average for the US$ class and 3.10% annualized for the Swiss francs class of the fund. According to the latest monthly report it has US$ 395 Million under management.

This list is not comprehensive and you could find more funds in the microcapital page but from a practical standpoint this is all I could find as being easily accessible (e.g. without having to make a phone call or browsing a whole website). If you are aware of any other open microfinance investment opportunities, feel free to add your comments and I will update this page accordingly.

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