news - FMO and Oikocredit creating opportunities in low income countries

Dutch development bank FMO and social investor Oikocredit have launched a €10 million fund to create business opportunities in low income countries. By providing access to finance, the Low Income Countries (LIC) Fund aims to support micro and small entrepreneurs in countries recognized by the United Nations as low income.

With this fund, FMO and Oikocredit will invest predominantly in central and southern African countries through rural-based microfinance institutions and small to medium enterprises (SMEs). Both FMO and Oikocredit will put €5 million towards the fund. Microfinance institutions providing financial services to micro- and small entrepreneurs will receive 75% of the loans and the remainder will be used for SME funding. Oikocredit, with its vast network of local offices and expertise in rural expertise, will act as fund manager.

Ben Simmes, managing director at Oikocredit: “While FMO invests large amounts in microfinance institutions mainly active in urban areas, Oikocredit invest smaller amounts and provides funding to the relatively smaller microfinance institutions with a strong focus on rural regions. Together, we aim to provide micro and small entrepreneurs in the world’s poorest countries with access to finance. The LIC Loan Fund fits Oikocredit’s strategy to expand its portfolio in Africa.”

Maurice Scheepens, Investment Officer at FMO: “The interesting aspect of this concept is its ability to cater for the needs of growing companies. Once the fund has provided its support to companies at the bottom of the pyramid, the respective companies can qualify for a 'regular' Oikocredit loan and subsequently for a larger facility from  FMO. Thereafter, the company is well qualified for support from commercial banks. This way, Oikocredit and FMO optimally combine the strengths of their organisations.”

With the launch of the LIC Loan Fund, FMO and Oikocredit extend their cooperation in inclusive finance. Both organizations are shareholders in a number of MFIs and Oikocredit has a stake in The Currency Exchange Fund (TCX), co-founded by FMO.

FMO
The Netherlands Development Finance Company (FMO) is the bilateral private sector development bank of the Netherlands. FMO invests in the private sector, which can serve as an engine of sustainable growth in developing markets. To this end, we provide capital, knowledge and partnerships to ambitious entrepreneurs. With an investment portfolio of € 5.9 billion, FMO is one of the largest bilateral private sector development banks worldwide. Our focus is on three sectors which create a high development impact: financial institutions, energy and agribusiness, food & water. This focus enables us to offer tailor-made finance solutions, based on real expertise. In other sectors, FMO teams up with renowned partners to combine local networks, knowledge and experience.  We believe that our approach will lead to lasting economic and social development, which will empower people to employ their skills and improve their quality of life.

Oikocredit

Oikocredit is one of the world’s largest sources of private funding to the microfinance

sector. It provides credit and equity to small businesses through microfinance

institutions across the developing world and directly to trade cooperatives, fair trade

organizations and small-to-medium sized enterprises (SMEs). Oikocredit is privately financed. More information: www.oikocredit.org

Press contacts

·         FMO: Paul Hartogsveld; p.hartogsveld@fmo.nl, +31 (0)6 39 44 72 88

·         Oikocredit International: Kawien Ziedses des Plantes, kziedsesdesplantes@oikocredit.org, +31 (0)6 272 549 04.