million women get access to loans
million DKK invested by IFU in microfinance
year old Grace Masengesho from Rwanda extended her business with a loan

Many developing countries have very limited access to financial services. This means that the inhabitants cannot invest in their future and improve their standard of living. Nordic Microfinance Initiative is a Norwegian-Danish partnership that contributes to strengthening the financial sector in developing countries, IFU has invested more than DKK 600m in microfinance.

In many developing countries access to loan financing is very limited. Not least for poor people in the country. Microfinance is a way to increase access to investing in small companies which can create economic progress and development locally.

Nordic Microfinance Initiative (NMI) is a public-private partnership between public development finance institutions Norfund and IFU and several Norwegian and Danish private investors like Ferd AS, DNB Livsforsikring ASA, Storebrand ASA and PBU.

Young woman can now open a shop

NMI invests in medium-sized microfinance institutions with a commercial foundation, professionally operated and with focus on corporate social responsibility. The fund’s strategy is based on active ownership, and the aim is to develop the institutions in terms of both profitability and sustainability.

NMI contributes to self-employed and small businesses gaining access to capital and thereby a chance to develop their business. One of the borrowers is Grace Masengesho, a 32-year old woman from Rwanda, who sells cosmetics and hair extensions. Through a loan from AB Bank Rwanda, financed by NMI, she has been able to open a second shop over a two-year period and thereby increase the number of customers as well as her turnover.

IFU has invested more than DKK 600m in microfinance

In addition to NMI, IFU has invested in a number of other microfinance funds and institutions. Total investments amount to more than DKK 600m, and in 2019 the microloans reached 25 million people, of whom 20 million were women.

“Investing in microfinance is a good tool that contributes to developing local businesses in developing countries very directly through financial services. This is not least the case for women who account for the largest group of borrowers by far.”

Torben Huss, CEO, IFU

Must comply with international guidelines

To ensure the best possible development effects, the microfinance institutions in which IFU invest must comply with the UN guidelines “Principles for Investors in Inclusive Finance”, and these principles must be one of the basic values in the institutions.

Furthermore, the institutions must comply with international standards such as CGAP Client Protection Principles, IFC Microfinance Exclusion List, anti-money laundering requirements and anti-corruption guidelines.

  • Microloans help fulfil SDG 1

    Investment in microfinance contributes to fulfilling SDG indicator 1.4 which focuses on ensuring that particularly the poor and the vulnerable have access to basic services, e.g. in the form of financial services, including microfinance.

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