IFU has partnered with Symbiotics to provide debt financing to between 15 and 20 financial institutions in Africa through a multi-currency impact bond. The main impact objective of this investment is to foster development in Africa through employment and income creation. The debt can be provided in several local currencies.
The bond will finance loans to businesses and households via selected financial institutions in Africa. It will be issued by Micro, Small & Medium Enterprises Bonds S.A., a bond issuance program sponsored by Symbiotics.
IFU has selected Symbiotics because of its experience in impact debt finance in emerging markets. The bond meets the stringent social and environmental criteria that IFU applies to all its investments.
“This first multi-currency impact bond is a truly innovative structure allowing to provide debt in several local currencies simultaneously to African financial institutions. It will grow the capacity of African financial institutions to support African entrepreneurs and small businesses with debt finance to develop their activities.”
Philipp Jung, Head of Structuring at Symbiotics
Barbara Marcussen, Investment Director at IFU added: “The bond will enable IFU to promote financial inclusion in Sub-Sahara Africa via microfinance institutions and SME banks that would otherwise not be reached. They play an important role in closing the credit gap and securing the basis for a decent livelihood in Africa. We see this vehicle as an innovative way to support their efforts to assist small businesses and households navigate through Covid-19, sustain employment and income generating activities and revitalize growth in the region.”
The bond will be listed on the Securities Official List of the Luxembourg Stock Exchange and can include several different local currencies as well as senior and subordinated debt.
About Micro, Small & Medium Enterprises Bonds S.A.
Micro, Small & Medium Enterprises Bonds S.A. is a bond issuance program sponsored by Symbiotics. It issues impact bonds that provide direct exposure to microfinance institutions, small and medium enterprise (SME) banks and other financial intermediaries located in emerging and frontier markets. Since its inception, the program has issued 211 impact bonds, financing 116 institutions in 45 different countries. The total amount issued is more than USD 2 billion. MSME Bonds are set up as a securitization company domiciled in Luxembourg and operates on a pass-through basis.
Symbiotics is the leading market access platform for impact investing, dedicated to financing micro- small and medium enterprises and low- and middle-income households in emerging and frontier markets. Since 2005, Symbiotics has structured and originated some 4,000 deals for over 450 companies in almost 90 emerging and frontier markets representing more than USD 5.5 billion. These investments have been purchased by more than 25 fund mandates and more than 50 third party specialized fund managers, forming a growing ecosystem and marketplace for such transactions.