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First German Fund for Microfinance

Germany

Last updated 13 May 2020, by Impactyield.

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Fund geography

Emerging countries (256)

The First German Fund for Microfinance (official legal name: VG Microfinance Invest Nr. 1) was launched in July of 2007 and was the world’s first externally rated securitization of subordinated microfinance loans. Investors subscribed to a total of € 60 million in bonds, in three tranches, including for the first time € 36 million by private clients of Deutsche Bank. The remainder of the fund was purchased by KfW (€20 Million) and Deutsche Bank (€4 Million). These subordinated loans helped 21 microfinance institutions to make an effective contribution in their fight against poverty by distributing at least 120,000 very small loans to micro entrepreneurs in over 15 developing countries.

VG Microfinance Invest NR. 1 GMBH was the first rated CLO of subordinated microfinance loans to be sold in Germany and the first application of structured finance methodology to microfinance, with the senior tranche of Euro 36 million being rated BBB by Fitch ratings.



Financial description

Financing was made available through a private placement to private investors in Germany through Deutsche Bank Private Wealth Management.

17 years

of track record

2007

the year funded

59,760,000 EUR

AUM

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SDG goals

SDG targets

Equal rights to ownership basic services technology and economic resources

Increase access to financial services and markets

Impact Category

Key performance indicators

Fund overview

Asset manager: Deutsche Bank

Product track record: Fund has 17 years of track record

Target IRR: n.a.

Committed Capital: n.a.

Target return category: Risk-adjusted market-rate of return

Fund domicile:

Product status:

Style/Stage:

Inception year: 2007

Vintage year: 2007

Target region:

Target close date: n.a.

Product term: 7 years

Assets under management: 59,760,000 EUR (Euro)

Investment size: Min: 0; Max: 0; Avg: 0

Co-investment policy:

Currency of investments:

Currency for fund / product figures:

Fund investments to date: 20

Fund investments to date exited or repaid: 0

Management fee: 2%

Carried interest: n.a.

Hurdle rate: n.a.

GIIN Investors' Council Investment: Yes

Limited Partners / Investors: KfW, Deutsche Bank

Limited Partner / Investor Type: Development Finance Institution (DFI), Other Institutional Investors

Contact

E-mail: n.a.

Website:

Phone number: 212.250.0549

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Impact Performance

n.a.

Impact thesis

The Fund offered subordinated debt to 21 microfinance institutions, thereby strengthening their capital level and enabling them to expand their portfolio. In some cases, the funding supported the MFI’s transformation to regulated entities. The fund disbursed to 21 MFIs operating in 15 countries. The geography includes the following regions, Latin America, Africa, Central Asia, Eastern Europe, South Asia and East Asia.

Impact Management

n.a.

Financial benchmark

Term Description:

Keywords