Minlam Microfinance Fund

Cayman Islands

Last updated 13 May 2020, by Impactyield.

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Fund geography

Emerging countries (256)

Minlam Asset Management LLC is an alternative asset management firm founded in 2006. Minlam Asset Management serves as the investment manager for the Minlam Microfinance Fund, an emerging market debt fund that focuses on investments in financial institutions that serve low-income communities in certain markets. Minlam launched Minlam Microfinance Fund, its sole fund under management, in October, 2007. Funded by a sovereign fund of funds, a United States university endowment and several high net worth individuals, Minlam Microfinance Fund currently has assets of approximately $50 million.

The Minlam Microfinance Fund seeks to deliver attractive risk-adjusted returns to investors by providing local currency debt funding to microfinance institutions (MFIs). Our experienced team of investment professionals combines microfinance and emerging market debt financing expertise with currency risk management capabilities to deliver local currency funding to MFIs. Minlam’s local currency debt products are increasingly being sought by MFIs, which are willing to pay a premium for local currency loans, and provide the Fund with a competitive advantage to hard currency lenders. The Fund provides institutional and other private investors access to creditworthy microfinance institutions in growing and highly attractive frontier markets which offer significantly higher yields than currently available in developed markets.

Asset class


Fund style

Not listed

Financial description

The investment objective of the Fund is to achieve attractive risk-adjusted returns by lending directly to microfinance institutions (MFIs) and purchasing debt securities of MFIs in select emerging markets. Minlam employs a systematic approach to investing by (1) using industry and local relationships for deal origination (2) selecting attractive emerging markets and eliminating countries with the highest default and/or foreign exchange depreciation risk; (3) conducting a comprehensive internal credit evaluation of prospective MFIs, including on-site due diligence and in-depth fundamental analysis; (4) structuring loan transactions, including covenants and terms, in a manner to protect investors; (5) closely monitoring portfolio holdings through direct from MFIs and frequent management contact; and (6) strategically hedging foreign exchange exposure, including the use of frontier market hedging through financial institutions exclusively serving the microfinance sector. We strive to generate compelling risk-adjusted returns for our investors by (i) loaning to MFIs at attractive local interest rates, and (ii) benefiting from local currency stability or appreciation relative to USD with respect to portfolio investments denominated in the local currencies.
In January 2010, Minlam received a $100 million portfolio guarantee facility from the USAID. 50% of the principal amount of MFI loans in 7 countries are guaranteed by the full faith and credit of US Treasury.

16 years

of track record


the year funded

48,500,000 USD


Fund overview

Asset manager: Minlam Asset Management

Product track record: Fund has 16 years of track record

Target IRR: 8%

Committed Capital: 48,500,000 USD (US Dollar)

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

Fund domicile:

Product status:


Inception year: 2007

Vintage year: 2007

Target region:

Target close date: 01/02/2012

Product term: Open-ended: semi-annual redemption w/ 15% gate, 1 yr lockup

Assets under management: 48,500,000 USD (US Dollar)

Investment size: Min: 500,000; Max: 6,000,000; Avg: 4,000,000

Co-investment policy:

Currency of investments:

Currency for fund / product figures:

Fund investments to date: 17

Fund investments to date exited or repaid: 5

Management fee: 2%

Carried interest: 20%

Hurdle rate: LIBOR+150 BPS%

GIIN Investors' Council Investment: Yes

Limited Partners / Investors: European government owned fund-of-funds; U.S. university endowment; frontier market impact fund-of-funds; U.S. foundations; HNWIs

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


E-mail: info@cim-llc.com

Website: http://www.minlam.com

Phone number: 12122267897.00

If you wish to have your details removed from this database please email gdpr@impactyield.com

Michael Parker

Chief Executive Officer

Impact Performance


Impact thesis

Minlam expands the onlending capabilities of microfinance institutions through a responsible local currency debt product. With our $50 million portfolio, we currently fund 50 MFIs in 30 emerging and frontier markets. Our portfolio MFIs serve 3.6 million low-income clients, 40% of which are women and 20% of which are located in rural areas. Their average loan size of $3,100 is equal to 40% of the gross national income per capita on a purchasing power parity basis.
The availability of local currency loans from microfinance investment vehicles and development financial institutions to growing MFIs has been a major challenge. A January 2011 study released by MFX Solutions, a currency hedging facility for the microfinance industry, provided a financial snapshot of over 300 microfinance institutions, representing approximately 60% of the total assets in the industry, at year end 2008. The study revealed that $6 billion of unhedged hard currency liabilities remained outstanding. Without the availability of local currency debt and limited hedging options, three-quarters of this figure ($4.5 billion) was onlent in dollars and Euros to microfinance clients. End users of microfinance loans products are incapable of managing currency volatility. Minlam seeks to resolve this dangerous predicament through extending local currency loans to MFIs with an investment process capable of managing currency on a portfolio basis.

Impact Management


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