BlueOrchard Financing

BlueOrchard – an experienced and reliable financing partner

BlueOrchard is a leading impact investment manager, focusing on microfinance. We were founded as the first commercial manager of microfinance debt investment in 2001. Our mission is to provide innovative financing solutions to financial intermediaries in emerging markets, and financial and social returns to investors. We achieve this by developing and offering innovative and attractive financing solutions to microfinance institutions and companies, which support millions of small enterprises in low-income regions worldwide.

BlueOrchard has invested in excess of USD 4 billion in over 350 institutions across 70 countries. We manage a range of commercial funds designed to meet the evolving financial needs of MFIs. We engage in long-term relationships with MFIs and aim to supply commercial funding that will sustain their progress and growth.


 BlueOrchard-managed funds overview

  • BlueOrchard Microfinance Fund

    The BlueOrchard Microfinance Fund (BOMF) was founded in 1998 as the first private and fully commercial microfinance investment fund in the world. Since its inception, it has been managed strategically as a pure fixed-income fund, investing in microfinance institutions in emerging and frontier markets, with systematic currency hedging.

    The BlueOrchard Microfinance Fund aims to foster financial inclusion and shared prosperity, by supporting microfinance institutions to expand their outreach, improving the quality and appropriateness of their financial services, and encourage the development of new products such as savings, insurance and payment services.

  • Climate Insurance Fund

    The Climate Insurance Fund (CIF) is an unprecedented fund, providing an innovative approach to climate adaption. The CIF’s objective is to improve the access and use of insurance in developing countries, reducing the vulnerability of micro, small and medium enterprises (MSME) as well as low-income households to weather related threats.

    Read more here.

  • Microfinance Enhancement Facility

    Microfinance Enhancement Facility (MEF) aims to support development and prosperity globally. MEF was designed as a flexible vehicle to stabilize funding for MFIs, providing liquidity when market doesn’t. BlueOrchard is proud to have been named co-manager and currently manages approx. half of the MEF portfolio.

    Read more here.

  • Microfinance Initiative for Asia

    The Microfinance Initiative for Asia (MIFA) is the first microfinance initiative of its size to exclusively target Asian MFIs. MIFA targets Tier II and Tier III MFIs to achieve deep outreach in its target markets. The main objectives are to create institutional capacity for sustainable microfinance delivery in Asia and to strengthen links between domestic and international capital markets.

    Read more here.

  • Microfinance Growth Facility

    Microfinance Growth Facility (MiGroF ) – The Obama Fund, was created in response to U.S. President Obama’s announcement at the Summit of the Americas in April 2009 to help support the provision of microfinance services in Latin America and Caribbean.

    Read more here.

  • Regional Education Finance Fund for Africa

    The Regional Education Finance Fund for Africa (REFFA) is the first education finance fund in Africa. It is a unique thematic fund designed to address the needs of the education sector in Africa. Its main objective is to increase equal access to secondary, vocational and higher education and enhance education quality.

    Read more here.

Eligibility Criteria

While the terms and conditions of our lending vary by product, here is an overview of our general eligibility criteria.

  1. Age: minimum 1 to 2 years of operations
  2. Externally audited accounts
  3. Primary business: productive lending (microfinance, SME)
  4. Sustainability: operational self-sufficiency or projected self-sufficiency in following 12 months
  5. Governance and management: sound corporate governance and dynamic management team
  6. Region: see our fund overview above for their respective target regions

Furthermore, we target financial institutions that meet the following financial criteria:

Portfolio quality

PAR 30 + restructured loans + net charge-offs LTM < 12%

Provisioning

  • Loan Loss Reserve / (PAR > 90 + Restructured Loans) > 100%   or
  • PAR90 + Restructured Loans – Loan Loss Reserve) / Tier 1 Capital < 10%     or
  • For regulated entities, in compliance with local regulatory standards

Capital Adequacy Ratio

For regulated investees:

  • Capital Adequacy Ratio (CAR) ≥ 15%     or
  • 2 percentage points above the regulatory minimum

For unregulated investees:

  • Equity/Total Assets (or Tier 1 Capital Ratio) > 15%

Profitability

Return On Assets (ROA) over the last twelve months > 0%

Foreign Currency

The Investee shall at all times maintain the sum of the absolute value of absolute value foreign currency assets – foreign currency liabilities divided by Equity should be less than 75%.

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