Key findings:
With over 20% of respondents invested in Microfinance, the asset class has become increasingly professionalized and more widely recognized. Microfinance is a fast growing market and offers an attractive risk/return profile. The survey nevertheless shows that investors frequently do not know about these characteristics and lack transparent information. Technical constraints, such as investors’ portfolio structures and legal framework are typical barriers to overcome. Based on the growth rate and the findings in the survey, it is expected that half of all institutional investors in Switzerland will be invested in Microfinance by 2020, representing a significant growth of the asset class.
Switzerland is playing a key role in managing and investing in the field of Microfinance. Roughly one third of commercial global Micro Finance Assets are either advised or managed out of Switzerland. To date there has been no broad survey conducted within Swiss institutional investors in Microfinance. The aim-oriented joint survey identifies current exposures and assesses future needs and demands. The survey results will allow for increased industry transparency as well as individual benchmark analyses.
A significant portion of well-informed Swiss institutional investors are invested in Microfinance and many of them are considering raising their exposure. More than 50% of the survey’s participants appreciate the combination of the stable financial performance of microfinance investments with verifiable social responsibility, while 20% see lack of correlation of microfinance with other asset classes as a strong positive. An increasing number of professionally managed and transparent investment opportunities demonstrates the dynamism of the sector and supports the current growth rate of nearly 15%, which is also helped by the low yielding Investment environment for traditional Fixed Income Products.
BlueOrchard Finance S.A. was founded in 2001 as the first commercial manager of microfinance debt investments worldwide. To this day, the company has deployed in excess of USD 2bn in loans to microfinance institutions, providing access to microcredit to over 30 million individuals across 50 countries. Investors in BlueOrchard-managed funds include private and institutional investors, supranational institutions as well as renowned foundations. The company employs highly experienced staff with backgrounds in traditional and development finance including 28 investment professionals in Geneva, Zurich, Luxembourg, Lima, Phnom Penh, Tbilisi and Nairobi.