The advantages of microfinance for investors

Microfinance is on the rise. In 2000, there were 7 million end customers worldwide. Today, they are 150 million. Those who invest in microfinance help local entrepreneurs in developing countries. “We give them access to financial services. They thus open up perspectives for themselves and their immediate surroundings.”

With 25 years of experience, Incofin, a Belgian social cooperative society (scfs), is one of the oldest investment funds in the world specializing in microfinance. The company has a large share of institutional shareholders such as Volksvermogen, VDK bank, Gimv, Umicore, ACV-CSC Metea, the King Baudouin Foundation and food industry social funds.

Incofin cvba also claims 2,184 individual shareholders. Some 93% of its partners are individuals, points out Guy Pourveur, administrator at Incofin scfs. “They represent around 43% of the total amount invested. Although institutional investors weigh ever more heavily in terms of investment volume, it is above all the number of retail investors that has increased significantly in recent years. We reach both small investors, such as students with a small budget, and the highest earners.”

Socially Responsible Financial Benefits

The main advantage of microfinance? An interesting and relatively stable financial return – at Incofin cvba, we are talking about around 2.5% on an annual basis. And then, investors create social added value, adds Guy Pourveur. “We seek to achieve maximum social impact with our investments. This impact is more difficult to measure than the financial return. But we can deduce it from the financial results of the projects in which we participate in nearly 30 developing countries.”

“We reach both small and large investors. From students on a budget to high earners”

Guy Pourveur

Administrator at Incofin cvs

How does Incofin cvs differ from most specialized microfinance investment funds? “We place the emphasis on our impact in the rural world, because it is in the most isolated regions that microfinance is most needed”, replies Guy Pourveur. “With the investment, we help local entrepreneurs and farmers who need help the most, all over the world. Add to that the fact that 76% of the 3.4 million micro-entrepreneurs we support with our solutions are women entrepreneurs. Our investors therefore directly encourage the emancipation of women.”

New trends and developments

Microfinance institutions are continually expanding their product lines and hence their influence on local economies. Particularly in the field of micro-insurance, continues Guy Pourveur. “Small farmers want to insure their harvest. And we give them access to health coverage or outstanding balance insurance. Furthermore, fair trade continues to gain in importance. We have even created a special fund for this purpose, worth $40 million. Microfinance is evolving and growing steadily.”

Guy Pourveur, administrator at Incofin cvba
©Incofin cps

Maximum impact, minimum costs

Investors themselves choose the amount they will subscribe to Incofin cvps. The minimum investment is 130.20 euros for 1/20e of action. Unlike banking investments, there are no entry or exit fees, nor management fees, concludes Guy Pourveur. “Investors who hold their shares for five years can additionally deduct 5% of the amount subscribed from their tax payable. These numerous advantages justify at least considering microfinance!”

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