MICROCAPITAL BRIEF: Oxfam, City of London, Symbiotics Invest $1.6m in Xac Leasing of Mongolia through Small Enterprise Impact Investing Fund (SEIIF)
Oxfam UK, a UK-based charity, City of London and Symbiotics, a Swiss microfinance investment intermediary, recently launched a joint initiative known as the Small Enterprise Impact Investing Fund (SEIIF). SEIIF is intended to deliver measurable social as well as financial returns to its stakeholders by investing in small and medium-sized enterprises (SMEs) through financial intermediaries operating in developing countries.
Over a three-year period, SEIIF is intended to raise USD 100 million, which will be invested in debt and equity investments deemed to have relatively low-risk and high-impact. The fund will provide access to finance for small businesses that focus on food production and sustainability that engage women in the economic cycle in the poorest countries. According to Barbara Stocking, chief executive of Oxfam UK, “In particular, SEIIF has been designed to meet the needs of the missing middle. These are the countless small businesses in developing countries which have the potential to thrive but are completely stifled by limited access to credit.” The ‘missing middle’ refers to organizations that are too large to benefit from microfinance, but too small to get attention from traditional banks.
The first beneficiary of the fund is Xac Leasing, an equipment leasing company based in Ulan Bator, Mongolia. Xac Leasing is part of the Tenger Financial Group (TFG), which is also the parent company of Xac Bank, Tenger Solutions and Tenger Insurance. Xac Leasing, which received a loan of GBP 1 million (USD 1.6 million) from SEIIF, operates in line with the fund’s requirements by including social and environmental considerations into its lease appraisal process for its client base of 260 SMEs.
Restating the City of London’s commitment to the fund, the city’s policy chairman, Mark BoleaT, reportedly said: “The City of London is committed to driving forward an approach to investment which puts the concept of ‘service’ back at the heart of financial services, and the SEIIF is a key part of this strategy.”
By Chioma Okwudiafor, Research Associate
About Oxfam International
Oxfam International was established in 1995 as a confederation of 15 organizations working to reduce poverty. Oxfam’s name is derived from its founding member, the Oxford Committee for Famine Relief, which began operating in Britain in 1942 by advocating for food supplies to be sent to women and children in Greece during the Second World War. Oxfam International since has grown into a network of member organizations serving 99 countries with disaster relief, advocacy and policy research with the aim of providing long-term solutions for poverty eradication. As of March 2011, Oxfam International reports GBP 2.8 million (USD 4.4 million) in assets. The British affiliate of Oxfam has since been named Oxfam UK.
About Symbiotics
Founded in 2005, Symbiotics provides for-profit investment intermediary services to the microfinance industry as well as business services to investors and practitioners of micro- and small enterprise (MSE) development. Symbiotics works with approximately twenty investment funds (MIVs) and a dozen institutional investors. It has facilitated the provision of USD 895 million in capital to about half a million micro-, small and medium-sized enterprises (MSMEs) through 150 financial institutions in approximately 35 emerging economies. The company also offers Syminvest, a microfinance investment intelligence platform designed to increase transparency and enhance investment capacity in the industry by monitoring regional markets and specific institutions.
About Tenger Financial Group (TFG)
Tenger Financial Group of Mongolia was created by the 2001 merger of Goviin Ehlel and Xac, two non-bank financial institutions that served micro, small and medium-sized enterprises. Tenger Financial Group is the parent company of Xac Bank LLC, Xac Leasing LLC, Horus Nomadic Solutions LLC and Tenger Insurance LLC. Tenger Financial Group is owned by local and international investors including EIT Capital Management LLC, the International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), Mercy Corps, Triodos Bank Group, BlueOrchard Private Equity Fund and several local nongovernmental organizations (NGOs). As of 2011, Tenger Financial Group reported total consolidated assets of MNT 837 billion (USD 605 million).
Sources and Additional Resources:
Symbiotics Press Release: October 8, 2012, “Oxfam fund makes first investment in developing SMEs”
Over a three-year period, SEIIF is intended to raise USD 100 million, which will be invested in debt and equity investments deemed to have relatively low-risk and high-impact. The fund will provide access to finance for small businesses that focus on food production and sustainability that engage women in the economic cycle in the poorest countries. According to Barbara Stocking, chief executive of Oxfam UK, “In particular, SEIIF has been designed to meet the needs of the missing middle. These are the countless small businesses in developing countries which have the potential to thrive but are completely stifled by limited access to credit.” The ‘missing middle’ refers to organizations that are too large to benefit from microfinance, but too small to get attention from traditional banks.
The first beneficiary of the fund is Xac Leasing, an equipment leasing company based in Ulan Bator, Mongolia. Xac Leasing is part of the Tenger Financial Group (TFG), which is also the parent company of Xac Bank, Tenger Solutions and Tenger Insurance. Xac Leasing, which received a loan of GBP 1 million (USD 1.6 million) from SEIIF, operates in line with the fund’s requirements by including social and environmental considerations into its lease appraisal process for its client base of 260 SMEs.
Restating the City of London’s commitment to the fund, the city’s policy chairman, Mark BoleaT, reportedly said: “The City of London is committed to driving forward an approach to investment which puts the concept of ‘service’ back at the heart of financial services, and the SEIIF is a key part of this strategy.”
By Chioma Okwudiafor, Research Associate
About Oxfam International
Oxfam International was established in 1995 as a confederation of 15 organizations working to reduce poverty. Oxfam’s name is derived from its founding member, the Oxford Committee for Famine Relief, which began operating in Britain in 1942 by advocating for food supplies to be sent to women and children in Greece during the Second World War. Oxfam International since has grown into a network of member organizations serving 99 countries with disaster relief, advocacy and policy research with the aim of providing long-term solutions for poverty eradication. As of March 2011, Oxfam International reports GBP 2.8 million (USD 4.4 million) in assets. The British affiliate of Oxfam has since been named Oxfam UK.
About Symbiotics
Founded in 2005, Symbiotics provides for-profit investment intermediary services to the microfinance industry as well as business services to investors and practitioners of micro- and small enterprise (MSE) development. Symbiotics works with approximately twenty investment funds (MIVs) and a dozen institutional investors. It has facilitated the provision of USD 895 million in capital to about half a million micro-, small and medium-sized enterprises (MSMEs) through 150 financial institutions in approximately 35 emerging economies. The company also offers Syminvest, a microfinance investment intelligence platform designed to increase transparency and enhance investment capacity in the industry by monitoring regional markets and specific institutions.
About Tenger Financial Group (TFG)
Tenger Financial Group of Mongolia was created by the 2001 merger of Goviin Ehlel and Xac, two non-bank financial institutions that served micro, small and medium-sized enterprises. Tenger Financial Group is the parent company of Xac Bank LLC, Xac Leasing LLC, Horus Nomadic Solutions LLC and Tenger Insurance LLC. Tenger Financial Group is owned by local and international investors including EIT Capital Management LLC, the International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), Mercy Corps, Triodos Bank Group, BlueOrchard Private Equity Fund and several local nongovernmental organizations (NGOs). As of 2011, Tenger Financial Group reported total consolidated assets of MNT 837 billion (USD 605 million).
Sources and Additional Resources:
Symbiotics Press Release: October 8, 2012, “Oxfam fund makes first investment in developing SMEs”
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