Riskebiz is setting up a microfinance fund to invest in Tier 2 and Tier 3 Microfinance Institutions (MFIs).
The fund will be an investment package of equity and quasi-equity investments, active governance, technical assistance, and management advice. This means that, in addition to the capital investment in the form of equity, Riskebiz will also provide related technical assistance and advice to the microfinance institutions (MFIs) that the fund invests in.
Technical assistance and management advice will be provided through the Technical Services Facility (TSF).
The fund will seek to make investments in those MFIs with solid operations, strong credit profiles, and future strategic and financial prospects, so as to maximize the fund's risk adjusted return on capital.
The aim of the fund is to provide superior financial and social returns to investors (double bottom line).
Investments will be made primarily in MFIs but may also include microfinance "infrastructure" companies that work with MFIs.
Technical Services Facility
The Technical Services Facility is the Riskebiz Fund adjoined facility that provides technical assistance programs that build capacity in fund portfolio companies and support industry development. The TSF is an integral part of Riskebiz's investment approach.
The primary objective of the TSF is to help the MFIs in which the Fund invests to improve efficiency, track operations more accurately, increase transparency, and reach new customers.
For Tier 2 and Tier 3 MFIs, technical assistance is becoming a critical element of a competitive "investment package". The need for technical assistance is not just a function of offsetting risk and underwriting costs, it is an element in simply being competitive as an investor.
Examples of the technical assistance Riskebiz will provide through the TSF include:
- Implementing mobile payment solutions.
- Leveraging mobile applications to distribute microinsurance and microcredit products.
- Setting up management information system (MIS), reporting and accounting systems.
- Upgrading technologies to improve efficiencies and productivity.
- Implementing financial reporting technologies i.e. converting financial statements to XBRL format and uploading to MIX Market.
Management advice, which may not be entirely focused on technical assistance, will also be provided through the TSF.