Information for Investees

The main objective of the "GLS Alternative Investments - Mikrofinanzfonds" (the Fund) is to provide micro entrepreneurs and private individuals in emerging and developing countries access to financial services – access which would otherwise be limited or non-existent. The resources of the Fund are used to refinance microfinance institutions (MFIs), and, where applicable, to offer technical assistance or financial education.

The Fund invests in MFIs of different sizes and levels of maturity, sustainability and transparency (Tier I to III). It attracts funding from institutional investors and retail customers to invest in MFIs located in Africa, Asia, Latin America, the Caucasus region and Southeast Europe.

Invested Portfolio
per July 2017
> 50.000.000 EUR
Fund ManagementFrankfurt School Financial Services GmbH
Fund AdvisorGLS Bank
Legal StructureSICAV
Country of incorporationLuxembourg

Eligible MFIs have to show some essential characteristics, such as: 

Microfinance needs to be your primary business. That means, your main activity is granting loans to micro entrepreneurs and private households. You offer additional financial services? That's a positive criterium!

Further, your institution should be committed to social and environmental performance. E.g, you should have established transparency for your final borrowers as well as implemented client protection standards (ideally certified by the Smart Campaign).

The social-ecological assessment of your institution based on both negative and positive criteria is a major determining factor for our investment decision. The following list presents an abstract of our exclusion criteria as well as our positive criteria:

Positive criteria:
The fund prefers financing MFI that...
- finance micro enterprises, particularly in rural areas,
- finance vulnerable groups,
- finance meaningful consumer products such as water filters, solar panels, efficient smokeless stoves and similar products,
- finance home purchases or renovations,
- finance smallholder farms with an adjusted repayment taking into account agricultural cycles,
- offer services in underserved regions,
- offer saving accounts and/or micro-insurance,
- offer consulting services for economic and social issues.
Exclusion criteria:
The fund will not invest in institutions that are associated with...
- exploitative child labor,
- overexploitation of forests,
- production or services that violate the rights of indigenous populations,
- violation of labor legislation,
- violation of human rights,
- controversial economic policies,
- non-transparent pricing for final borrowers,

- armor and weapons.

GLS AI - Mikrofinanzfonds can provide financing in EUR, USD and some selected local currencies. It invests mainly in non-securitised loans to refinance regulated and unregulated MFI.

 

Investments

senior loans (up to 4 years)
subordinated loans (up to 7 years)
optional: equity

Minimum
investment sizes

1 Mio. USD-equivalent
Interestmarketrates (non-subsidised)

There is a three-step procedure to apply for financing:

1. Application and Review
Complete the questionnaire on the right and send it to GLS Bank or the Fund Manager. We will examine your application and decide whether it is eligible, based on the Fund’s investment criteria.

2. Due Diligence
Given a positive pre-assessment, the Fund Manager  performs an institutional ue diligence, including on-site visit and interviews.

3. Decision and Disbursement
Given a positive due diligence, an investment proposal is presented to the Fund’s Investment Committee. If the Committee approves the investment, the contract with the MFI is being signed, and the money gets disbursed.


For further information, please contact us at investmentfonds(at)gls.de

Helpful Networks

The GLS Bank is a founding member of INAISE. The International Association of Investors in the Social Economy is a global network of socially and environmentally oriented financial institutions. Created in 1989, INAISE grew rapidly as social finance gained importance, volume and visibility in a number of European and non-European countries. Whether you are starting a microfinance business or are already an established institution, the network can be a viable partner in all stages.


The e-MFP Microfinance and Environment Action Group brings together microfinance practitioners to discuss and exchange experiences in dealing with environmental issues and to create new practical tools to advance environmental microfinance. The Action Group is also intended to act as a think tank that disseminates its results among e-MFP members and the microfinance sector at large with a view to increasing the awareness of and commitment to act on these issues. It is meant both as an internal knowledge-sharing and external awareness-raising platform that serves as a reference in the microfinance sector.