Financial Service Provider (FSP) Portfolio
June 2024
$75.8M
Capital Outstanding
50
Active Clients
101
Active Loans
26
Countries Reached
Almost two billion people around the world – more than half of them women – lack access to formal financial services. Although financial services alone will not alleviate poverty, they help people build assets, manage risks and unpredictable income, and gain the freedom to decide how to make and spend money. As people continue to face the destabilizing impacts of global crises, such as the climate crisis, financial resilience becomes even more vital.
MCE’s Financial Service Provider (FSP) Portfolio provides capital to institutions in emerging markets that focus on sustainable livelihoods, investing in women, and increasingly, climate resilience. These providers create opportunities and improve the economic security of their micro- and small business clients with financial products such as loans, savings, and insurance. These providers also offer ancillary services such as technical assistance and financial literacy programs to bolster their clients’ growth.
MCE carefully selects financial service providers who are committed to creating positive impact for women, smallholder farmers, and entrepreneurs in low-income communities.
As of June 30, 2024 our FSP portfolio consisted of $75.8 million outstanding in 50 FSPs operating across 26 countries.
Why Financial Service Providers? »
The FSPs in our portfolio provide a range of financial services—primarily in the form of microloans, savings accounts, and insurance—to people who are excluded from formal financial systems across the developing world. Microfinance borrowers are often self-employed, low-income entrepreneurs or smallholder farmers who lack collateral, steady employment, and a verifiable credit history. FSPs are well-positioned to provide these borrowers with the knowledge, resources, and capital to improve their lives and the lives of their families.
Although the provision of microcredit alone will not alleviate poverty, it is a critical and powerful mechanism that helps people build assets, manage risks and unpredictable income, and gain the freedom to decide how to make and spend money. When combined with other non-financial services, microfinance can promote sustainable growth, improve livelihoods, strengthen institutions, advance gender equality, and provide economic opportunity and security in underserved communities.
MCE lends to FSPs that serve predominantly women and rural borrowers and provide important services such as business education, financial literacy training, and health services. In recent years, the microfinance market has continued to transform and adapt to the realities on the ground; MCE has accompanied this evolution by financing institutions that go beyond traditional microfinance by leasing agricultural equipment and other productive assets.
FSP Investment Spotlights
For a full list of the FSPs in our portfolio, please visit our Portfolio List page.
CrediCampo is a cooperative in El Salvador that works in collaboration with Fundación Campo, its partner foundation, to alleviate poverty and empower rural communities through access to credit and community development services.
Transcapital is a medium-sized microfinance organization that provides access to financial services for over 15,000 end-borrowers in the poor suburbs of Ulaanbaatar and rural areas of Mongolia.
Equity for Tanzania (EFTA) is an equipment leasing company that targets farmers and small and medium-sized enterprises (SMEs) to support job creation and promote economic development in Tanzania.
FSP Portfolio Growth
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FSP Portfolio Diversification
Geographic Diversification
Sector Diversification
*Sector diversification as of Q4 2023, updated on an annual basis.
FSP Investment Criteria
Key Financial Criteria
At least 5,000 borrowers or minimum gross loan portfolio (GLP) of $1M
Capital Adequacy Ratio (CAR): ≥12% or Debt-to-Equity Ratio: ≤5.0x
Portfolio-at-Risk (PAR) >30 plus Rescheduled Loans: <10%
Write-off Ratio: <2%
Operational Self Sufficiency: ≥100%
Yearly audited statements
Strong evidence of measurable and sustainable social impact with a focus on underserved populations
Key Impact Criteria
MCE requires Financial Service Providers to have exclusion lists and client protection systems in place aligned with industry standards. Moreover, MCE prioritizes investments that meet the following criteria:
Livelihoods: Enhances access to finance for underserved segments of the population and improves access to additional essential services such as education or health. Aims to generate economic opportunities and resilience for local economies.
Women: Proactively enhances access to finance and essential services for women. Presents a gender-balanced workforce and client base. Preference for women-founded or women-led companies.
Climate: Integrates climate change mitigation and adaptation considerations in its strategy and offering. Preference for strong climate resilience practices through relevant savings and insurance products, as well as non-financial services.
FSP Deal Structure
Financial Service Providers
Size: US$100K - $3M
Currency: USD, EUR, or local currency
Pricing: 6 - 9% interest in USD
Term: 2 - 5 years
Capital: Senior or subordinated debt
FSP Impact
Portfolio List
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