The Luxembourg Fund Labeling Agency (LuxFLAG), created in July 2006, has granted its microfinance label to two new applicants and has renewed the labels delivered in 2007 to three microfinance investment vehicles (MIVs).
Since its creation in July 2006, LuxFLAG has granted its Label to five microfinance investment vehicles (MIVs).
The following three MIVs applied in early 2007 and their label has been renewed by LuxFLAG:
– Dexia Micro-Credit Fund- European Fund for Southeast Europe (EFSE)- responsAbility Global Microfinance Fund
Two new MIVs have been added to the list that now comprises five MIVs that may use the label delivered by LuxFLAG. The new labels have been granted to:
– Dual Return Fund – Vision Microfinance- responsAbility SICAV(Lux) (with its two sub-funds, responsAbility Mikrofinanz-Fonds and responsAbility Microfinance Leaders Fund)
The MIV market increased significantly in size during 2007 to reach US $3.5 billion and is projected also to grow strongly this year. Over 93 microfinance investment vehicles exist, using widely varying legal structures (source: CGAP, February 2008).
Over half of the MIVs are domiciled in Luxembourg with a total microfinance portfolio of EUR 1.2 billion.
At 31 December 2007, MIVs with the LuxFLAG label hold assets under management of EUR 904 mio, whereof the microfinance portfolio amounts to EUR 651 million.
LuxFLAG will be actively approaching MIVs over the months to come and encouraging fund managers to make contact with the Agency. Eligible MIVs may be domiciled in any jurisdiction that has supervision equivalent to that which is available in EU countries.
The purpose of the Label is to promote the raising of capital in microfinance by reassuring investors that the MIV really invests in microfinance. It is not a guarantee of performance nor does it constitute a recommendation to invest.