BIO invests $1.5m in FINCA Malawi for Microfinance, SME Lending

BIO recently began disbursing funds as part of a four-year loan of USD 1.5 million to FINCA Malawi, a microfinance institution (MFI) owned by the US-based firm FINCA Impact Finance. The microbank will use the funds for on-lending via its 23 branches and 63 agents. In addition to group and individual loans, FINCA Malawi offers savings and insurance services, including via mobile phones. As of June 2020, FINCA Malawi has 70,000 customers, USD 5.7 million in client deposits and a gross loan portfolio of USD 12.3 million. While 99 percent of the MFI’s customers are microfinance clients, 16 percent of its portfolio is outstanding to small and medium-sized enterprises (SMEs). Its group and individual loans range in size from the equivalent of USD 25 to USD 150,000.

FINCA Impact Finance is a for-profit entity majority-held by FINCA International, a US-based NGO formerly known as the Foundation for International Com­munity Assistance. The 20 financial institutions of FINCA Impact Finance serve 2.74 million clients in 20 countries with 10,300 employees handling a gross loan portfolio of USD 794 million and USD 420 million in client deposits as of the first quarter of 2020. The firm supports its microbanks with strategies including “investments in call centers, data collection, digital field automation and credit scoring, as well as launches of mobile, online and agency banking.”