What is Microfinance?
Microfinance services originated as a poverty alleviation tool but gradually progressed to ensure financial inclusion.
What are the benefits of Microfinance?
Even though there is no shortage of initiatives in emerging economies and lower-income countries, there is often a lack of financial inclusion. Microfinance services reach marginalized clients, typically indigent populations who may be socially excluded or geographically isolated. Consequently, microfinance provides microcredit to entrepreneurs and small businesses that lack access to credits. These Microcredits empower self-sufficiency and economical independence by promoting entrepreneurship. Thus, microfinancing can contribute to a significant improvement in living conditions for millions of people, and at the same time contribute to the support of many of the UN SDGs (see TOC EMF).
Role of EQ in Microfinancing?
The EMF Microfinance Fund was founded in 2008 to catalyze access to capital where it was needed most and promote financial inclusion. EQ’s target demographics are those who live in developing economies, and are often overlooked by the mainstream financial system. The EMF is a purely microfinance debt fund, whose aim is to reach as many underserved people as possible. Additionally, the EMF is invested in a diversified portfolio, with different sectors and a variety of MFIs in targeted countries. This is to mitigate debt instruments default, country and liquidity risk while optimizing the social impact and financial inclusion of the investment portfolio. In order to secure a stable return on investment, the local currency exposure is fully hedged against USD (US Dollars). The EMF Microfinance Fund, which is advised by EQ, is growing every year, with its reach and positive impact being felt by more people every day. Meanwhile, we have managed to reach roughly 400’000 end clients with 74% of them being women. EMF also positively contributes to 13 of the UN Sustainable Development Goals (SDGs).