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What is Vision Microfinance?

Vision Microfinance helps others to help themselves and has a dual return: it gives poor, economically active people the chance, to break free from poverty thanks to their own virility. In addition, investors profit from a series of advantages.

Who is Vision Microfinance addressed to?

Vision Microfinance is addressed to poor and low-income people who lack the financial means to realise their entrepreneurial ideas. The purchase of a sewing machine for example provides a loophole out of poverty for a tailor. In some countries Vision Microfinance is used by women in particular which enables them to gain a better standing in their family and in society. People who are not able to become economically active require other instruments of development politics.

In which countries does Vision Microfinance invest?

Theoretically, Vision Microfinance can invest in any country in the world. The focus, however, is on emerging markets in Latin America, Eastern Europe and Asia.

How many people has Vision Microfinance helped so far?

120 m Euros have been distributed since spring 2006, which have helped approx. 200,000 families to a better future. Vision Microfinance enables - amongst others - access to food, to medical supplies and to education for the children. Please click here for success stories of micro entrepreneurs.

How can I be sure that my investment arrives where it is supposed to?

Vision Microfinance hands out direct loans to microfinance institutions in developing countries. All transactions before, during and after a loan agreement are checked thoroughly and are absolutely transparent. All contracts for example are deposited with the investment manager,Absolute Portfolio Management GmbHin Vienna, and the depositary bank, UBS Luxembourg S.A.

Microfinance institutions, in return, hand out micro credits to poor, economically active people. Naturally, all transactions are controlled in detail, microfinance institutions are visited on-site and their social performance is assessed. This is why you can be sure that your investment is not dissipated but helps a multitude of micro entrepreneurs.

 

Why are loans handed out via microfinance institutions instead of directly to the micro entrepreneurs?

Microfinance institutions offer an additional security component. They are on-site in emerging markets and check the living circumstances of the micro entrepreneurs thoroughly before a loan is approved. Microfinance institutions have a very close contact with their clients, they visit them regularly and offer trainings and further education alongside microfinance products. Besides, the administrative burden of a direct issuing of loans by the fund to micro entrepreneurs would be impossible.

How high are the interest rates that micro entrepreneurs have to pay for a micro credit and what are the components?

The interest rates for a microcredit are 2 – 4 % per month. These conditions are very attractive to micro entrepreneurs as local money lenders charge usurious interest of up to several hundred percent per month.

The interest rates consist of the following components:

Are micro entrepreneurs able to pay back the micro credits?

Experience has shown that an impressive 98% of micro entrepreneurs are able to pay back their micro credits in time and with interest. Micro entrepreneurs appreciate the often unique chance a micro credit offers and strive hard to repay the credit . An added incentive is the fact that punctual repayment is a prerequisite for obtaining a further credit.

Often micro credits are handed out to a group of people whose members are solidly liable for the repayment. If an individual does not pay back the credit, he/she would lose face. The strong social structure in developing countries and the regular visits by the microfinance institutions are further reasons for the high repayment ratio.

Which risks do I take on if I invest in Vision Microfinance?

Possible risks of an investment in Vision Microfinance are, for example, a loan default of the microfinance institution or of the micro entrepreneurs. There has been no single loan default of a microfinance institution since the launch of Vision Microfinance. The repayment ration of micro entrepreneurs is 98%.

Natural disasters, such as the Tsunami in Asia, can destroy small enterprises and may have a negative impact on the repayment ratio of the micro entrepreneurs. However, experience has shown that during the reconstruction period following a natural disaster the demand for microfinance products increases. The same is true in emerging markets and developing countries which are affected by political turmoil or economic problems.

Which effects does the financial crisis have on Vision Microfinance?

The financial crisis has not had a material impact on the microfinance institutions (MFIs) Vision Microfinance invests in. The financial and operational ratios of the invested MFIs have remained quite stable. The MFIs’ portfolio quality and profitability indicators, which deteriorated slightly over the last year, continue to exhibit a sound behaviour in comparison to mainstream banks and other financial institutions.

Most MFIs have generally adapted very well to the new situation. They are willing to pay higher interest and have lowered their profit and growth forecasts for 2009. MFIs in countries which are better integrated into the financial system have been hit harder by the crisis. However, these MFIs are - similar to more developed economies - better equipped to deal with adverse external influences.

Micro entrepreneurs who are excluded from the financial markets at large have so far been spared by the financial crisis. It is, however, possible that some microfinance institutions will slightly raise the interest rates for micro credits in future.

How and with what minimum amount can I invest in Vision Microfinance?

Private investors can take part in Vision Microfinance with a minimum investment amount of 1,000 Euros (institutional investors with 250,000 Euros). Please contact your financial adivser or your local banking branch for an investment. Also, please don´t hesitate to contact us if you have any queries.

Who is behind Vision Microfinance?

Vision Microfinance has been managed by Absolute Portfolio Management GmbH since its start in 2006. Dr. Vardanyan, an Armenian long term asset manager and author of many research papers on emerging markets and developing countries, is accountable for the fund. The Swiss company Symbiotics SA is the investment adviser.