responsAbility publishes Micro and SME Finance Market Outlook 2018

Investments in micro and SME finance: solid risk-return profile and measurable impact

Zurich, 21 November 2017 — The latest edition of responsAbility’s annual Micro and SME Finance Market Outlook highlights the potential of debt investments in micro and SME finance against the background of macroeconomic trends. An analysis of risk-return profiles shows that spreads for investments in microfinance portfolios are in line with or higher than those of securities rated Ba3 by Moody’s. This rating system and systematic impact measurement provide investors with transparency on micro and SME finance portfolios.

Having funded micro and SME (MSME) finance institutions in developing countries since 2003, responsAbility is today considered the leading private investor in this sector. Its Micro and SME Finance Market Outlook, first published in 2010, has established itself as the sector’s key publication on trends in global microfinance markets.

Growth in these markets is expected to accelerate in 2018 and recovering commodity prices should benefit portfolio quality in commodity-exporting countries.

For the first time, this year’s edition of the Micro and SME Finance Market Outlook explores the potential for cross-border financing in this sector – the key focus of traditional microfinance funds. To this end, responsAbility analyses the most important micro and SME finance markets based on financial sector coverage and demand for financing. The analysis points to clear growth potential in most markets, including those that are considered relatively mature.

Another new feature of this year’s edition is a rating for microfinance portfolios. It is based on a comparison of the historical default and loss rates from responsAbility’s 14-year track record with those shown by Moody’s for different rating tranches. The result: Spreads for investments in MSME finance portfolios are in line with or higher than those of securities rated Ba3 by Moody’s.

Roland Pfeuti, Head Investment Solutions & Sales and member of the Executive Management of responsAbility, comments on the new features of this year’s Outlook: “Micro and SME finance in developing countries is gaining importance as an attractive, uncorrelated private debt market. With our Market Outlook we hope to fill the information deficit by complementing market potential with hard data.”

Microfinance Outlook EN 2018

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Contact
responsAbility Investments AG
Ulli Janett, Media Relations
+41 44 403 06 33
ulli.janett [at] responsAbility.com
 
About responsAbility Investments AG (responsAbility.com)
With USD 3.3 billion of assets under management invested in over 550 companies in 97 countries, responsAbility Investments AG is a leading asset manager in the field of development investments The company supplies debt and equity financing to firms in emerging economies and developing countries. Founded in 2003, the company is headquartered in Zurich and has local offices in Bangkok, Hong Kong, Lima, Luxembourg, Mumbai, Nairobi, Oslo and Paris. Its shareholders include a number of reputable institutions in the Swiss financial market and its own employees. responsAbility is regulated by the Swiss Financial Market Supervisory Authority (FINMA).
 

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