“If there is no financial injection, there is no hope,” said Peter Fanconi, chairman of Swiss impact investment managers BlueOrchard Finance Ltd. “Today, about 2.3 billion people have no access to credit or financial services. So microfinance is bridging this gap.”
Fanconi spoke to The Japan Times on Nov. 16 during a brief visit to Tokyo to update investors on the Japan ASEAN Women Empowerment Fund (JAWEF), which was launched in September 2016 with support from the Japanese government, the Japan Bank for International Cooperation, the Japan International Cooperation Agency, Sumitomo Life Insurance Co. and others.
BlueOrchard, which manages the JAWEF, started in 2001 under the initiative of then U.N. Secretary-General Kofi Annan and has offices in Zurich, Geneva, Luxembourg, Lima, Phnom Penh, Tbilisi and Nairobi.
“The idea from day one was to fight poverty and to create financial system funds in order to secure that goal,” said Fanconi.
BlueOrchard started the dialogue within the JAWEF as a microfinance fund to help empower women living in member states of the Association of Southeast Asian Nations.
“We have invested $120 million, providing loans to 320,000 individuals, out of which probably 90 percent are female customers,” Fanconi said.
“That is something Japanese society can be proud about because it’s also your money,” he said.
Many people first heard of microfinance when the 2006 Nobel Peace Prize was awarded to Muhammad Yunus and the microcredit institution Grameen Bank he founded in Bangladesh over 30 years ago.
“Microfinance is an instrument to fight poverty,” Fanconi said. “Microfinance provides credit to poor people who do not have the collateral. Instead of giving development aid or philanthropic support, this is really a mechanism to provide credit and to allow an individual to become economically independent.”
The company’s flagship BlueOrchard Microfinance Fund is the world’s largest such fund at $1.2 billion with an annualized 4.3 percent return. According to Fanconi, the fund is a “very stable” fixed income, providing “on a monthly basis a return of roughly 30 basis points.”
BlueOrchard board member Omar Qandeel cited an example of microfinancing helping a woman buy a machine, which led her to make goods faster and hire workers.
“People are really champions,” Qandeel said. “They just need a chance.”
Added Fanconi, who concurrently serves as chairman of a bank and board member of another bank in Switzerland, “It’s the first time in the financial industry I personally have seen investment opportunities that really create an impact for everybody involved. This is the only place where you balance all interests.”
For more information, visit www.blueorchard.com