The USD 25 million (INR 196 crore) funding round in Light Microfinance was led by British International Investment (BII) with existing investors Incofin, Nordic Microfinance Initiative and Triple Jump. Light Microfinance is one of the fastest growing MFIs in India and aims to provide responsible financial services for low-income families excluded from the financial system in India, using a strong technology platform. It reaches over 200,000 clients, exclusively women in rural and semi-urban areas.

Chauhan is one of those women. She has been a member of Light Microfinance for over five years. As the primary wage earner of a six-member family, she was in dire need of income augmentation. She didn’t start in cattle rearing, but with the first of her loans from Light Microfinance, she started vegetable farming. Eventually, her business acumen enabled Chauhan to expand. Her income increased and she has even planned to hire two employees.

This new funding will be used for geographical expansion into new states to diversify the company’s product lines and continued investments in technology and digital initiatives. Co-founder and Managing Director of Light Microfinance, Deepak Amin, comments: India continues to see a huge demand for financial services, especially in rural India as households try to recover from financial difficulties faced by them due to the pandemic and at the same time get integrated into the mainstream Indian economy. Light Microfinance aims to be a key pillar of this growth story by delivering timely, high-quality financial services to its customers.

This is the story of Ana Mamani Quispe, the story of one woman who inspired a whole community to rally around to overcome the sudden challenges. The story of many families who managed with the support of microfinance institution, to maintain their income in difficult circumstances.

Ana Mamani Quispe, 38 years old, is a client of the Bolivian microfinance institution Crecer since 2007. She lives together with her husband and son in Bravo, a village just under km from the city of El Alto. The village is located in the Interandino valley, an area that lends itself well to the cultivation of grains and fruit. Ana also earns her income from growing maize, among other crops.

When the pandemic broke out, Ana was in danger of getting into trouble. She could no longer reach her customers and she started suddenly to doubt whether she would find a market for her products. She brought herself in contact with as many people as possible via WhatsApp: friends, relatives, landlords, transporters, other farmers and middlemen. She succeeded to convince many to unite. The farmers would buy their seeds together (with the support of a credit from Crecer), and they would help each other with the shipping and selling the products. In this way she and many other farmers assured themselves of sufficient buyers. Sales mainly happened through online channels. Ana’s creativity and entrepreneurial spirit, together with the help of Crecer’s credit, helped many families to maintain their income in difficult circumstances.


Invest in Visions and Incofin Investment Management look back on 1 Billion euro deployed for micro-enterprise financing, and more to come.

The partnership of Invest in Visions and Incofin Investment Management, which goes back to the beginning of 2015, has passed a milestone: the collaboration between Germany’s top microfinance asset owner and Belgium’s specialist financial inclusion investor has led to more than 1 billion euro of disbursements through over 300 transactions with financial institutions in 38 emerging markets.

Edda Schröder, the Managing Partner of Invest in Visions (IIV), and Geert Peetermans, Managing Partner of Incofin, report that – globally – approximately 87 million micro-entrepreneurs are clients of the financial institutions supported by their efforts, and 47 million women borrowed small amounts from them. At least 16 million clients are estimated to come from rural areas. The financial institutions provide for 233,000 direct employment of which 44% is female staff.


While the microfinance fund of Invest of Visions started in 2011, the formal beginning of the partnership of Incofin and IIV brings us back to 2015. Can you explain us how the idea for partnering started floating?

Edda Schröder, Managing Partner Invest in Visions

Edda Schröder, Managing Partner Invest in Visions

Edda Schröder: Well, in 2015 IIV took over the portfolio management of the IIV Mikrofinanzfonds. At that time, we had a small team without presence in the emerging markets. Therefore, we started looking for a partner who could do sourcing and due diligence of microfinance institutions on the ground. I had been aware of Incofin as a specialist in microfinance for a while. Before launching the fund, I had to do a lot of advocacy work to convince German regulators to introduce public microfinance funds for private clients. To that end, I worked closely together with some sector associations and that is how I met Loïc De Cannière, the CEO of Incofin at that time.  

Incofin was already considered a specialized asset manager and advisor for microfinance. The microfinance sector associates Incofin with high-quality work, so it was a natural choice. We were all very thrilled when Incofin decided to accept our offer. 


Also for Incofin it was a new setup. So, I can imagine that in the beginning things were not always that easy.

Geert Peetermans: This partnership was indeed unexplored territory to us. Previously we had set up a few own initiatives such as RIF I and II for example. But teaming up with IIV brought some interesting benefits to the table. Although this was new to us, we realized a collaboration like this would make a lot of sense because of growth perspectives. IIV had launched the first public microfinance fund in Germany, which we saw as a market with a lot of potential.  So, we were both pioneers in a sense.

Edda Schröder: It was a bit of an adventure. The fund was launched in 2011, it took until 2015 to collect 80 million euro. It is important to remember that this was a new asset class, people didn’t know about microfinance and were not easily convinced to invest in the fund. Giving loans to MFIs in Kyrgyzstan for instance, a country that is far away, sounded too exotic. Therefore, it was hard work to gain people’s trust that we would get back the money. The operational side was also challenging at the beginning, including all parties that were involved, such as finding efficient fund services. Now we have everything in place.


How did the partnership manage Covid-19?

Edda Schröder: The risk team of Incofin proved its tremendous added value. Incofin’s risk managers responded quickly, they were really hands-on. All the necessary information was provided to us quickly. It showed us the great advantage of having Incofin on the ground in the emerging markets. The teams in Colombia and Cambodia, for example, knew immediately what was going on. In the midst of uncertain global developments, it is really helpful and reassuring to have a trustful partnership, like the one we have with Incofin.

We also made a joint decision to be cautious about new loans. I must say, that IIV experiences fewer problems with the consequences of Covid-19 than I initially expected. One reason is because we have become part of a collaboration of microfinance investors working together to support the liquidity of the entire sector.


Geert Peetermans, Managing Partner Incofin IM

Geert Peetermans, Managing Partner Incofin IM

Which other changes or developments do you see happening?

Geert Peetermans: The scope of the theory of change has evolved: today the object of financial inclusion is no longer only about income generation, but also about education, affordable housing, etc. This opens up the impact spectrum towards different SDGs.

Edda Schröder: I fully agree. We are also looking at SME financing. As a German microfinance fund, we are quite strictly regulated: we are only allowed to invest in microfinance. That means microfinance institutions that pay out microcredits of a maximum of EUR 10,000. But what about the missing middle? It also needs more capital; there is a shortfall of USD 4.5 billion for one million SMEs in emerging markets.

Geert Peetermans: Together we have been working, within the regulatory framework of course, to find possibilities to include also what goes beyond traditional microfinance: microleasing, affordable housing, or for example a partner institution like Bayport in Colombia which recently was added to the portfolio. Bayport services mainly people working in the public sector who have a business on the side. So, they reach people who are not the typical microfinance clients.  

Edda Schröder: Another challenge is the hype around sustainable finance in Europe: the EU taxonomy, which entails many additional documentation requirements for an impact investor. Our investors are also asking for more impact data. You have to prove that you really are an impact investor, and that it is not just green washing. At the same time, it could be a great opportunity for us to set up even more new products to attract more investors and help the microfinance sector grow.

It is an opportunity to tell what microfinance is all about. For my experience it is that the majority in Germany, even in the financial sector, still doesn’t really know what microfinance means. So, there is still a huge potential. And it needs transparency and more education.


When we are talking about the future of the microfinance sector, sooner or later the term digitalization falls.

Geert Peetermans: With good reason. We see different kinds of players coming up, like for example fintechs. And in countries like Colombia and Kazakhstan, we see new promising developments in this field. These are often still young and small in size, therefore we have to assess carefully when they will become investment ready. Nonetheless they represent  definitely a new channel to keep in sight as it is expanding at high pace. Microfinance clients look and will increasingly look in their direction to find an answer for their credit needs.


Clearly, still a lot is to accomplish, and maybe best together? How do you see the partnership between IIV and Incofin evolving?

Edda Schröder: I hope we can build on our cooperation and partnership in the future and can grow jointly. One of the challenges we see in the future and where we can use the support of our partner is the higher degree of regulation coming from Europe: we will need more data, for example. Thus, we are striving for a long-term relationship.

Geert Peetermans: I can fully echo that.

Incofin cvso disburses a EUR 1.7 million loan to Bina Artha, the financial institution that, through micro-loans, allows hundreds of thousands of entrepreneurial women in Indonesia to build a better future for themselves.

Indonesia is not only known for its idyllic beaches, but also for impressive economic growth rates since the Asian crisis in 1997. The economy is now part of the top 20 largest economies in the world. This growth went along with important poverty reduction, with a poverty rate at 10% in 2020, while at the turn of the century that group was still twice as large. However, there are still around 26 million people living below the poverty line. The consequences of COVID-19 – which might push between 5 and 8 more million Indonesians into poverty – is therefore a setback. It shows that economic progress is still very fragile for a large part of the population.

While Covid-19 is having a significant impact on the Indonesian economy, Incofin CVSO has at heart to support microfinance institutions (MFI) even in times of crisis. In this context, CVSO has provided a loan of EUR 1.7 million to PT Bina Artha Ventura (Bina Artha) at a time of tight liquidity management and operations stabilization efforts from the MFI. The support from its international lenders partly explains Bina Artha’s resilience during the crisis.

Bina Artha – founded in 2011 – is one of the biggest institutions in Indonesia in terms of portfolio size. The MFI brings micro-credits to more than 350,000 low-income households in rural communities – increasing financial inclusion. In Indonesia, 51% of the adult population still do not even have an account in a financial institution. Therefore, with a total population of 270.6 million, there is a huge market growth potential for microfinance.

Especially low-income women have barely access to the formal financial sector because they lack independence and education. That is why microfinance institution Bina Artha focuses mainly on women who don’t have or have only partial access to the formal financial sector.

By increasing the access to capital, Bina Artha supports the income generation of entrepreneurial women, such as Bu Sabaria Bunga Lele. I used to sell my vegetables with a cart going around from place to place. At the end of 2017, I decided to take a loan from Bina Artha and open a shop on the road side near my house. Now, I provide a wide selection of fresh vegetables, spices, dried fish and other products. The people of the community around my shop buy their necessities from my stall and lots of cars stop with people from further afield as well. Thanks to the strategic location, my store is also doing fine despite the pandemic.

Incofin cvso believes that Bina Artha is well positioned to efficiently and rapidly grow further, thanks to its business model, support from its Credit Access network and investments in technology. They have for example integrated third party payment services into their core banking system.

“Bina Artha has been very transparent in dealing with clients and funding partners and therefore continues to gain support. Incofin is a proud partner of Bina Artha, via them we can deliver our impact and open up opportunities to many Indonesians for a better livelihood”says Vuthy Chea, Deputy Regional Director Asia of Incofin Investment Management.

The regions where Bina Artha operates are in dark blue.

At the beginning of the pandemic, COVID-19 put a break on a vast majority of businesses around the world. Logistical chains were broken, borders were closed, planes could not fly, people could hardly move. This created massive disruptions in many sectors, including hospitality, tourism and any other industry reliant on imports or exports. Slowly, in some regions and sectors, businesses have begun  to recover from the impact of the pandemic by adapting to this new situation. 

Meanwhile, sectors that work to produce and provide a basic good, embedded in domestic economies dynamics, serving local populations, are not only surviving… in certain cases, they are even growing faster than expected. It is the case of local small scale agriculture production. For instance, Incofin IM noticed that the agricultural portfolio in comparison to its financial inclusion portfolio tends to face less risk.

Similarly, water businesses that increase access to drinking water to local populations seem to manage well in these times. Since the start of the pandemic, Incofin IM, along with its partner Danone Communities, have been monitoring a number of water businesses around the world to better understand the impact of COVID-19 on their operations.

This article is part of a series of articles titled “Water businesses in COVID-19 times, even more needed, even more wanted”. In the first article we discussed the case of water kiosks (safe water enterprises). Today, we explore the realities faced by small scale, decentralised piping water companies. These companies typically operate where public utilities do not go, serving as “last mile water providers” for many of the bottom of the pyramid population. They directly connect a pipe from a neighbouring water station to household premises.

All around the world, COVID-19 awareness campaigns have sensitized people on the need to keep a strong immune system. In fact, drinking water consumption has been increasing and these decentralised piping water companies have been there to provide the supply, while reinventing themselves.

Four key conclusions can be drawn from the decentralised piping companies during COVID-19 times:  

  1. Where public utilities fail, privately-owned piped water companies play a crucial water access role, as they help address households’ water needs while complying with the social distancing constraints linked to COVID-19.
  2. Despite offering one of the lowest prices per litre, revenues of decentralised piped water supply companies are highly resilient, since water consumption, a necessity, is non-cyclical. In fact, many pipe networks, especially in developing countries saw consumers’ demand increase.
  3. Because of its strict requirements on social distancing at best, full lockdowns at worst, the pandemic has accelerated the need and implementation of digital solutions including digital finance, automated services, and remote monitoring to be more efficient and resilient in the future.
  4. Decentralised piping water companies’ advantage of steady cashflows has become more prominent during the pandemic. Combined with the social impact of providing a necessity at an affordable price and offering better hygienic and health options to underserved populations, the business model makes a strong proposition to impact investors.


CONCLUSION 1: Piped water supply’s ability to provide on-demand on-premise water access addresses households’ water needs of high public health relevance in a social distancing-compliant manner.

While access to safe tap water is usually taken for granted in developed countries, in the developing world, a vast population lives off grid and needs to venture out to collect water. This water may not be adequately treated and expose people to risks of various water borne diseases. During the time of COVID-19, these daily water collection journeys carry greater risks. Without on-premise piped water supply and sewage systems, quarantined people essentially lose access to water and sanitation services. Stock-outs of bottled water, interrupted water transport and increased prices are other risks that many face in this context.

But it doesn’t have to be so. Well managed, small scale, decentralised piping companies can extend the water grid to the underserved population and equalize the on-demand on-premise access to safe drinking water.

In Cambodia, while access to water in urban areas is catered by public utilities, rural populations often have no other solution than to collect rain water or buy from water trucks. While the  government has put water access high on its agenda, it also recognizes that it does not have the means to reach the whole country. The private sector needs to play a role. In such context, the government decided to grant a 20-year exclusive license in rural Cambodia to attract private investors.

Khmer Water Supply Holding (KWSH) runs a portfolio of water stations across 4 provinces in rural Cambodia. Each station serves thousands of households in one to two local districts. A centralised engineering team ensures the stations are efficiently managed and adhere to the high quality standards, which are more stringent than national standards. KWSH is also pilot testing a project to install handwashing sinks for connected households at a below market price, with the hypothesis that the sinks would not only improve household hygiene practices but also increase water consumption by an amount that is more than enough for KWSH to recover the losses in the sales of the sinks. In this context commercial and social interests are well aligned.

Another example is 3BL, a water business in Ethiopia, that provides affordable piped water to rural homes and farms. Ethiopia is considered as a ‘water stressed’ nation, due to the accelerated increase in population size over the last 10 years. In 2017, 89% of the people had no access to safely managed drinking water creating a demand that can be filled by the water businesses. Ethiopia aims to invest in water related infrastructure to address the obstacles to safe drinking water and to increase its access.

3BL works with communities that have already existing infrastructure: 3BL connects the pipes to the households and is responsible for the maintenance. The water is first treated at the source before it is released through the pipes. The company uses technology like water meters to quickly detect and repair leaks so that the communities have a continuous water supply.

The pipe network supply is an ideal model in times of lockdowns and social distancing because on-demand, on-premise access to drinking water makes physical contact avoidable.


CONCLUSION 2: The revenues of decentralised piped water supply companies are highly resilient

While the economic impact of the outbreak prompted people to cut back on spending, heightened public health awareness has made it clear that safe water is not the commodity to save on. This is especially the case in underserved areas in developing countries, as those “fresh onto the grid” tend to consume based on need rather than want: a person with a tap at home in rural Cambodia typically consumes 70 litres water per day, a data point that is easily upward of 200 litres in the United States.  As such, what KWSH has observed among its clients during the COVID-19 crisis is that water consumption outperformed projections and strong bill payment rates.

This increase in water consumption was also observed at 3BL in Ethiopia. However, in the beginning of the pandemic, the company faced delays of payments because many of their clients who were economically negatively impacted did not have any savings to pay their water bills.

Both companies explain that once a certain level of trust has been reached and the customers understand the value of having clean water at home, the demand increases as the access becomes more convenient, particularly when compared to other water sources that are not on premise.


CONCLUSION 3: the pandemic has accelerated the need and implementation of digital solutions, including digital finance, automated services, and remote monitoring.

The first impact of COVID-19 made many companies realise that in order to ensure business continuity and to remain competitive in this quickly changing context, accelerating and analysing their digitalisation strategy was a necessity.  Although this entails an initial (capital) investment, which is less favourable in times of a crisis, the positive long term effects are clear and the pandemic has shown that digital applications can be crucial to ensure business continuity. Digital innovations in the water sector can contribute to reducing water loss and increasing operational efficiency. Digital solutions have been developed for billing and payment, pre-paid systems, quality and process control and operation, water loss reduction, and consumer relations.

3BL uses digital technology for real time tracking activities, maintenance and invoicing. All these functionalities can also be used offline considering the low internet penetration rate in Ethiopia. The company further recognised the importance of the digital tools that came in handy during the pandemic in ensuring the smooth running of the operations.

KWSH already planned before the pandemic to prepare for a move to a cloud based solution for customer relationship management and work-order. This will enable the company to scale efficiently. Additionally, auto-head meters are introduced at water treatment plants to execute real-time monitoring and reduce non-revenue water. KWSH will continue to invest in these types of digital solutions, as this improves overall business continuity.


CONCLUSION 4: Steady cashflows and the social impact of providing a necessity at an affordable price and offering better hygienic and health options to underserved populations, make that decentralised piping water companies’ have a strong proposition to impact investors.

The COVID-19 pandemic has posed a significant challenge in the progress towards the Sustainability Development Goals (“SDGs”)[1]. In 2017, the World Bank pointed out that USD 29 billion is needed on a yearly basis to achieve basic WASH needs and USD 114 billion to achieve safely managed WASH needs in 140 developing countries[2]. Already pre-COVID, in 2019 the World Bank indicated that the present value of additional funding needed in the WASH sector through 2030 would exceed USD 1.7 trillion[3]. In addition to other crises such as the accelerating climate change and the growing debt crisis in many developing countries, COVID-19 has had a negative impact on financing the WASH sector and SDG 6, and has widened this financing gap even more. The pandemic reinforced the importance of access to safe and affordable drinking water[4].

Small-scale, off grid decentralised piping water companies is a more CapEx intensive business model with a longer payback period, thus they have traditionally faced a more challenging funding landscape when compared to a franchisee water kiosk model. However, in a crisis environment like COVID-19, piped water supplies’ resilience, backed by steady demand and stable cashflows truly stands out. Part of this resilience also lies in the fact that compared with other sources, piped water is typically priced at a level affordable to low income populations, who during a crisis time would rather economize other discretionary spending over water consumption, which is necessary and affordable. Multilateral organizations such as OECD, UNDP and ADB typically define affordable water as households spending less than 3-5% of their income on water. In the case of KWSH, a typical monthly water bill for a household of 5 individuals is around USD 5, which is well below the affordability threshold, even for those living on less than USD 1.9 a day, the international poverty line. The model thus makes an appealing case to impact investors who can bring patient capital and a comprehensive value creation strategy in exchange for stable financial return and social impact achievement.

In these turbulent times, Incofin IM is actively working on creating short-term solutions to support our investees, while also continuing to build initiatives that will support entrepreneurs to drive growth and impact in the long-term together with our partners such as Danone.

By investing in the water companies and by offering technical assistance, the Water Access Acceleration Fund (W2AF), aims to contribute to SDG 6 and accelerate the development of the water sector in developing countries.










German Development Minister Gerd Müller announces the launch of ALF, the new initiative of the ministry with Incofin IM and German bank KfW.

The Agri-Finance Liquidity Facility (“ALF”) is a debt facility investing in sustainable agri-enterprises in mainly Africa and Latin-America, funded by KfW/BMZ and managed by Incofin IM as the Alternative Investment Fund Manager.

With a size of EUR 40 million, the facility will support actors in the sustainable agri-food value chain in developing and emerging countries to maintain their operations during and after the Covid-19 crisis.

To offset the pandemic’s negative impacts on the sustainable agricultural production sector, KfW approached Incofin IM to develop a proposal for an emergency liquidity facility initially targeted for investees of the Fairtrade Access Fund (FAF). After reviewing the proposal, it was jointly decided to expand the focus of the facility to other agri-finance lenders, principally members of the CSAF (Council of Smallholder Agricultural Finance), and their investees. This will allow the facility to be as much inclusive as possible and to generate further impact.


Covid-19 caused a drop of more than USD 500 of the annual income

Covid-19 disrupted global food systems, testing the resilience of farmers who already receive the least value for their contributions to agri-food value chains. Many farmers, forced to harvest with significantly reduced personnel, lost quality and volumes of their crops.

As household budgets shrank, the sustainability of a product lost its strength as a purchasing argument. Fairtrade sales suffered a blow. On average, this meant a drop of more than USD 500 in smallholder farmers’ annual incomes, representing a substantial impact on their household economies.


Launching video ALF