Incofin Investment Management invests USD 2.1 million in the Ningxia Dongfang Huimin Microfinance Corp. Ltd (Huimin) equity through its agriculture-focused fund agRIF. As a shareholder, Incofin wants to support Huimin scale their financial services outreach to female smallholder farmers in Ningxia, one of the poorest provinces of China. Additionally, the Danish development financial institution IFU joined this round of capital increase and invested as well USD 2.1 million in Huimin.
The Ningxia region faces extreme aridity and barren soil. The harsh natural environment causes slow economic development and high poverty rates. In particular, rural women in Ningxia have historically been faced with a low social status and are often confined to their housework. Despite their challenges, they are eager to be respected and integrated into society – this is where Huimin came in. Founded in 1996, Huimin was originally set up as an NGO with the mission to reduce poverty by transforming the rural female population into economically active agents using microcredit. Targeting the poorest segment of the population, Huimin’s average loan size is only USD 3,500, about one-third of China’s GNI per capita. As Huimin grew in size and in professionalism, the conviction that sustainable impact is predicated on financial sustainability and good governance became increasingly convincing. In 2007, Huimin successfully transformed into a for-profit microcredit company, while keeping intact its commitment to rural poverty alleviation.
Huimin is among the leading institutions that adapted the Grameen lending methodology to service the Chinese rural demographic. Farmer families connect with each other to create a guarantee team, and these teams in turn form a village-level credit group. Over the years, Huimin has significantly expanded its scale of operation. Through its network of 11 branches and subsidiaries, Huimin now serves over 14,000 clients, all of whom are rural residents and of which 97% are female.
The success of Huimin stems from their holistic poverty alleviation and rural development strategy, which combines inclusive financial services with non-financial activities, such as workshops on agricultural techniques, anti-desertification initiatives and cultural activities to build female clients’ self-confidence.
Dina Pons, Partner at Incofin and Shareholder Representative of agRIF, said: “Huimin’s commitment to providing inclusive financial services and capacity building activities to low-income female farmers is well aligned with agRIF’s mandate. We are pleased to contribute to the sustainable growth of Huimin and to support its efforts in scaling its impactful work.”
Long Zhipu, Huimin’s Founder and Chairman, added: “We are really happy to have agRIF and IFU onboard. To us they are strategic partners who come with not only capital, but also a real understanding of the Huimin model and a plan to help Huimin adopt international microfinance best practices.”
Watch here the video about the work and mission of Huimin:
About Incofin IM
Incofin IM is an emerging markets focused independent impact investment manager focused on financial inclusion, the agri-food value chain and safe water. Driven by a desire to promote inclusive progress, Incofin strives to provide the support entrepreneurs’ need in order to improve to lives of the less privileged people. Incofin IM is an AIFM licensed fund manager, advising and managing more than EUR 1 billion of assets. Incofin has a team of more than 60 professionals spread over the headquarters in Belgium and 4 regional offices in Colombia, India, Kenya and Cambodia.
agRIF is a third generation (closed-end) fund that uses private equity structures to support investment for financial inclusion in the rural sector. agRIF specifically targets the agricultural sector and smallholder farmers as well as rural micro-entrepreneurs. In addition to the equity investments targeted by the fund, agRIF provides debt capital to agricultural SMEs and agriculture-focused financial intermediaries.