BlueOrchard’s Dexia Microcredit Fund flat in September

By Matthew Fuchs
Microfinance Focus, Oct. 16, 2009: Returns for BlueOrchard’s Dexia Microcredit Fund (DMCF) show a slight negative return in September registering a decline of 0.01 per cent.
The global microfinance fund manager, in its monthly newsletter, attributed this to trouble in three Nicaraguan MFIs though the fund’s overall performance elsewhere was positive in the month.

The microfinance sector in Nicaragua has been hit hard by the global economic recession, with a decline in portfolio quality and MFI profitability as a result of falling exports and remittances from Nicaraguans working abroad. In addition, a “no pay” movement has emerged in the country’s north.

Investments in Nicaragua represent 3 per cent of the DMCF’s Net Asset Value (NAV). BlueOrchard said it is closely monitoring the situation.

The remainder of the fund’s portfolio remained “largely stable”, with five new investments made in Peru, Paraguay, Albania, Kosovo and Georgia totaling $14.4 million. This brings Dexia’s total loan portfolio to $390 million and a total NAV of $531.5 million.
Otherwise, the fund performance remained positive despite the impact of economic crisis, with the annualised year-to-date return at 2.9% compared to 5.9% in the previous year. Returns on a five-year annualised basis also declined slightly to 5.19% from 5.79% in September 2008.

BlueOrchard is one of the world’s largest microfinance asset managers with over $800 million in assets under management and is based in Geneva, Switzerland. Dexia Microcredit Fund, launched in 1998, is a Luxembourg-based mutual fund that provides loans to MFIs.

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