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Financial Inclusion

GLS AI – Microfinance Fund

Since 2015, FS Impact Finance has been managing the GLS Alternative Investments – Microfinance Fund (EUR 230 million as of 30/04/2024). The main objective of the fund is to improve financial access for people and small entrepreneurs in emerging markets through microfinance institutions, so financial inclusion is at the heart of the fund’s mission.

FS Impact Finance provides the entire range of fund management services, from investment-, risk-, portfolio-, and transaction management to FX/hedging, compliance, and anti-money laundering.

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Luxflag Microfinance And ECOreporter Label

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Problem

To date, 1.4 billion people worldwide are still excluded from the formal financial sector. Because they lack access to basic financial services like bank accounts or loans, their options for economic development remain very limited. The lack of financial access is not only a pure financial issue but of course has implications for communities and/or societies.

Solution

Microfinance institutions make small loans and other financial services accessible to people and small microenterprises. The GLS AI – Microfinance Fund primarily invests in these institutions that – besides offering basic financial products – aim to make a strong social impact.

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Impact

The fund contributes considerably to financial inclusion in emerging markets. Its comparatively large portfolio share in Africa, along with its strategy to target predominantly medium-sized and smaller microfinance institutions, makes it stand out. The median loan size to final borrowers of less than 2.000 € per client clearly demonstrates that the fund is not targeting small to medium-sized corporations but aims for the unbanked clientele. Since its inception, the fund has disbursed 319 loans amounting to a total of over 490 million EUR (as of 01.07.2024).

From an investor’s perspective, the fund excels through its transparency, e.g., by fully disclosing the calculation of its number of end borrowers and their respective loan sizes.

The GLS AI – Microfinance Fund is classified as Article 9 under SFDR and meets GLS Bank’s high environmental and social standards. It adheres to positive criteria like the strengthening of end borrowers’ financial resilience and financial access for women, as well as strict exclusion criteria (consideration of IFC exclusion list; exclusion of MFIs who don’t commit to client protection / comply with internationally recognized Human Rights Standards, or who operate in locally oversaturated markets).

Contributing to a number of social impact objectives, the fund has repeatedly been awarded the LuxFlag label and was recognized with the “ECOreporter Sustainability Label” 2023 and 2024.

end borrowers in 36 countries

% female borrowers

% rural borrowers

Europe
Asia
Africa
Latin America
Cash / other positions

Where we are invested

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Geographical distribution

Monthly Reports

07/2024: Vier neue Kredite vergeben

Im Juli wurden vier neue Kredite in der Höhe von…

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Kapitalmarkt-Rückblick Q2 2024 für den GLS AI Mikrofinanzfonds

Im abgelaufenen zweiten Quartal 2024 war die erwartete und im…

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06/2024: Drei neue Kredite in Südosteuropa vergeben

Im Juni wurden drei neue Kredite in der Höhe von…

05/2024: Kredite über 4,75 Millionen Euro vergeben

Im Mai wurden drei neue Kredite in der Höhe von…

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Impact Stories & Blogs

How a microloan helped this woman kick off her weaving business

Annapurna Finance Pvt. Ltd. is a microfinance institution from India that has been a partner of the GLS AI – Microfinance Fund since 2018.

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The GLS AI – Microfinance Fund has been awarded the LuxFLAG Microfinance Label

Once again, the GLS AI – Microfinance Fund has been granted the LuxFLAG Microfinance Label for another year.

Principal Adverse Impact Statement

FS Impact Finance considers and discloses principal adverse impacts (PAI) of its investment decisions on sustainability factors and hereby publishes its first PAI statement.

Capitalization and Financial Inclusion: Disruptions of Covid 19 to digital opportunities in Latin America

With the arrival of COVID in Latin America, the microfinance sector found it necessary to invest in digitizing at least part of its processes.

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08/2022: Erster Kredit in die Demokratische Republik Kongo vergeben

Kommentar des Fondsmanagements Der GLS AI – Mikrofinanzfonds hat im August 4 Kredite über rund 6,75 Mio. EUR neu ausgereicht. Hervorzuheben ist dabei unser erster Direktkredit an Baobab in der Demokratischen Republik Kongo über 1,5 Mio. US-Dollar. Die Wertentwicklung der…

07/2022: 3 Kredite an Partnerinstitute vergeben

Im Juli wurden Kredite in Höhe von rund 2,6 Mio. EUR an drei langjährige Partnerinstitute ausgereicht. Zwei andere Kunden haben ihre Kredite vollumfänglich zurückgezahlt und das Portfolio des Fonds bis auf Weiteresverlassen. Die negative Anteilspreisentwicklung war vor allem durch die…

Ralf Burmeister at FS Impact Finance office

Ralf Burmeister im Interview mit finanzen.net

Wie funktioniert ein Kreditfonds? Welche geopolitischen und wirtschaftlichen Faktoren beeinflussen derzeit die Märkte? Und wie sehen die Auswirkungen – etwa des Kriegs in der Ukraine – auf den GLS AI – Mikrofinanzfonds aus? Antworten auf diese und weitere brandaktuelle Fragen…

Man standing in a yellow field of flowers and holding a bunch of them

FS Impact Finance joins the Client Protection Pathway

We proudly announce that we have joined the CERISE + SPTF Client Protection Pathway (“CP Pathway”)! This new initiative was created to support client protection implementation in the financial services industry. It recognizes financial service providers who are committed to client protection.…

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2020 TA programme: Pesticides management trainings in Ecuador and Nicaragua

Since 2018 FS Impact Finance – in partnership with the GLS Microfinance Fund – has been sponsoring different kind of technical assistance (TA) programmes for our partner MFIs, their staff or their clients. The most established programme is our sponsorship…

FS Impact Finance Signatory Organizations

Signatory organizations report on Covid-19 Pledge implementation and lessons learned

Over the past months, the financial inclusion sector has embarked on a journey to face the Covid-19 crisis. On the field, Financial Service Providers have taken measures to face the health risks, lock downs and the economic recession1. They have…

Virtual due diligence – Changes during Covid-19 times

Covid-19 is impacting our lives in almost every way, privately and professionally. And it will continue to do so for quite some time, even if a proper vaccine is developed in the months to come. This blog aims to give…

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Some thoughts on fixed income investing in Emerging markets versus developed markets

Part II: Spotlight on investing in loans versus buying bonds As usual, one can complain about a lot of things in capital markets – at any time. But one of the few things surely no one can complain about was…

Agriculture Finance in Africa: what is missing?

In a first post, the author looked at the importance of the sustainable development of small and medium enterprises (SMEs) as a cornerstone to economic development: they create the most jobs (in volume), generate the most value-added and, though not…

An international coalition to protect microfinance institutions and their clients in the COVID-19 crisis

At the initiative of Grameen Crédit Agricole Foundation, a group of microfinance lenders and key players in inclusive finance worked on a set of principles to better support the microfinance sector in the health and economic crisis caused by the Covid-19. Grameen Crédit Agricole Foundation, ADA, Alterfin, Cerise, CIDR Pamig

Peer Group Comparison GLS Microfinance Fund

Some thoughts on fixed income investing in emerging markets versus developed markets – Introduction

There seem to be rather good crash barriers on each side of the investment path for fixed income investors in developed markets as there are two very basic idioms: “Don’t fight the central bank” and “bad news is good news”.…

Local currency hedging

The need for local currency Actors of the real economy usually require their local currency for doing business. This basically applies to most countries and all different kind of sectors, but especially to households and micro entrepreneurs in developing countries.…

“Modern Microfinance”: addressing the missing middle conundrum in West Africa

The role of finance in development Appropriate financing for small and medium sized enterprises (SMEs) at national scales provides the “blood stream” that irrigates large corporations with raw materials and clients. In turn, demand and supply from corporations creates the…