Five good reasons to invest in microfinance

Fem gode grunner til å investere i mikrofinans

– “It’s stories like this that make clear why we invest in microfinance. This is a typical example of how a small helping hand can make a world of difference to people in poor countries”, comments Johan H. Andresen, owner of Ferd and chair of its Board of Directors, in relation to how microlending allowed five Indian women to start a new life.

In 2012, the five women went together to see about borrowing money to buy some piglets. The lender was RGVN Microfinance Ltd., an Indian microfinance firm in which the Norwegian Microfinance Initiative (NMI) had recently invested. In addition to financing, RGVN provided the women with advice and access to veterinary services.

Six months later, the new farmers could take their pigs to market. As they had kept their costs low and consequently made a good profit, they were able, after paying back the loan and covering other expenses, to expand their operations by reinvesting some of their profits alongside another small loan.

These five entrepreneurial women have now borrowed money for a third time, with each of them this time receiving the equivalent of approximately NOK 1,600 from RGVN. This has allowed them to expand their breeding program to several different types of animal and to open their own shop. They have created their own jobs, and now have an income which has given them and their families a new life.

The purpose of NMI is to enable the poor in developing countries to work and to improve their living standards in a way that is sustainable, and for this to bring benefits both in the form of development and a financial return. The organisation was set up in 2008 at the instigation of Johan H. Andresen. Half of its NOK 782 million in partnership capital comes from the state via the Norwegian Investment Fund for Developing Countries (Norfund), and half from private investors, specifically Ferd, DNB Livforsikring, KLP and Storebrand.

Learn more about microfinance on NMI’s website her.

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