- Active: Active
- Region: Latin America
- Country: Regional
- Sector: Microfinance
- Year: 2013
- Domicile: Delaware
- Instrument: Fund
- Commitment (MNOK) as of 31.12.2018: 53.8
- Original Commitment (MNOK): 53.8
LOCFUND II is a micro-financing fund that offers loans in local currency to micro-financing institutions in several countries in Latin America. Following the success of LOCFUND established in 2007, LOCFUND II was set up in 2013. Norfund, FMO, BIO and MIF (Interamerican Development Bank) are the anchor investors in both the first and the second fund.
Since inception, Locfund has disbursed 137 million USD to 49 Microfinance Institutions in Latin America. In total, these Microfinance Institutions (MFIs) benefit 1.4 million clients of which 62% are famels and 49% live in rural areas.
The innovation in this second fund is that it will be double the size of the first fund with USDM 60, of which half of it will be debt. Therefore, Norfund's equity will mobilize debt on a ratio of 1:1. The fund will still continue to focus at Tier 2, 3 MFIs (Small and Medium MFIs).
Locfund loans are in local currency which benefits the MFIs from devaluation. Although local currency loans are becoming more common within the larger institutions, they are still almost non-existent within the smaller MFIs which are LOCFUND IIs target. Finally, it will also help some of the MFI’s which have grown quickest to access the local bond markets.