Funder

ICCO's mission is to work towards a world where poverty and injustice are no longer present. ICCO's work consists in financing activities which stimulate and enable people, in their own way, to organize dignified housing and living conditions. ICCO decided for a two-track credit policy. The FIRST TRACK is a quality control program of ICCO's support to savings and credit programs in the South. This support is mainly grant-based and includes a variety of credit schemes, ranging from the typical revolving funds in multi-sectoral development programs to specialized microfinance institutions with a banking license. The quality control program includes the development of specific tools for appraisal and monitoring of S&C activities, the installment of internal advisory capacity (business economists) to the service of ICCO's country desks, and the design of MIS elements that enable ICCO to steer and monitor the results of the quality program. The SECOND TRACK is the development of a Loan & Guarantee facility, which enables ICCO to support emerging economic organizations that desire to consolidate their pro-poor operations on a sustainable basis. Such emerging institutions may require grants for certain start-up investments and technical assistance, but must rely increasingly on market funding for a further growth of their operations. ICCO sees its role in the provision of risk-bearing capital for such organizations, either through guarantees or subordinated capital, or eventually through equity investments. Through the Loan & Guarantee facility, ICCO wishes to contribute to the further development of these initiatives, as autonomous organisations that cover their costs, have access to market funding and play an enduring role to the benefit of their target groups. The general financial targets for the Loan & Guarantee Fund are:
1- Volume and scale if the Fund: Policy-wise, the Fund does not wish to demonstrate its legitimacy through its volume and growth. The policy is to operate under the "small-but-smart" concept, by leveraging resources in alliance with existing loan facilities (Oikocredit and others). ICCO expects its Loan & Guarantee Fund to grow gradually and organically, towards an expected portfolio of 50 projects with EUR 10 mill outstanding (2006). The Fund will increasingly be able to finance new investments with amortizations. Depending on further alliances, the volume might turn out to be twice or three times as high. But it is clear that the niche chosen by ICCO, of risk-bearing capital with a leverage to existing lending facilities, will and should not make the Fund grow to proportions comparable to the bigger facilities.
2- Financial sustainability of the Fund: the Fund expects to increasingly cover its direct operational costs out of its portfolio income. The fund accepts a relatively high risk profile, if projects generate a high developmental relevance.
- Loans (long-term investments, trade finance)
- Guarantees
- Equity participations Hide