The equity portfolio increased by 42.0%, from EUR 41.2 million in 2014 to EUR 58.5 million in 2015, representing 19.2% of the total assets of the fund on December 31, 2015 (per year-end 2014: 17.9%). The equity portfolio performed reasonably well in 2015. Strong currency devaluations in Eastern European and Central Asian countries affected the performance of the fund, especially through the equity holdings in Kazakhstan, Kyrgyzstan and Tajikistan. Because of the devaluation of the manat and measures announced by the Azerbaijani central bank during the year, the fund marked down two microfinance holding companies that have a substantial exposure in Azerbaijan (FINCA Microfinance Holding and Access Microfinance Holding). The fund added three new equity investments to its portfolio in 2015.

New equity investments

Dawn Microfinance (Myanmar) In order to provide a catalyst for the development of the microfinance sector in Myanmar based on sustainable principles, Triodos Microfinance Fund (together with Triodos Fair Share Fund and Triodos Sustainable Finance Foundation), FMO and Accion joined forces with the aim of helping Dawn Microfinance develop into a leading, for-profit MFI. Triodos Microfinance Fund and its co-investors own 100% of Dawn Microfinance. Triodos Microfinance Fund holds a stake of 7.5%. Although Dawn Microfinance currently only provides group loans and is still in the start-up phase, the long-term objective is to offer a wider range of financial products in addition to group loans, such as individual loans, SME loans and savings products. Going forward, the key focus will be on expanding the product portfolio and prioritising client education and protection. A senior representative of Triodos Investment Management has a seat on the board of directors.

Kompanion (Kyrgyzstan) is an MFI founded to support local communities in Kyrgyzstan in their development. The company offers financial products and services to entrepreneurs and individuals across the country. Triodos Microfinance Fund holds an 8.75% equity stake. With 157 offices and mini-offices operating in all regions of Kyrgyzstan, Kompanion is currently the largest MFI in Kyrgyzstan. Its main products are solidarity group loans and secured small business loans. Among the top five performers in terms of social performance management, Kompanion serves as an example in the fund’s portfolio. The institution has a strong rural focus, as more than 50% of its loan portfolio consists of loans to the agricultural sector, and combines its credit services with expert advice from agronomists and other industry professionals.

The equity investment was used to transform Kompanion into a fully-licensed microfinance bank, allowing the institution to expand the financial services that it provides to its clients, primarily those that have no access to formal banking services. A senior representative of Triodos Investment Management has a seat on the board of directors.

BancoSol (Bolivia) is one of the largest Bolivian MFIs. It began its operations as an NGO in 1986 and in 1992 became the first Bolivian commercial bank to focus on microfinance. Triodos Microfinance Fund holds a 6.0% equity stake. Through the years, the bank has staged a strong performance in the market and has been able to gain a solid reputation through its sound financial performance and outstanding responsible banking practices. The bank offers integrated financial services that comprise loan products, savings products, payment services and remittances through its 99 branches, 95 points of sales and three mobile branches in nine cities in Bolivia, serving more than 250,000 loan clients and more than 730,000 savings clients.

A quantitative description of the MFIs in the portfolio can be found under Portfolio. A short description of all MFIs can also be found under the header ‘Know where your money goes’ on www.triodos.com.

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