MFX Solutions Secures $13M in Financing, Launches Operations
ACCION International has announced that MFX Solutions, a company established in October to help microfinance institutions (MFIs) and investors manage global currency risk, has launched operations after securing $13 million during its first round of financing.
The product of a three-year collaboration led by ACCION International, Global Partnerships, MicroRate, and the Calvert and Calmeadow foundations, MFX was created to help MFIs analyze, quantify, and reduce currency risk by addressing the disparity that the organizations face when they borrow in dollars or euros and lend in a different currency. MFX will provide microfinance lenders access to sophisticated hedging instruments and free, Web-based risk-management tools tailored to the microfinance industry. By offsetting lenders' risks and lowering their costs, MFX will help unlock hundreds of millions of dollars in local currency loans to underserved markets and ultimately help the industry move to a sustainable growth model.
Initial investors in MFX include the Omidyar Network, which committed $9.3 million; the Netherlands-based Triodos-Doen and Hivos-Triodos Fund, which invested $1.5 million; and ACCION International, which invested $1.25 million.
"Getting microfinance to scale isn't just about efficiency, it's about reducing vulnerability at the base of the pyramid," said Monica Brand, director of ACCION International's Frontier Investments Group. "ACCION feels strongly that helping to catalyze MFX will simultaneously spur healthy industry growth and lessen the burdens faced by the poor."
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