December 28, 2021

2021 Year in Review

From our vantage point as both stewards of capital and an important source of financing for responsible Micro & SME Finance Institutions and their customers, 2021 was a year of persistence in the face of ongoing challenges and one where we marked a new chapter in MicroVest’s history. As COVID-19 variants worked their way through the Greek alphabet, both our team and portfolio companies doubled down on the lessons of patience, perseverance, and innovation that they relied upon to adjust to the initial shocks of the pandemic.

Even with a challenging global landscape that persisted despite the arrival of vaccines and new therapies, we continue to move forward with our goal of mobilizing private capital to promote financial inclusion, local economic development, poverty reduction, and achievement of the UN’s Sustainable Development Goals. In service of this mission, as the year drew to a close, MicroVest joined forces with DAI, which will allow us to accelerate our impact on Micro & SME Finance Institutions and their borrowers by drawing on DAI’s wealth of development expertise and presence in over 150 countries.

We would like to start off by giving thanks to our investors, without whom, our work would not be possible. Your investments enable us to help even more underserved communities gain access to basic financial services, finance their small business dreams, and lead dignified lives. The impact that we strive to achieve is only possible because of the confidence you have placed in our mission and our team. We at MicroVest are forever grateful for your ongoing support.

During 2021, our portfolio companies continue to inspire us, and I would like to share a few stories of their success and remarkable ability to adapt their operations and underwriting. First and foremost, our portfolio of Micro & SME Finance Institutions are keeping credit flowing in their respective economies even as short-term demand ebbs and flows with surges in COVID-19 cases and various measures to combat the virus. By growing their portfolios, they are helping many underserved microentrepreneurs and small businesses keep their dreams of building businesses and uplifting communities alive. Beyond this work, our portfolio companies and their borrowers are actively playing a role in contributing to curbing the spread of the virus in their respective nations. For example, in South Africa, one portfolio company SA Taxi provides financing to underserved entrepreneurs who want to own and operate their own minibus taxis, a sector that was hard-hit by the pandemic. SA Taxi went above and beyond its mission as a financial institution by setting up a center to distribute COVID-19 vaccines to its minibus taxi participants. The company has been administering an average of 200 vaccines per day. In another example from Cambodia, Mrs. Oeurn Samon, a borrower from one of our portfolio companies Amret, runs a longan trading business. She shared the story of how her business managed to mitigate the effects of COVID-19 with effective strategies and practices.

If there is a small silver lining in the past two years, it has been the transition that our Micro & SME Finance Institutions have made towards digital acceleration. The world was already moving in this direction with the rise of fintech but the pandemic forced many of our portfolio companies to evolve much faster. These adaptations will accrue to the benefit of end borrowers, as these Micro & SME Finance Institutions can now meet them where they are and improve the overall customer experience.

Looking internally, MicroVest hit a number of milestones in 2021. We successfully secured debt financing from the U.S. International Development Finance Corporation (DFC), which committed to double the size of its financing to our flagship levered fund from $48 million to $96 million. We’re proud that this commitment also qualified for DFC’s 2X Women’s Initiative because of MicroVest’s focus on providing financial services that benefit women, as well as the firm’s percentage of women in leadership positions. This year, we were also proud to be recognized as an Emeritus Impact Manager on the ImpactAssets50 listing alongside a diverse group of fund managers who demonstrate a commitment to generating positive social, environmental and financial impact. This is MicroVest’s 10th consecutive year on this list, and we are proud that it reflects our consistent approach to being a mission-driven asset manager.

Most importantly, this year, we joined the DAI family to help expand on our mission to shape a more livable world through purposeful investing. As we continue to work toward supporting our Micro & SME Finance Institutions in meeting the evolving challenges confronting their communities, our partnership with DAI represents an infusion of new, added value to MicroVest’s investors, portfolio companies, and stakeholders. As the impact investing industry has matured significantly in the past two decades, partnering with DAI will deepen MicroVest’s impact while enabling the company to explore new ways to fulfill our core mission of expanding financial access to underserved borrowers in emerging markets.

In closing, this letter finds you at a time when the world must keep fighting COVID-19 while ensuring minimal damage to the economy and overall society. In 2021, our team, our portfolio companies and their end borrowers met ongoing challenges with persistence and resilience. We look forward to redoubling our efforts in 2022 to continue to support financial inclusion for the unbanked as part of the DAI ecosystem.

Gil Crawford
MicroVest Capital Management

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