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IMPACT INVESTING ALONG THE SILK ROAD

Since its foundation in 2008 (11 years track record), Mikro Kapital focused on impact investment and social responsibility, with a particular attention on emerging countries and a leading experience in microcredit.

Our mission is to judiciously target economic growth in the countries where we operate, by ensuring financial flows to niche markets considered safe and profitable.


BACK TO THE REAL SMALL BUSINESS, TO SUPPORT GREAT IDEAS

We combine competitive financial returns and high positive impact.

We believe that there is a real need in many developing markets to improve their living standards and close their gap with the developed world.

Our objective is to position ourselves close to SMEs that are creditworthy, with high growth potential and considerable social impact, since they form the basis of the socio-economic development chain.

Micro-credit to small entrepreneurs represents the real tool for helping people to realize their dreams and improve their own welfare.

Mikro Kapital operates through two investment funds: Mikro Fund and Alternative Fund, investing in small businesses across emerging areas in Russia and along the Silk Road.

Both funds invest in their own network of regional branches named “Mikro Kapital”, such as local small financial institutions, leasing companies, banks or credit cooperatives. Mikro and Alternative Fund collect financial resources from Institutional and Private Investors through EMTNs (European Medium Term Note) with a short and medium maturity.

Impact investing and especially investments in microfinance support inclusive growth and development by providing micro entrepreneurs with capital and other services to support profitable activities.

Financial inclusion promotes entrepreneurship and job creation, and gives individuals instruments to improve their life on a all levels – financial security, health, education, etc.

The potential entrepreneurs, many of whom are the most socially and economically vulnerable, benefit of such services and are helped to break cycles of poverty and oppression, empowering individuals, families and communities: at Mikro Kapital we aim to create jobs, creating opportunities for women entrepreneurs and alleviating both poverty and its causes.


MIKRO KAPITAL GROUP AT A GLANCE

Mikro Kapital Management SA is a Lux registered company, supervised by the Luxembourg central bank.

All the subsidiaries of Mikro Kapital Management SA – the so-called MFIs (Micro Finance Institutions), are regulated by the Central Banks of the respective countries.


A SNAPSHOT OF OUR BUSINESS MODEL

We aim to provide a consistent income in hard currencies to our bondholders by investing the proceeds of our EMTN bonds into Micro Finance activities we carry in selected EM countries. We invest via two Securitization Funds that differ only for geographic exposure: Mikro Fund has exposure to Russia, Belarus and the Countries along the Silk Road, while Alternative has exposure to the Countries along the Silk Road (no Russia exposure).

Microfinance as Asset Class has historically low to zero correlation to traditional asset classes.

All final loans are pooled within the same SPV (securitization fund). Hence, all bondholders are treated pari passu in case of shortfall.

Bondholders are senior to equity holders, hence currently benefit from an equity buffer of 20% (min equity buffer is 10% as per management regulation).

Our MFIs do deploy credit to end-borrowers. All the activities of the Subsidiaries are audited and consolidated under the Luxembourg legal entity Main partners of Mikro Kapital Group: EBRD (European Bank for Reconstruction and Development), EIF (European Investment Fund), MEF (Microfinance Enhancement Facility).

As a risk management rule, only 90% of the portfolio is invested and 10% is kept in cash in order to provide another credit enhancement to the investors.

All underlying loans, disboursed in local currency, are fully collateralized (client must provide a collateral evaluated at least 130% of the loan) and secured by tangible goods (such as machinery and real estate).

The Funds fully hedge the fx risk.

The portfolio diversification is achieved by the number of different underlying clients: more than 30000 underlying loans (end borrowers). The Risk Management is well performed and historical cumulated Non-Performing Loan (NPL) less than 1%.

For further information please visit www.mikrokapital.com

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