BlueOrchard Finance in partnership with Schroders, CDC, DFC, and JICA has launched the BlueOrchard Covid-19 Emerging and Frontier Markets MSME Support Fund with a target size of $350m. 

Philipp Müller, BlueOrchard’s CEO, said: “Unprecedented times require decisive action and innovators who go ahead. We are very thankful and proud that we successfully brought together a renowned group  of public and private actors at record speed to support those most in need.”

“For 20 years, we remain true to our mission to reduce poverty and inequality globally. The impact of the pandemic has made our  conviction even stronger.” 

The Fund is backed by public and private investors who will jointly support its launch with around $140m.

Nick O’Donohoe, CEO, CDC Group, said: “We are pleased to have played a key anchor role in the Fund, enabling it to reach this timely launch. The Fund will deploy capital at scale to make a  marked difference for millions of small entrepreneurs and support many more livelihoods in markets that  have been heavily impacted by the pandemic. In these current times, it is vital that financial support is  made available to help preserve, strengthen and assist MSMEs to rebuild, in order to contribute to the  long-term growth and economic stability in emerging markets.” 

KfW, on behalf of the German Federal Ministry of Economic Cooperation and Development (BMZ), is currently in due diligence stage and intends to join the circle of investors. 

Maria Teresa Zappia, BlueOrchard’s Chief Impact and Blended Finance Officer & Deputy CEO, said: “We  thank our partners for their resolve and support for a key facility which will allow mitigating some of the  challenges of the pandemic and we are proud of this remarkable collaborative effort of our teams across  the globe.” 

The Fund will provide support funding to financial institutions and is expected to finance 20 institutions, serve three million micro-entrepreneurs and maintain 60 million jobs per each $100m.

The Fund will be further equipped with a dedicated Technical Assistance Facility supported by SECO (Swiss State Secretariat for Economic Affairs) to fast track the recovery of MSMEs even in the most  vulnerable sectors and geographies.  

“We are pleased to collaborate with BlueOrchard and other partners to address this challenge for  frontier and emerging markets,” said DFC CEO Adam Boehler.

“By providing capital to institutions that  serve micro, small and medium-sized business, we help stabilize industries, safeguard jobs, and speed  recovery.” 

Kitaoka Shinichi, JICA President, said: “One of our missions is to achieve Human Security. Its core is to  ensure everyone the right to live in dignity. In pursuit of our mission, JICA is working to build more  resilient societies that enable the protection of people’s lives under the Covid-19 pandemic.”

“As part of our  efforts, JICA has joined the BlueOrchard Covid-19 Fund. In partnership with BlueOrchard, we have  supported about 120,000 MSMEs mostly owned by women entrepreneurs in Asia through the Japan  ASEAN Women Empowerment Fund since 2016. I believe that the financial opportunities offered by this  fund to MSMEs in low- and middle-income countries will enable their fast recovery from the Covid-19  crisis and future growth.”

Liliana de Sá Kirchknopf, Head of Private Sector Development, SECO, added: “The Covid-19 Support Fund is  an initiative aiming to provide much needed liquidity to financial institutions serving MSMEs in emerging  markets. SECO supports the initiative via a dedicated Technical Assistance Facility that will assess the  impact of liquidity financing at financial institution and MSME level during the stabilization and recovery  phase. This will generate valuable market data that will be shared as public good to ensure lessons  learned on MSMEs’ needs at time of crisis can improve the response and fulfilment of financing needs in future market turbulences.”