Minimizing currency risk is necessary to freeing up outside capital in emerging and under-developed markets.
MFX Solutions offers currency swaps and forward contracts to enable lenders to fix currency exchange rates over the life of their investments and secure borrowers against depreciation of their local currency.
The Overseas Private Investment Corp., the U.S. development finance agency, is investing $120 million on top of its earlier $48 million commitment to MFX, which covers investors in clean energy, microfinance, agriculture and affordable housing.
The new funding will allow MFX, which also is backed by the Dutch development bank FMO, to grow its portfolio from $600 million to $2 billion.
MFX says it has helped more than one million entrepreneurs secure loans in 45 different currencies.
(OPIC, by the way, is on the budget chopping block. As Bloomberg asks, “Why Cut an Agency That Makes Money?”)
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