Dealflow | July 22, 2019

ResponsAbility issues $175 million in notes for small business and microfinance lending

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, July 22 – Swiss impact investor ResponsAbility raised $175 million from OPIC, the U.S. development finance institution, Swedish pension plan manager Alecta and Calvert Impact Capital to support small business and microfinance lending.

The capital, raised through a bond issuance, was lent to 26 financial institutions providing loans to 30,000 small businesses and 5.6 million microfinance borrowers. The institutions, from India to the Netherlands to Ecuador, lend mostly to women.

The three tranches of notes carry different risk profiles: the fixed-rate senior and mezzanine notes have a three-year maturity, while returns on the junior notes will be based on portfolio performance. ResponsAbility said the structure signaled maturity for small business and microfinance investing in emerging markets.

“Applying capital markets technology to traditional impact investing creates the potential to open this sector to a wider range of investors,” said Eric Wragge of J.P. Morgan, which supported the transaction.