An innovative partnership
It is difficult to understand LMDF without due consideration of its initiator, promoter, shareholder and investment adviser Appui au developpement autonome a.s.b.l. – ADA.
ADA is the leading Luxembourg non-governmental organisation active in micro- and inclusive finance. ADA’s LUXMINT financing program started in 2000 and served as a test case to illustrate the potential for debt, guarantee and equity investments in microfinance institutions. LUXMINT financed 19 MFIs in Asia, Africa and Latin America and part of the investment portfolio was contributed in kind to LMDF on incorporation at the end of 2009.
ADA has a team solely dedicated to LMDF, but it is also more than just an investment adviser. ADA is active in the development of MFIs through innovation, capacity building and peer to peer learning, as well as sector level interventions that address regulatory or legal frameworks. It also has specific expertise in Western Africa. ADA’s work as an investment adviser benefits from synergies through the information and networks the other activities create.
Although unusual at first glance, the partnership between a regulated investment fund structure and an NGOs makes sense if one considers the complementarity of competences required to balance the expectations of shareholders with the objective to expand the boundaries of financial services for the benefit of marginalised communities and individuals.