Katharina Cavano l Palladium - Feb 05 2021
Bamboo Capital Partners Successfully Exits CONFIE with Triple-Digit Growth

Credit: Lesly Derksen

Bamboo Capital Partners announced this week its successful exit from CONFIE, a Latin American microfinance investment holding company. CONFIE supports the development of the microfinance industry through investment, financing, and technology to promote equitable and inclusive development in Latin America.

Bamboo invested in CONFIE as part of its first Financial Inclusion Fund in 2007 and CONFIE’s main investment is in Banco FIE, one of the first microfinance banks in Bolivia. Bamboo, together with the NGO Center for the Promotion of Economic Initiatives (FIE NGO), through CONFIE’s participation, were the majority owners of Banco FIE and have seen the bank grow exponentially in the years since the initial investment.

The number of active borrowers of the institution increased from 86,000 to over 200,000 at the time of exit, and the number of depositors increased from 282,000 to over 1,041,400. In local currency, the institution’s loan portfolio multiplied by 11 times and its savings portfolio grew by 16 times.

In exiting, Bamboo sold their stake to FIE NGO, which has been working in Bolivia for 36 years.

Jean-Philippe de Schrevel, Founder and Managing Partner of Bamboo notes that it was the best exit option for such investment. “I am proud that we are selling our stake to FIE NGO, a true historical pioneer in Bolivian and Latin American Microfinance,” he says. “We have played a crucial role in scaling Banco FIE and CONFIE’s other subsidiaries to provide growth opportunities to hundreds of thousands of Latin American micro-entrepreneurs through access to financial services, and we look forward to following CONFIE’s and FIE NGO’s future progress as they take the next steps on their social mission.”

This is the latest in a series of successful exits by Bamboo in the microfinance sector, following the exits from Svasti Microfinance in early 2020 and Accion Bank in late 2019. To date, Bamboo’s investments in microfinance and fintech companies have provided 87 million people worldwide with access to financial services.

De Schrevel adds that the exit from CONFIE came at an extraordinary time.

“This is a successful and responsible exit, and one which extends our solid track record in the microfinance sector,” he explains. “The backdrop of this exit – with COVID-19 and the political transition in Bolivia – has been unlike anything we have experienced, and I am therefore incredibly proud of the team at Bamboo for completing this transaction during such unprecedented times.”

Supporting the Informal Economy

According to the International Monetary Fund, Bolivia has the largest informal economy in the world. These informal businesses – mom and pop shops, street market vendors, or small businesses that operate out of homes – often don’t have access to finance because they cannot provide formal information or ‘books’ and may not necessarily have the ability to pay on a loan from a formal financial institution.

Most commercial banks are unwilling to work with low-income markets and in doing so, can alienate vulnerable populations in need of capital and financial services. As a result, many informal businesses or those living below the poverty line are very often ‘unbanked.’

Banco FIE saw the need for providing finance to the many informal businesses across Bolivia. With small scale investments – microloans – Banco FIE, along with the growing Bolivian microfinance sector, creates financial inclusion for these small businesses that are so crucial to the local economy.

The microfinance sector has continued to grow in Bolivia, thanks in part to the success of Banco FIE, which is now the second largest microfinance institution in the country. Because the economy relies on informal labour, access to microfinance in Bolivia has been crucial for its overall economic improvement in the past several decades.

According to Ximena Behoteguy, Executive Chairman in FIE NGO and Chairman of the Board of Directors in Banco FIE, the organisation will continue its mission of providing finance to those most vulnerable business owners in Bolivia.

“We thank Bamboo for their trust,” she says. “When we created CONFIE, we looked for a partner who would share a mission and vision similar to ours, and we found Bamboo Capital Partners the best travel companion in these twelve years of successful partnership, working together to promote access to financial services.”

Bamboo Capital Partners is the Asset Management arm of Palladium’s Impact Investing business. To learn more contact info@thepalladiumgroup.com.