PROGRAMS / Financing

Microfinance institutions may need to look for outside sources of funding. For example, a microfinance program in Yunnan Province may look for donor funds or loans from banks. Special Microfinance Investment Funds (MFIFs) now increasingly look for profitable investments in the microfinance sector.


All PlaNet Finance Financing for microfinance institutions is run out of the headquarters in Paris.

The objectives of the financing activities of PlaNet Finance are:
to participate in the growth of MFIs' clients and loan portfolio,
to support the institutions' move from a logic of subsidies related to the starting up of activities to a logic of financial autonomy,
to encourage institutions to seek other financial backers or investors to reach financial sustainability.
In order to support the development of MFIs, PlaNet Finance has developed three financing products adapted to the needs of MFIs according to their maturity.

PlaNet MicroFund (previously known as the Rotating Credit Fund, or RCF)
PlaNet MicroFund encourages and supports the development of the most promising YOUNG microfinance institutions (MFIs). These young MFIs have seldom access to commercial financing. PlaNet MicroFund helps them build their own credit history and develop relationships with financial backers, banks and other investment funds to obtain commercial financial resources and thus to diversify their financing sources.

PlaNet BNP Paribas Fund (Responsability Fund)
PlaNet Finance in partnership with BNP makes recommendations to the Responsability Fund. This fund targets more developed institutions.

PlaNet Finance Debt Funds
PlaNet Finance runs two funds whose rules and criteria are the following :

  PlaNet MicroFund PlaNet BNP Paribas Fund
Targets very young and very small MFIs mature and large MFIs
Support Provided
  • Start-up loans with an average amount of €15,000
  • Enable the MFI’s financial autonomy
  • Give access to external commercial resources
  • Increase the MFI’s loans outstanding with average loans of €300,000
  • Increase the number of clients
Credit Risk Objectives As the target is particularly risky, PlaNet MicroFund aims to achieve a portfolio at risk at 30 days < 5%. The Fund aims to achieve a portfolio at risk at 30 days < 2%.
Loan products provided by the Fund
  • €5,000 < loan amount < €40,000 (or USD equivalent)
  • Rates ranging from 5% to 10% in EUR and from 6% to12% in USD
  • Term: 1 year with the possibility for renewal
  • €50,000 < loan amount < 20% of the MFI’s loan outstanding
  • Commercial rates or close to commercial rates (from 6% to12%)
  • Term: 12 to 60 months with possible renewal
    Loans can be granted in USD or in local currencies
MFIs’ selection criteria
  • €20,000 < MFI’s loans outstanding < €200,000
  • MFI’s average loan amount < 100% GNB/Inhabitant.
  • Duration of the microfinance activity > or = 12 months.
  • Country of the MFI rated A, B or C (COFACE rating).
  • MFI’s activities must be in accordance with PlaNet Finance’s Ethical Charter
  • Audited financial statements
  • Before getting a third funding, a rating made by a rating agency is required
  • MFI’s loan outstanding > €200,000
  • MFI’s average loan amount < 100% GNB/Inhabitant.
  • Duration of the microfinance activity > or = 36 months.
  • Country of the MFI rated A, B or C (COFACE rating).
  • MFI’s activities must be in accordance with PlaNet Finance’s Ethical Charter
  • Audited financial statements
  • Rating made by a rating agency
  • Computerized client follow-uo procedures
Risk management
  • Systematically have local intermediaries in the field
  • The MFI should send a bimonthly report on the use of funds
  • The MFI sends a report on the use of funds
  • Visit the MFI’s premises or a rating update is made when a loan is renewed

PlaNet Finance will consider making either MicroFund or MicroCred loans in China in the next year. However, for the time being, there are no concrete financing projects in the pipeline. To see our feasibility study of the potential for MicroFund laons in China please download the following document.