Microfinance is usually defined as the provision of financial services and products to those excluded from conventional financial institutions.

The creation of microfinance investment vehicles (“MIVs”) is the perfect answer to raise capital from international investors and enable microfinance institutions to diversify their portfolio and depart from the dependency of local financing. Furthermore, MIVs are fashioned to channel a decent financial return to their participants and simultaneously allow investors to perform a social responsible investment.

Luxembourg is a leading financial centre of domicile for MIVs. As regards its legal, regulatory and fiscal framework coupled with a high competence of service providers, it offers wide-ranging opportunities to give MIVs a structure tailored to investors’ risk profile.

Luxembourg provides various adequate regulated investment vehicles and securitisation companies for microfinance investments.

• Regulated vehicles:
  • Undertakings for collective investment (“UCIs”),
  • Specialised investment funds (“SIFs”),
  • Investment company in risk capital (“SICAR”),
  • Securitisation vehicle.
• Non regulated vehicles:
  • SOPARFI (Société de participations financières).

The choice of the appropriate vehicle depends upon the profile and requirements of investors as well as on tax considerations.
Microfinance is usually defined as the provision of financial services and products to those excluded from conventional financial institutions