Triple Jump launches EM-focused Financial Inclusion Resilience Fund
Triple Jump has announced the launch of the Triple Jump Financial Inclusion Resilience Fund (FIRF). The fund will focus on providing subordinated debt to financial intermediaries serving micro, small and medium-sized enterprises (MSMEs) and low-income borrowers in emerging markets. FIRF aims to serve as a catalyst to improve the solvency position of these financial intermediaries, allowing them to continue and increase their lending activity to MSMEs and low-income borrowers.
At first closing, FIRF reached $72 million, with a target final size of $120 million. The fund is currently building up its portfolio and targets to disburse $15 million during the first quarter of 2023.
Orsolya Farkas, equity manager at Triple Jump said, “The financial inclusion sector has a strong track record of resilience, and quickly moved to successfully manage the liquidity crisis triggered by Covid-19. However, in the aftermath of the pandemic, solvency challenges have emerged, delaying recovery and hindering the growth of lending to MSMEs. We saw an unmet capital need in the market, and FIRF has been created in order to deploy subordinated debt quickly and at scale to strengthen the capital buffers of financial institutions, allowing them to respond to the financing needs of their clients.”
FIRF is powered by the Dutch Good Growth Fund (DGGF). The DGGF supports FIRF as a cornerstone investor as FIRFs objectives strongly align with DGGF’s mandate in building back an inclusive financial sector and offering a Covid intervention with a systemic change angle. Furthermore, DGGF endorses the provision of subordinated debt as it offers a leverage effect and builds lender confidence.
For the first closing, DGGF’s investment was leveraged by the ASN Microkredietfonds that entered as a noteholder. The US International Development Finance Corporation (DFC) has committed to providing a $48 million senior loan to the fund.