1. Supporting the “finance” in microfinance October 9th, 2008 Thomas Seale CEO, European Fund Administration Vice Chairman, Association of the Luxembourg Fund Industry

2. Microfinance Investment Vehicles (MIVs) provide funding to microentrepreneurs via the financing of MFIs Interests Microcredits Low amount Short term Local currency Microfinance Institution Microbank Financing (mainly debt) MIV Micro-entrepreneurs Source: ADA Large amount Long term Hard currency Private investors Institutional investors Public/non-profit investors hedging InvestmentReturn 2

3. Microfinance overview 3,500 Microfinance Institutions (MFIs) worldwide - 48% Asia-Pacific - 17% Latin America + Caribbean 200-300 MFIs have access to commercial funding 91 Microfinance Investment Vehicles (Dec 07) 5.4 billion USD in microfinance funding Growth 71% since 2006. 3

4. MIVs have shown significant growth in numbers … Source: MicroRate, CGAP, ADA 4

5. … and in assets 1407 1898 712 1204 417 237% Growth in MF assets 911 USD mn Source: MicroRate 5

6. Yet overall microfinance market dynamics show enormous untapped growth potential Source: Microcredit Summit Campaign Report 2006 6

7. Luxembourg is strongly positioned in the “finance” of microfinance 5 of the top 10 MIVs are domiciled in Luxembourg Multiple fund structures (UCI Part II, SICAR, SIF) Special purpose vehicles Overall, 21 Luxembourg MIVs control assets exceeding $1.25 billion NameCountryTotal assets (million USD) 1.OikoCreditNetherlands201.3 2.European Fund for Southeast EuropeLuxembourg179.9 3.Dexia Micro-Credit FundLuxembourg107.0 4.Blue Orchard Loans for DevelopmentLuxembourg99.1 5.responsAbility Global Microfinance FundLuxembourg86.0 6.Blue Orchard Microfinance SecuritiesUSA81.3 7.Global Commercial Microfinance Consortium USA71.0 8.XXEB Microfinance SecuritiesLuxembourg60.0 9.Triodos-DoenNetherlands49.7 10.Gray Ghost Microfinance FundUSA44.9 Top 10 total980.2 Top ten MIV investments in microfinance (end 2006) Source: MicroRate, cf. Minocha, Radhika S., MicroRate “A Survey of Microfinance Investment Vehicles – 2007” presentation, 2007 7

8. Financing of microfinance is limited by uneven information flows Increasing demand for capital by MF institutions Growing number of MIVs Investor demand for socially responsible investments Need to assist investors in their choice Investor confusion Luxembourg response: LuxFLAG 8

9. Purpose of LuxFLAG LuxFLAG is an independent organisation that strives to provide confidence to micro-finance investors by awarding a distinctive label to eligible microfinance investment vehicles. The award of a LuxFLAG label does not constitute a recommendation to investors or a guarantee of investment performance. 9

10. LuxFLAG Microfinance Label The LuxFLAG Microfinance Label is granted to microfinance investment funds that meet certain criteria. The criteria are selected to ensure that the fund is predominantly invested in microfinance. 10

11. Labelled Funds since 2007 Dexia Micro-Credit Fund European Fund for Southeast Europe ResponsAbility Global Microfinance Fund Dual Return Fund-Vision Microfinance Responsibility SICAV (Lux) Rural Impulse Fund SA 11

12. Thank you. www.luxflag.org 12