Luxembourg offers a wide variety of attractive fund structures for Microfinance Investment Vehicles (MIV) ranging from Undertaking for Collective Investment (UCI) Part II funds (under the 2002 Law) to more flexible structures such as the SIF and the SICAR as well as Securitisation Vehicles and Structured Products.
In 1998, Luxembourg was the chosen domicile of the first registered Microfinance fund. With 24 MIVs currently registered in Luxembourg gathering around 45% of worldwide MIVs’ assets under management (or nearly USD 3 billion), the Grand-Duchy is the leading centre for the domiciliation of MIVs. Six of the largest 10 MIVs are based in Luxembourg.
Since 2006, the LuxFLAG label is granted for MIVs which invest 50%+ of their assets in microfinance. As at July 2010, Luxembourg numbered 26 MIVs with total assets of USD 2.8bn.
The Luxembourg Government wishes to support the development of Microfinance on financial markets and make Luxembourg the most attractive financial centre for a transparent and responsible Microfinance industry.
In 2009, the Luxembourg Government contributed to the creation of the Luxembourg Microfinance and Development Fund, an innovative initiative where, for the first time, the Luxembourg government endorsed the promoter ship of a social venture capital fund, investing in equity and debt of Tier 2 and Tier 3 MFIs.