Together supporting microfinance
and microinsurance in the South

through invesments

Garanties - Building trust

BRS can also serve as a guarantor for the repayment of a loan which a microfinance or microinsurance organisation obtains from a commercial bank in its own country.

As a result banks will grant loans more easily.

This guarantee is an alternative way of providing financial support to organisations

Why does BRS serve as a guarantor?

We think it is important that microfinance and microinsurance institutions can rely on the assistance of conventional, local financial institutions. And vice versa.

We want to stimulate the collaboration between both of these sectors because it will contribute to the growth of microfinance and microinsurance organisations towards financial independence.

If our guarantee can increase the trust between the established banks and the more informal savings and credit cooperative then we think that this is a valuable and constructive form of financial support.

Our guarantee fund

BRS has a guarantee fund of 500,000 euros.

This fund will cover the credit lines which local banks or financial institutions extend to microfinance and microinsurance organisations.

One important condition for serving as a guarantor for a loan is that the local bank is also prepared to share part of the risk.

In practice we have seen that this does not always go without saying. It is however possible.

What does this guarantee mean in practice?

We have listed two examples below which illustrate the significance of our guarantee fund.

  • In Ethiopia BRS has an agreement with a commercial bank to share 45% of the risk of a credit line to the microfinance organisation, Wasasa.
    Thanks to a 90,000 euros guarantee, Wasasa now has a 200,000 euros credit line. This allows Wasasa to extend loans to over 2,000 clients. 
  • In Peru the microfinance organisation Confianza can extend up to 1,000,000 euros of credits to its clients thanks to a BRS guarantee of 100,000 euros.