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The MASSIF fund provides much needed financial resources to small businesses and micro-entrepreneurs (MSMEs) by supporting the local financial intermediaries and institutions that can contribute to their development.

Driving local economies

For most developing economies it is the small businesses and micro-entrepreneurs (MSMEs) sector that generates the vast majority of economic activity and job creation. This sector is crucial for improving people’s quality of life.

But MSME's are also facing the most challenges when it comes to accessing capital and payment services. Through the MASSIF Fund, FMO can help these businesses jump-start and stimulate their growth and development.

Financial services through financial intermediaries

The MASSIF fund provides resources to financial intermediaries and institutions that cater to MSMEs and low-income households. Noting the disproportionate lack of access to finance in rural areas and for agricultural activities, MASSIF proactively targets institutions and funds playing a role in this space.

Thanks to MASSIF, these intermediaries can offer a wider range of stable finance and other financial services to MSMEs and lower-income households alike – including a variety of credit, savings, leasing and insurance products.

MASSIF was created in 2006 as a merger of three existing government funds: the SME Fund (since 1978), the Seed Capital Fund (1995) and the Balkan Fund (1998). FMO manages MASSIF on behalf of the Dutch Government; the fund enables us to invest in higher risk projects that we are unable to hold on our own balance sheet.

MASSIF clients can be:

  • SME or commercial banks looking to expand client base by downscaling
  • Microfinance intermediaries seeking to broaden their services in rural areas
  • Non-governmental organizations looking to professionalize and transition into official finance entities

MASSIF invests through a variety of instruments, from local currency debt and mezzanine structures to direct equity and investment funds. MASSIF also offers capacity development (CD) grants to strengthen its investees; these funds are deployed to finance risk management systems, management training, product development, independent board seats, and other capacity-building projects.

MASSIF is financially sustainable and revolving; new investments are financed through repayments and income from the existing portfolio.

Local currency financing

Through MASSIF, FMO can provide financial intermediaries with local currency financing. This allows these intermediaries to provide local currency products that will not translate into currency mismatches on their clients’ balance sheets.

In short: their business risks are reduced and they are better able to focus on what they are good at – doing business.

Client Cases

Fondo de Desarrollo Local, Nicaragua