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November 9, 2020

Schroders’ Blue Orchard introduces Covid-19 support fund for MSMEs

By Verdict Staff

BlueOrchard Finance, the Swiss impact investor that sold a majority stake to Schroders last year, has launched a Covid-19 support fund to aid over 200 million jobs in emerging and frontier markets.

The new ‘BlueOrchard Covid-19 Emerging and Frontier Markets MSME Support Fund’ will offer support funding to financial institutions.

According to BlueOrchard, the fund is expected to serve 20 institutions and three million micro-entrepreneurs and maintain 60 million jobs per each $100m.

The new offering is the result of an alliance between the impact investment manager with Schroders, the UK’s development finance institution CDC, the US International Development Finance Corporation DFC, and Japan International Cooperation Agency (JICA).

Both public and private investors will back the launch of the new vehicle by contributing nearly $140m.

KfW, on behalf of the German Federal Ministry of Economic Cooperation and Development (BMZ), is also anticipated to join the circle of investors.

Swiss State Secretariat for Economic Affairs (SECO) will support the fund with a dedicated Technical Assistance Facility. The aim is to accelerate the recovery of MSMEs in the most vulnerable sectors and geographies.

BlueOrchard CEO Philipp Müller said: “Unprecedented times require decisive action and innovators who go ahead. We are very thankful and proud that we successfully brought together a renowned group of public and private actors at record speed to support those most in need.”

Schroders group CEO Peter Harrison added: “Emerging and frontier markets are being hit disproportionately hard by the impact of Covid-19: the significant amount of capital raised already by this fund will make a vital difference to businesses which are providing key support to these economies.”

The new vehicle qualifies under the 2X Challenge criteria by the development finance institutions of the G7 to mobilise $3bn by 2020 for facilitating women’s economic empowerment in emerging markets.

In September this year, Schroders agreed to buy London-based £2.2bn family office Sandaire in a bid to bolster its wealth management offerings for UHNW clients.

 

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