Mikro Kapital: more resilient portfolios with microcredit

How and why this asset class can offer an inflation shield. We talk about it with Vincenzo Trani, president of the company founded in 2008

Luxembourg - May 23rd, 2022

Original article in Italian on Investire: https://www.investiremag.it/investire/2022/05/23/news/mikro-kapital-portafogli-piu-resilienti-con-il-microcredito-103761/


Resilient, uncorrelated, little exposed to the volatility of international markets.
Micro fi nance in 2021 has unleashed its potential as an asset class capable of offering shelter froinfl ationary pressures due to rising energy prices and disruption of supply chains in the post-pandemic period.
Confi rming this trend are the results recorded by Mikro Kapital, a company founded in 2008, specialized in impact fi nance and microfi nance and active in 14 countries: last yeaclosed with a 23% growth in the assets of its funds, Mikro Fund and Alternatives, totaling € 1.028 billion.
In 2021, the NAV of the two funds achieved growth of 1.3% and 32.8% respectively.
The diversifi cation and selection activity of SMEs in Italy and along the Silk Road has alsallowed the company’s funds to achieve positive results in relation to the PAR30 + metric, which indicates the percentage of total open loans overdue for at least 30 days: this dis in fact, it stood at 2.3% for the Mikro Fund and 2.1% for the Alternative Fund, against, in the same period last year, a level of 3.4% and 2.4% respectively.
Looking at Italy, the company fi nally doubled the portfolio disbursed, reaching the threshold of 12 million euros.

We asked Vincenzo Trani, president of Mikro Kapital, how and why it is possible to diversify through specialized microcredit funds.

“Funds specialized in micro-credit are by their nature linked to the real economy and uncorrelated with fi nancial market trends.
In a period of high infl ation, an investment of thtype makes it possible to preserve the real value of the investment itself since the great advantage of a private debt portfolio in dynamic and fl exible markets is to adapt quicklychanges and therefore also to the rising interest rates and infl ation.
Emerging markets are the most dynamic in terms of monetary policies and a qualifi ed investor is able to exploit this volatility in the short and medium term to obtain an attractireturn ”.

What are the prospects for microfi nance?
“Today’s infl ation levels have not been seen for many years and will not disappear any time soon so it can be easily predicted that central banks will take a more restrictiveapproach.
The years of easy liquidity are over and this will lead to greater selectivity on the markets for both the bond and equity side.
But above all, access to credit will be mocomplex, thus encouraging microfi nance operators, who will approach the offer of banks with increasingly competitive rates “.

How does your credit analysis system work?
“The disbursement of the credit takes place following a careful assessment that fully follows the principles and procedures used by the European Bank for Reconstruction andDevelopment.
In addition, those who receive the credit are supported by a tutor who supports them in all the steps, from the planning and implementation of the business idea, in the loan repayment plan “.
There is a risk that many micro-sized companies will be left out of the market.

How can microcredit in our country stem this impact?
“Micro-credit is precisely the tool that allows those small and micro-enterprises that cannot access traditional credit channels (banks) to remain in the market.
In our country thcompanies form the basis of the economic fabric.
That entrepreneurship which, thanks to its creativity, resilience and spirit of initiative, has contributed to making our countryfamous all over the world.
The new budget law expands the number of micro-enterprises that can access microcredit, opening this possibility to all Srls (previously they were osimplifi ed Srls), plus it increases the maximum limit of obtainable loans, bringing it from 40,000 to 70,000 euros for private individuals, up to 100 thousand for Srl. Finally, itextends the maximum duration of the loan from 7 to 15 years.

Is it possible to describe in a few lines one of the projects you have fi nanced?
“I cite an example, in this case of female entrepreneurship: a young woman who inherits from her grandfather some land planted with pistachios in Bronte.
She decides to contthe business and make it grow.
After two years in which she analyzes all aspects of her new business venture, she realizes that she needs support to cover costs and make someinvestments to make a qualitative leap.
Thanks to Mikro Kapital she gets what she needs.
Today you can say that you have achieved considerable success and her products fromher DOP (“the real pistachio of Bronte”) are sold all over the world: Japan and Canada in the fi rst place, with the green Gemma brand “.