ALL THIRD WAY ALL THE TIME:

Taking Microfinance to the Next Level (Jennifer L. Schenker, 2/27/08, Der Spiegel)

In 2001 a pair of Europeans, Jean-Philippe de Schrevel and Cédric Lombard, discovered they shared a mutual conviction that the best way to cure poverty is through the capital markets. So they began lending money to microfinance institutions through a Geneva vehicle called BlueOrchard. Belgian de Schrevel, a former McKinsey & Co. consultant, got his MBA at Wharton, while Lombard hails from one of the families behind Lombard Odier Darier Hentsch, among Switzerland's oldest private banks. (Lombard is no longer involved with BlueOrchard, but has founded a Geneva company called Symbiotics that provides consulting and services to the microfinance industry.)

Seven years later, BlueOrchard Finance manages a loan portfolio of more than $710 million through different funds launched in partnership with major international banks such as Dexia, Rothschild, BBVA and Morgan Stanley. Along the way it has forged relationships with more than 107 microfinance institutions in 36 countries.

Now, BlueOrchard wants to do for microfinance institutions what local lenders do for loan recipients: help them expand their businesses. It is launching a Luxembourg-based private equity fund it hopes to grow to $100 million by the end of 2008. The fund is aimed at buying into microfinance institutions around the world and helping them launch new services for people without access to banks, including savings accounts, mortgages, and insurance.