Mikro Kapital Pioneers the Expansion of Micro Credit along the Silk Road and Far Beyond

Mikro Kapital, a pioneering Luxembourg-based asset manager, is intent on building on the 16-year global expansion of its microfinance and microcredit initiatives, with an enhanced and invigorated thrust to partner with wealth management institutions in Asia and beyond.

The firm focuses on empowering small businesses across the historically significant Silk Road countries in Central Asia and Europe, and beyond into emerging markets worldwide. Established in 2008, the firm is renowned for its innovative use of microfinance techniques to deliver micro-credit to small entrepreneurs and SMEs to foster inclusivity, impact-investment outcomes, sustainable economic growth, and deliver considerable financial and also impact rewards to investors.

Empowering Remote and Underserved Markets

Mikro Kapital has dedicated itself to serving SMEs in some of the most underserved and high-potential regions globally, especially along the Silk Road, where the firm has built its own dedicated network of credit officers who live within and connect with the firm’s borrower-entrepreneurs within  communities across often remote and sparsely populated areas of the countries in which Mikro Kapital operates.

"Our activities not only leverage the historic Silk Road as a remarkably dynamic corridor of commerce but also fill a critical gap in micro financial services," said Johannes Feist, CEO of Mikro Kapital. “The firm's dedicated inclusive micro-finance solutions are designed to transform small local businesses, delivering leasing and micro-loans that enable inclusive economic development and sustainability within the communities we operate in. We are particularly keen on developing the power of women entrepreneurs in this region and, of course, continuing to grow and bring our expertise to new regions.”

Exceptional Track Record of Financial Stability and Impact

Mikro Kapital is proud of its exceptional, consistent/stable financial performance, maintaining a non-performing loan (NPL) rate below 1% on average across the history of the Firm, and achieving zero bond  defaults for our investors since inception—a testament to its highly effective risk management policies and procedures and the full control over the entire lending process. “Our stringent operational protocols and in-depth local engagement ensure that investments are not only safe and prudent, but also most impactful for the communities we seek to help and support,” added Feist. “And we not only achieve impactful outcomes in growing the economic prosperity of these communities, but our conservative and responsible lending approach and tight control & full ‘ownership’ of the end to end lending process is highly efficient and quite benign from a risk perspective, meaning we consistently deliver appealing returns in the high single digits or ‘teen’-double digits for our investors.”

Strategic Expansion and Licensing in Hong Kong

Mikro Kapital has recently expanded its presence to Hong Kong, establishing a new office there in 2023 to act as a hub for its growing activities in the Asia-Pacific region. This strategic move is accompanied by efforts to obtain important asset management licenses from the Hong Kong Securities and Futures Commission (SFC), which have now been granted, and are enabling the firm to enhance its service and sales presence, and deepen credibility and investor trust.

“Securing these licenses marks a significant step in our commitment to the region, allowing us to engage more comprehensively with the local and regional financial communities,” noted Feist.

Innovative Partnerships and Investment Opportunities

As part of this expansion strategy, Mikro Kapital is intensifying its collaboration with the wealth management community to unlock new investor channels and introduce a diverse portfolio of impactful investment opportunities for its investors These efforts are underscored by the development of innovative financial structures, such as special purpose vehicles (SPVs) that are tailored to meet the nuanced needs of collaborative partners and their underlying investors, who seek exposure to the socially responsible and consistently capital-stable and attractive investment opportunities Mikro Kapital can deliver.

Global Aspirations for Broader Impact

Looking forward, Mikro Kapital is not only expanding geographically but also broadening its product offerings. “Our venture into a vehicle timeshare business across our long-term silk road-country presence has been highly successful – and means we can help those entrepreneurs who may not yet qualify for our loans or leasing to get an initial ‘kick-start’ for their businesses by accessing vehicles. These vehicles might be used for example to both collect the materials they may use to build articles for sale, and also to deliver them to their clients. It was a way for us to help those in our entrepreneur community who are at the very early stages of growing their business, to build momentum. We’ve now brought this business to the region here through franchising it in Thailand, specifically our Anytime Operation. It’s a wonderful example  of our innovative approach to supporting entrepreneurship beyond traditional financial assistance,” elaborated Feist. “Further ahead and further afield, we have also set our sights on exploring regions such as Africa and South America, aiming to replicate our successful business models in these high-potential markets.”

Setting Industry Standards and Shaping Microfinance Practices

As the business expands, Mikro Kapital also aims to redefine the benchmarks for success in the microfinance industry. "We are committed to not just participating in markets but leading them by influencing practices, enhancing standards, and fostering sustainable development through our efforts," stated Feist. “We plan to leverage our extensive experience and deep understanding of microfinance to contribute actively to the evolution of the sector, particularly in regions where enhanced financial services can lead to transformative socio-economic change.”

We see ourselves in this region becoming a well-respected and well-known leading voice/expert, and a trusted collaborative partner, in inclusive microfinance. A highly visible and a vocal champion of inclusive microfinance in the region, working with our trusted partners to reach a diverse and broad investment community and SME entrepreneurs within this region. 

About Mikro Kapital

Mikro Kapital is a Luxembourg-headquartered alternative asset manager in microfinance and impact investing, which for the past 16-plus years has been specialising in the development and empowerment of micro, small and medium-sized enterprises across emerging and underserved markets and communities, with a long and successful track record of working along the Silk Road. Since its inception in 2008, the firm has been committed to delivering innovative financial solutions that promote economic development and societal improvement, at the same time as producing attractive and low-risk returns for investors, thereby delivering a new and fascinating offering for the wealth management community at large.