Travelling the world around – spreading the gospel of microfinance

“You feel humbled, considering everything you have, but also hope – having seen the difference that microfinance can make and what people are able to achieve, if given the chance. In addition, being out in the field gives a superior understanding of the markets where our funds operate”, Camilla Löwenhielm says. 

She and her colleague, Hanna Holmberg, have just returned from India. There they have got to meet with several people who have been able to borrow money through the bank’s funds, as well as local microfinance institutes, who administer the loans. A couple of weeks earlier, the duo made a similar trip to Armenia and Uzbekistan.  

“There have been plenty of inspiring meetings. Among the borrowers, we got to visit an Uzbeki steel company, where the owner had been able to develop his business and employ more people. We also met a couple of Indian families who had got mortgages to build new houses, with improved sanitation”, Hanna Holmberg says.  

Isn’t microfinance normally associated with loans to small-scale, individual entrepreneurs?  

“Absolutely, and a large part of the funding goes to exactly that target-group, out of which approximately half are women. At the same time, with our microfinance funds, we try to broaden the scope a bit. Just as in the case with the Indian families, where the microfinance institute we cooperate with have specialised in mortgages.”    

Camilla Löwenhielm adds: 

“Our overall goal is to help strengthen the financial infrastructure, which is a crucial factor for the standard of living to be able to grow. Since the needs differ between markets, we want to focus on the areas where our efforts can make the biggest difference.”    

A long-term co-operation with Swiss company Symbiotics  

In 2013 SEB was the first Swedish bank to launch a microfinance fund, with pension and insurance companies among its investors. Recently, the financing rounds for the bank’s tenth microfinance fund were completed – and Swiss company Symbiotics has been a partner, all the way from the start.  

“Symbiotics identify local lending institutes on our behalf and conduct due diligence of these, to make sure that they live up to our high set of standards. After this we, the portfolio managers at SEB, make a decision on every investment that is carried out”, Camilla Löwenhielm says.  

Symbiotics is also involved in the portfolio managers’ many trips around the world.  

“We go to meet various borrowers together with their analysts. In India, for example, we visited a clothing store, where we got to speak to the owner and look at his warehouse and ledger. We also met up with a group of women, who gather weekly in one of their homes, to meet the microfinance institute’s representative and make instalments on their respective loans. Among other things, we discussed the challenges related to Covid-19 with these women”, Hanna Holmberg says. 

“Meetings like these give us a clear image of how local businesses work and the challenges they are facing”, Camilla Löwenhielm summarises. 

The pandemic struck hard – but things are looking up 

Many companies, around the globe, took a heavy blow during the pandemic and the entrepreneurs in developing countries were no exception. 

“It’s been tough meeting people who were so severely affected by the pandemic – not only in the sense that their businesses suffered, many have also lost loved ones. At the same time, it was magical to see the decisiveness and will to come back among the entrepreneurs”, Hanna Holmberg says.    

It so happened that one of the bank’s microfinance funds also reached maturity, in the midst of the pandemic. 

“The entire situation with the pandemic became something of an enormous stress test for our model, and it feels good to conclude that it stood up so well. All our microfinance funds so far have in fact generated 6–8 percent in average interest rate on our investments, including fees and in local currency. In other words, they have been super stable!”, Camilla Löwenhielm says.    

When listening to you guys, one gets the feeling that you must really love what you do. 

“We do. It is hard to imagine any other job that would be equally interesting and rewarding. All the exciting encounters, all the progress we get to witness ... And we still haven’t grown tired of each other, despite all the hours we spend together, travelling”, Hanna Holmberg laughs. 

Camilla Löwenhielm nods in agreement.