1st presentation symbiotics

1. Investments in local currency:
availability and advantages
Alexandr Fando
15 November 2019

2. 15 November 2019 2
Symbiotics is a socially responsible investment company specialized in provision
of sustainable and inclusive finance to emerging markets.
 Set up in 2004 in Geneva
 155 staff in 8 offices worldwide
 USD 5 billion originated
 Financing 289 institutions
 Working in 72 countries

3. 3
Local currency investments help alleviate FX risk
 Currency risk means the risk linked to a misbalance between the volume of a specific currency in
the assets and in the liabilities of a financial institution.
 Currency risk can actually become a financial institution’s largest risk and its largest source of
losses if badly managed.
 Local currency investments are typically associated with lower repayment distress for end-
borrowers, offering the latter more protection against foreign exchange shocks.
 Still today, the majority of debt financing from Microfinance Investment Vehicles (MIVs),
although declining, is in hard currency.
Share of LCY in % of total debt portfolio
* Swiss MIVs mainly comprise funds
managed by ResponsAbility, Blue
Orchard, and Symbiotics

4. 4
Instruments and strategies for investors and financial institutions
 Swap contracts with banks for liquid currencies (RUB, KZT)
 Swap contracts with specialized vehicles such asTCX, MFX, or Frontera
 Swap mechanism offered by a DFI (IFC’s “Samarkand Bonds” in Uzbekistan)
 Swap offered by a local regulator (NBT in previous years, NB of Kyrgyz Republic)
 Issuance of debt securities on the local market or abroad
 Unhedged strategy = investor takes the FX risk (Oikocredit, Symbiotics)
Unhedged LCY investments in % of total debt portfolio
* Swiss MIVs mainly comprise funds
managed by ResponsAbility, Blue
Orchard, and Symbiotics

5. More information on
symbioticsgroup.com