ABP starts investing in Third World micro credits

NETHERLANDS – ABP has said it has started investing in micro credits for small entrepreneurs in the Third World.

During the first quarter of 2005 ABP has invested €5m in an unnamed fund for micro credits. This means more than 14,000 small enterprises are being supported by an average loan of €350, aimed at providing help to an escape from poverty.

ABP said it has chosen for this kind of investment, because “it offers perspectives of reasonable returns and limited risks. Moreover micro credits will spread the investment risks of the whole portfolio”.

“It adds to the diversification of assets. There is no relation with equity or fixed income investments, nor with macro economic factors,” ABP spokesman Michel Meijs explained.

Meijs couldn’t give an indication about the expected returns. Possible plans for further investment in micro credits will depend on the experiences, he added. A date for an evaluation hasn’t yet been set.

ABP is amongst the first schemes in Europe which has invested in micro credits. They are being promoted by the United Nations, which has proclaimed 2005 as the International Year of the Micro credit.

Micro credits have been introduced in the early nineties. According to the Dutch daily Trouw so far an amount of more than $1.1bn has been invested in micro credits to 76m customers worldwide. $500m came from private organisations – of which $268m from the Netherlands – and $663m came from governments.

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