NETHERLANDS - The credit crunch is causing institutional investors to shy away from committing to microfinance funds, says a leading player.

Theo Brouwers, director at SNS Asset Management, said the firm had felt the consequences of the financial crisis with the launch of its second institutional microfinance fund, which was closed today.

"We have noticed that despite the large interest in microfinance, the decision process needs more time," said Brouwers, stating that some parties have even postponed their participation until calm had been restored on the financial markets.

He added: "Nevertheless, we have succeeded in receiving commitments from reputable parties, and we have exceeded our target of €100m."

According to Brouwer, the growth and performance of microfinance institutions is good, despite the drying up of capital.

SNS Asset Management, which currently manages €22bn of institutional assets, is one of the front runners in microfinance for institutional investors. One of its directors, Harry Hummels, is the author of influential guidelines for responsible investing (SRI) by pension funds.

In a separate development, parent company SNS Reaal today received a €750m cash injection from the Dutch central bank (DNB).

The company said in a statement today: "In recognition of the fact that, in the current environment, capital requirements for financial institutions are set higher, and in order to be able to weather any further market turmoil, we have decided to take up the committed €500m in core capital from Stichting Beheer SNS Reaal and have proactively requested €750m of core capital from the Dutch State."

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