Danish labour-market pensions provider PKA is investing DKK330m (€44m) in a new microfinance fund run by Danish manager Maj Invest, which is aiming to raise DKK1.3bn of investor capital for the fund over the next 12 months.
PKA said the fund helps many poor people, women in particular, who typically have no other options for borrowing money to fight their way out of the worst poverty.
Peter Damgaard Jensen, PKA chief executive officer, said: “We see this as a really good opportunity to combine several important values for us at PKA.”
“In addition, we get a reasonable return on our members’ pensions,” he said.
The investment supports two of the United Nation’s Sustainable Development Goals (UN SDGs) — SDG 5, gender equality, and SDG 8, decent work and economic growth, PKA. These are two of the seven SDGs that PKA focuses on in particular.
PKA said it would be a key investor in the new fund, initially investing around DKK200m, but with this amount growing to just over DKK330m as additional investors joined the vehicle.
The micro-loan fund – Maj Invest Financial Inclusion Fund III – operates in Latin America, Africa and Asia, investing in local banks, which provide loans to poor citizens, PKA said.
“It is helping to boost economic growth in the countries,” said Damgaard Jensen. “We know that productivity increases by up to 25% if women have easier access to the labour market.”
The pensions firm said its investments in Maj Invest’s first two micro-loan funds had yielded an average annual return of 12.4%.
Back in 2017, PKA invested DKK250m in the Maj Invest Financial Inclusion Fund II, which overall secured a total investor commitments of DKK870m.
Last summer, fellow Danish labour market pension fund Pædagogernes Pension (PBU) invested DKK100m in the Nordic Microfinance Initiative (NMI).
This fund focussed on poor people in Africa and Asia, predominantly vulnerable women dependent on men, providing loans to help them gain economic independence, according to PBU.