Instruments

The Dutch member-organisations of the NPM offer a variety of instruments, which include:

• Short and long-term loans to finance loan portfolio, expansion and sometimes also running costs;
• Equity investments in microfinance institutions;
• Guarantees to enable organisations to attract national and international finance;
• Seed capital or revolving funds to start up new microfinance organisations;
• Temporary subsidies for technical assistance, investments, capacity building, specific research.

Each member has its own focus in terms of instruments
Appropriate instruments are determined depending on the development stage of the microfinance institutions and the focus of the platform members involved. Depending on the core activities and sources of funds, each member has its own focus in terms of instruments. Members linked to the banking sector focus mainly on the financial instruments and some actively participate in the boards of the microfinance institutions to enhance the governance. The Ministry acts as facilitator rather than as a direct provider of financial services. Other platform members focus on less developed microfinance institutions sometimes operating in difficult countries or regions. Sometimes risk profiles are too high for investments in which cases institutions can be assisted through temporary subsidies. Activities for the entire sector such as impact studies, co-ordination, capacity building are also often subsidised for this infant industry.

Shared mission
The diversity of the instruments and expertise enables the Dutch microfinance platform to support a wide range of microfinance approaches and reach a large variety of organisations. It is important to stress that while the Dutch organisations are diverse in terms of their focus and approaches they share the mission as formulated in the policy memorandum of the Ministry of Development Cooperation:

“To expand the access to financial services to improve the living conditions for the poor, reducing their vulnerability by protecting them from certain risks and giving them choices, and enabling local social and economic development."