Impact investors and borrowers can find it hard to develop the hedging relationships so they need to cover their risk from other sources. Banks often don’t want to trade with social lenders and borrowers or require onerous levels of collateral. Banks also only hedge in liquid currencies, which leaves out places like the Sub-Saharan, where impact investment can have the biggest, well, impact.
MFX gives impact investors an easier solution: with a single counterparty, impact investors can tap the hedging offerings of major banks as well as an exotic currency hedging pool known as The Currency Exchange Fund (TCX).
MFX business model diagram:
And because MFX is backed by guarantees from the US Government agency OPIC, we can (in most cases) hedge without requiring collateral. This allows impact investors to put more money toward their mission and avoid the hassle of a margin account.
MFX works with impact investors and companies across a range of industries from Microfinance, SME lending, renewable energy investment, low-income housing, health and sustainable agriculture. To see MFX’s list of clients click here.