1

Portfolio Report June 30, 2014

1. Overview ......................................................................................................................................... 2

2. Portfolio Alterfin .......................................................................................................................... 5

2.1. Portfolio overview .................................................................................................................................... 5

2.2. Country risk assessment ........................................................................................................................... 9

2.3. Portfolio quality ...................................................................................................................................... 11

2.4 Overall risk assessment ........................................................................................................................... 12

3. Third party funds ........................................................................................................................ 14

3.1. FOPEPRO ................................................................................................................................................. 14

3.2. FEFISOL ................................................................................................................................................... 16

Appendix 1: Portfolio Alterfin 30/06/2014 .......................................................................................... 19

2

1. Overview

End of June 2014, the total portfolio at Alterfin (including the portfolios of Fopepro, Fefisol and Calvert

managed by Alterfin) amounted to EUR 44.2 million (+5% compared to last quarter).

* Some partners are part of more than one portfolio (Alterfin + Calvert for example) which means that the total number of partners

with an outstanding doesn’t correspond to the sum of outstanding partners of each portfolio.

Alterfin’s own portfolio has shown an increase of 3% over the last quarter and reached EUR 33.6 million on

30th June 2014.

This result gives a positive signal since the end of our collaboration with ResponsAbility. Alterfin is getting

back to its results of 2012 reaching the same total portfolio size. Compared to the same quarter in 2013, the

total portfolio has increased to 10%. It is to say that Alterfin has not only benefited from the growth of its

own portfolio but also from the continuous management of its other activities with

• Fefisol: The portfolio keeps growing with three new partners in Africa. Two of them are microfinance

institutions (MFIs), PAMF CI in Ivory Coast and Musoni in Kenya. The third partner SGTF, in Kenya, is

specialized in mango product. With an increase of 11% compared to the previous quarter, the

portfolio now amounts to EUR 4.9 million. Furthermore, we are foreseeing to expand our activities in

Togo (cacao/coffee), Marocco (MFIs) and Ghana (shea butter), for which disbursements are

expected in the current year.

• Calvert Foundation: We managed a portfolio equivalent to EUR 2.5 million at the end of June 2014.

Due to the seasonality of our partners’ activities in Central and Latin America, the outstanding of the

portfolio with Calvert remains lower than projected. However, Alterfin with Calvert’s collaboration

agreed to reach an outstanding commitment equivalent of USD 10 million. Up to end of June, a total

amount of USD 9 million has been already approved involving ten partners in total.

2011 2012 2013 31/03/2014 30/06/2014

Exchange rate USD/EUR 1,29485 1,32148 1,3766 1,37516 1,36452

Portfolio Alterfin € 21.374.463 € 25.305.003 € 28.189.189 € 32.665.789 € 33.669.661

Partners with outstanding Alterfin # 94 97 101 104 105

Portfolio responsAbility € 20.588.468 € 13.071.683 € 468.962 € - € -

Partners with outstanding rA # 25 10 1 - -

Portfolio FOPEPRO € 3.844.101 € 3.290.394 € 2.507.835 € 2.949.571 € 3.101.593

Partners with outstanding Fopepro # 22 18 18 22 23

Portfolio FEFISOL € 450.000 € 1.789.049 € 3.349.897 € 4.453.981 € 4.948.405

Partners with outstanding Fefisol # 1 8 11 14 17

Portfolio Calvert Foundation € - € 756.727 € 4.198.758 € 1.757.453 € 2.526.545

Partners with outstanding Calvert # - 1 8 6 6

Total Portfolio managed for others EUR € 24.882.569 € 18.907.853 € 10.525.452 € 9.161.005 € 10.576.543

Total Portfolio managed by Alterfin EUR € 46.257.032 € 44.212.856 € 38.714.641 € 41.826.794 € 44.246.203

Total Partners with outstanding # 108 115 116 123 123

Total Fair Trade EUR 25.448.055 19.842.974 19.151.032 18.860.213

Total Microfinance EUR 18.764.802 17.066.573 20.869.579 23.571.695

3

Total portfolios managed: breakdown per portfolio

Second quarter 2014: First Quarter 2014:

Total portfolios managed: breakdown per region

Second quarter 2014: First Quarter 2014:

0

10.000.000

20.000.000

30.000.000

40.000.000

50.000.000

Evolution Total Portfolio managed by Alterfin

Portfolio responsAbility Portfolio Fopepro

Portfolio Fefisol Portfolio Calvert Foundation

EU

R

76,10%

11,18%

7,01%

Total portfolio managed 30/06/2014:

distribution by portfolio

76,1%Alterfin

11,2%Fefisol

7,0%FOPEPRO

5,7%Calvert

77,58%

16,28%

5,03%

Total portfolio managed 30/06/2014:

distribution by portfolio

77,6%Latin America

16,3%Africa

5,0%Asia

0,6%Middle East

0,5%International

75,2%

17%

6%

Total portfolio managed 31/03/2014:

distribution by region

75,16% Latin America

17,29% Africa

6,12% Asia

0,88% Middle East

0,55% International

78,1%

10,6%

7,1%

Total portfolio managed 31/03/2014:

distribution by portfolio

78,10% Alterfin

10,65% Fefisol

7,05% FOPEPRO

4,20% Calvert

4

Our activities in Latin America went up to 77.58% by the end of June 2014, namely an increase of 2%

compared to the first quarter of the year. This is mainly explained by our partnership in Peru with Divisoria

and Frontera for which loans have been granted for the development of green products (fertilizer plants);

and in Ecuador, our longstanding collaboration with the two MFIs Jardin Azuyo and Espoir was trustworthy

enough to renew the credit facility with an increase in the laon size. Besides, 16.28% of the total portfolio

was invested in Africa with a slight increase via the Fefisol portfolio. In Asia, our situation remains stable with

5.03% of the total portfolio invested in three MFIs located in Laos and Cambodia.

Total portfolios managed: breakdown per product/sector

The total portfolio is split as followed: 53.27% was dedicated to MFIs partners, 42.63% to sustainable

agriculture organizations and 4.10% was used for the pool of funds used for Fefisol, Acerola, Sidi and MFX.

The proportion invested in microfinance sector keeps growing with an increase by 3.4% compared with the

previous quarter (from 49.9% to 53.27%). This growth reflects the willingness to consolidate the portfolio by

targeting big and less risky MFIs. In Latin America, several loans have been renewed with an increase of the

loan size. Also, in Africa, new loans have been granted to partners in Sierra Leone, Ghana, Ivory Coast and

Kenya.

Coffee and cocoa remain the main products financed by Alterfin among the smallholders’ organizations.

However, the proportion invested in coffee decreased during the second quarter (from 21.15% to 15.5%).

Except wine (3.4%) and sesame (2.6%), all the other products represent less than 2% of the total portfolio.

‘Other’ product mainly refers to the investment in green products for which Alterfin tends to be more and

more committed. Loans are specially granted for the development of fertilizer to be used in the coffee and

cacao crops. Compared to the first quarter of 2014, a new product appears in the list which is managed with

the Fopepro portfolio: marañon.

53,27%

15,54%

10,62%

4,10%

3,39%

2,57%0,48%

0,44%

0,83%

0,59%

0,57%

3,03%

Total portfolio managed 30/06/2014:

distribution by product

53,3%Microcredit

15,5%Coffee

10,6%Cacao

4,1%Funds

3,4%Wine

2,6%Sesame

1,8%Honey

1,7%Other

1,1%Soy

1,3%Sugar cane

1,1%Quinoa

0,5%Banana

0,1%Blueberry

0,5%Brazil nuts

0,4%Mango

0,8%Marañon

0,6%Olive oil

0,6%Rice

5

2. Portfolio Alterfin

2.1. Portfolio overview

On 30th June 2014, Alterfin’s own portfolio amounts to EUR 33.6 million (or USD 45.9 million), meaning a

growth of 3% over the last quarter. It corresponds to 76% of the total portfolio.

Compared with the capital amounted at EUR 39.2 million, this represents 86% of the social capital invested

in the South spread over 118 active partner organizations.

The table providing the list of our financing in the South is available in Appendix 1 (page 19).

33.669.660,52

€ 5.000.000€ 7.000.000€ 9.000.000

€ 11.000.000€ 13.000.000€ 15.000.000€ 17.000.000€ 19.000.000€ 21.000.000€ 23.000.000€ 25.000.000€ 27.000.000€ 29.000.000€ 31.000.000€ 33.000.000€ 35.000.000€ 37.000.000

Jan Feb March Apr May June July Aug Sept Oct Nov Dec

Evolution Portfolio Alterfin 2010-2014

Alterfin 2013 Alterfin 2012 Alterfin 2011 Alterfin 2010 Alterfin 2014

0

20

40

60

80

100

120

140

0

5.000.000

10.000.000

15.000.000

20.000.000

25.000.000

30.000.000

35.000.000

40.000.000

45.000.000

EU

R

Portfolio Alterfin and number of partners

Capital Portfolio Alterfin Nb. Active partners

Nb

.A

ctiv

e p

art

ne

rs

6

Breakdown per region

Alterfin remains strongly committed in Latin America with 85.24% of its own portfolio invested in the region.

This volume is spread over 85 partners having an outstanding. Although the number of partners has not

changed over the quarter, the volume outstanding did increase by 3% (81.8% first quarter). Repayments

were received in a higher proportion over the last quarter, which was counterbalanced by few

disbursements for loans granted for MFIs. Likewise, the number of active partners remains quite unchanged

in the other regions: 14 in Africa, 3 in Asia, 1 in Middle-East and 2 International (SIDI and MFX). In total, 105

partners have an outstanding at the end of June 2014.

Regarding the volume outstanding, Africa and Asia have a similar proportion, respectively 6.69% and 6.61%

(8.50% and 7.84% first quarter). The small decrease reflects the repayments occurred over the quarter.

Middle East accounts for 0.78% of the portfolio (against 1.4% from previous quarter), and International for

0.69% (against 0.78% from previous quarter).

Breakdown per country

Alterfin’s outstanding portfolio is spread over 25 countries. A new country has been added to the list since

the beginning of the 2014, Burundi where investment is granted for a cooperative specialized in fair trade

cocoa.

In the following charts, “Africa” represents the investment in FEFISOL, “Latin America” represents the

investment in FOPEPRO and Acerola and “International” the investments in SIDI and MFX.

85,24%

6,69%

6,61%

Alterfin portfolio 30/06/2014:

Volume outstanding by region

85,2% Latin America

6,7% Africa

6,6% Asia

0,8% Middle East

0,7% International 85

143

Alterfin portfolio 30/06/2014:

Number of partners by region

Latin America

Africa

Asia

Middle East

International

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

Alterfin portfolio 30/06/14 vs. 31/12/13: distribution by country

30/06/2014

31/12/2013

7

Overall, Alterfin has strengthened its collaboration in Peru, Ecuador and Cambodia over this first semester.

At the opposite, the proportion has decreased in Ivory Coast, Dominican Republic and Costa Rica. However,

Alterfin is foreseeing new partnerships in Costa Rica and Ivory Coast. Adding that, new disbursements for

renewed loans are expected in the upcoming months.

Breakdown per sector and product

.

19%

10%

10%

16%

7%

7%6% 4%

1%

0%0%0%0%

7%

Alterfin 30/06/14: distribution by country

19,0% Peru10,1% Honduras9,8% Nicaragua15,6% Ecuador7,1% Bolivia6,5% Cambodia6,2% El Salvador3,7% Chile3,2% Argentina3,7% Paraguay2,7% Guatemala0,8% Costa Rica2,7% Latin America1,0% Ivory Coast2,0% Africa0,8% Palestine0,5% DR Congo0,9% Togo0,7% Senegal0,7% International0,9% Burundi0,5% Kenya0,4% Mexico0,2% Colombia0,2% Tanzania0,1% Dominican Republic0,1% Laos0,0% Niger

59,4%

5,4%

14,0%

5,2%

4,5%

2,8%

Alterfin portfolio 30/06/14: distribution by sector59,4% Microcredit

5,4% Funds

14,0% Coffee

5,2% Cocoa

4,5% Wine

2,3% Honey

2,8% Sesame

0,9% Sugar cane

0,8% Olive oil

0,6% Brazil Nuts

0,9% Quinoa

0,7% Rice

0,7% Soy

0,6% Banana

0,2% Blueberry

0,0% Mango

1,0% Others

8

At the end of June 2014, Alterfin’s own portfolio is split as followed: 59.45% invested in MFIs (52.5% first

quarter), 35.17% in producers’ organizations (42% first quarter); and 5.39% in “Funds” referring to the

investments with Fefisol, Fopepro, Acerola, SIDI and MFX (5.5% first quarter). The tendency goes to investing

in MFIs where renewal of loans has been granted for longstanding partners, less risky, with a higher loan

size. The drop in the investments granted for smallholders’ organizations is mainly due to the lesser

investments in coffee product with a decrease of 6% over the last quarter (14.02% against 20.74%). A new

product appears during the second quarter 2014 under “others” but mainly related to loans granted for the

development of green products (fertilizer).

Breakdown per type of financing

Alterfin mainly works through loans (95.3%): either in

the form of loans to MFI’s or credit lines for

producers’ organizations. Equity investments (4.64%)

represent direct investments in microfinance partners

in the South as well as investments in funds co-

founded by Alterfin. Alterfin also uses guarantees

(0.06%) as a financing instrument, mainly to mitigate

the currency risk of investments in Africa.

Breakdown per currency

The major part of financing is in USD

88.62%, 7.91% is in EUR and 3.47% of

investments are done in local currency.

Since July 2010, Alterfin is a shareholder of

MFX Microfinance Currency Risk Solutions

and has therefore access to hedging

possibilities for financing in local currency.

Also, as of 2012, hedgings through the

Alterfin Guarantee fund became possible at

cheaper costs than through MFX. XOF: Franc CFA; KES: Kenyan Shilling; HNL: Hondurian Lempira; LAK: Laotian Kip; PEN: Peruvian Nuevo Sol

95,30%

4,64%

Alterfin portfolio 30/06/14:

distribution by type of financing

95,3% Loans

4,6% Equity

0,1% Guarantees

88,62%

7,91%

Alterfin portfolio 30/06/13:

distribution by currency

88,6% USD

7,9% EUR

1,6% HNL (100% hedge vs USD)

0,8% PEN (100% hedge vs USD)

0,3% PEN

0,5% KES

0,1% XOF

0,1% XOF (100% hedge vs EUR)

0,1% LAK

9

2.2. Country risk assessment

In March 2012, Alterfin reconsidered the need to insure the political risk of the portfolio invested in Fair

Trade with the ONDD. When financing a Fair Trade partner, Alterfin requires export sales contracts with

foreign buyers as collateral to reduce the risk factors inherent to the partner’s country. The portfolio

invested in microfinance institutions remains insured with the ONDD, except (as before) for DR Congo,

International, Ivory Coast, Laos, Palestine and Nicaragua.

In addition, Alterfin limits the country risk by using two indicators. The limit per country is also determined

by the perceived country risk. For the two indicators, this risk is subdivided in three categories (see table

below). The first indicator, the country risk, limits the total outstanding credits and investments in one

country that are not backed by European guarantees, as a percentage of the capital of Alterfin. The second

indicator, the country concentration, limits the outstanding portfolio in one country to the total Alterfin’s

portfolio. The table with both indicators has been determined as follows:

Country Risk Country concentration

Category Max. country/capital ratio Max. country/portfolio ratio

Minimal risk 15% of the capital 20% of total portfolio

Chile, Costa Rica, Mexico, Morocco, Peru, Uruguay

Modest risk 10% of the capital 15% of total portfolio

Colombia, EL Salvador, Guatemala

Increased risk 5% of the capital 10% of total portfolio

Argentina, Benin, Bolivia, Burundi, Cambodia, Cameroon, Côte d'Ivoire, Democratic Republic of

Congo, Dominican Republic, Ecuador, Honduras, Kenya, Laos, Nicaragua, Niger, Palestine,

Paraguay, Senegal, Tanzania, Togo, Uganda

The situation at 30/06/2014 is as follows:

Country Risk Country Concentration

Country Cat. % Cat. %

Africa 5 0,87% 2,09%

Argentina 5 0,42% 10 3,34%

Bolivia 5 5,99% 10 7,39%

Burundi 5 0,00% 0 0,90%

Cambodia 5 5,62% 10 6,76%

Chile 15 2,77% 20 3,54%

Colombia 10 0,00% 15 0,24%

Costa Rica 15 0,65% 20 0,79%

Ivory Coast 5 0,37% 10 0,81%

DR Congo 5 0,20% 10 0,47%

Dominican Republic 5 0,07% 10 0,08%

Ecuador 5 12,69% 10 15,92%

El Salvador 10 5,11% 15 6,39%

Guatemala 10 2,36% 15 2,83%

Honduras 5 6,30% 10 10,37%

International 5 0,22% 20 0,71%

10

Kenya 5 0,43% 10 0,27%

Laos 0 0,06% 10 0,07%

Latin America 0 2,30% 2,77%

Mexico 15 0,00% 20 0,38%

Nicaragua 5 7,75% 10 9,40%

Niger 5 0,01% 10 0,01%

Palestine 5 0,24% 10 0,80%

Paraguay 5 3,17% 10 3,74%

Peru 15 12,14% 20 18,05%

Senegal 5 0,16% 10 0,77%

Tanzania 5 0,00% 10 0,22%

Togo 5 0,17% 10 0,89%

We are beyond the country risk limits in Bolivia, Cambodia, Ecuador, Honduras and Nicaragua.

Country concentration has decreased in Honduras and Nicaragua over the last quarter but Alterfin still has to

mitigate its outstanding portfolio concentrated in Honduras. On the other hand, a close attention will be

given to Ecuador where our investments go beyond the defined limits. We are expecting to decrease the

outstanding in the coming months.

11

2.3. Portfolio quality

Risk coverage

Dec 2011 Dec 2012 March 2013 June 2013 Sept 2013 Dec 2013 March 2014 June 2014

Delays no restructured (written off excluded) € 7.723 € 689.663 € 12.667 € 866.388 € 619.856 € 280.340 € 288.659 € 466.027

Delinquencies > 30 days (< 90 days) € - € 689.663 € 12.667 € 404.010 € 12.434 € - € - € 123.482

Delinquencies > 90 days € 7.723 € - € - € 462.378 € 607.423 € 280.340 € 288.659 € 342.545

Restructured + Delays (written off excluded) € - € 85.963 € 96.349 € 93.070 € 84.568 € 44.430 € 85.753 € 379.565

Delinquencies > 30 days (< 90 days) € - € - € 19.687 € 44.430 € 85.753 € -

Delinquencies > 90 days € 85.963 € 96.349 € 93.070 € 84.568 € - € 379.565

Restructured No Delays (or <30) (written off excl.) € 978.310 € 383.944 € 776.687 € 699.873 € 718.969 € 524.392 € 707.162 € 414.632

Other Portfolio at Risk € - € - € 309.449 € 461.287 € - € 445.676 € 177.074 € 141.812

Total delinquent+restructured loans

+other portfolio at risk € 986.033 € 1.159.571 € 1.195.151 € 2.120.618 € 1.423.393 € 1.294.838 € 1.258.648 € 1.402.036

Write-down in the year € 105.175 € 433.757 € 117.038 € 182.593 € 278.831 € 501.965 € 342.142 € 507.079

General Risk Reserve € 737.113 € 1.100.000 € 1.087.612 € 1.087.612 € 1.087.612 € 1.087.612 € 1.129.924 € 1.129.924

Total portfolio EUR € 21.374.453 € 25.305.003 € 26.896.003 € 28.104.299

€

25.751.291 € 28.189.189 € 32.665.789 € 33.669.661

PAR 30/Total portfolio 0,0% 3,1% 0,4% 3,5% 2,7% 1,2% 1,1% 2,5%

PAR 90/Total portfolio 0,0% 0,3% 0,4% 2,0% 2,7% 1,0% 0,9% 2,1%

Delinquent+Restructured+at risk / Total portfolio 4,6% 4,6% 4,4% 7,5% 5,5% 4,6% 3,9% 4,2%

Write-down/ Total portfolio (Covenant 3%) 0,5% 1,7% 0,4% 0,6% 1,1% 1,8% 1,0% 1,5%

Delinquent+Restructured+at risk / General risk reserve 133,8% 105,4% 109,9% 195,0% 130,9% 119,1% 111,4% 124,1%

12

Comments on the delinquencies/provisions

Repayments since last quarter:

• Coopprobata (restructured): cuota of 25.600 USD paid end of May with current outstanding: USD

25.606,86 with expected repayment on 27/11/2014.

• Prestanic (restructured): Fully repaid at the beginning of July

• Café y Desarrollo (delays >60days): Outstanding on 30/06 USD 168.493 and on 03/07 USD

118.061,78

• Unicafec (delays>30days): Fully repaid on 05/06/2014

• Fecafem: USD 50.000 recalled from Fogal on 28/04 and 28/05.

• Comuel: USD 30.486 recalled from AlterfinGuarantieFunds on 19/05. Outstanding: USD 30.486 to be

restructured.

• CABF: EUR 39.217,65 recalled from AlterfinGuarantieFund on 15/05.

As of 30/06/14, we have considered the following write-downs for:

• La Florida: Additional write-down of UD 195.000 (+USD 195.000 from in 2012). Total remaining

outstanding after write-downs: USD 150.000 restructured as from 02/07.

• Benjamin Aceval: Write-down of USD 30.060 (50% of the blanco capital). Total outstanding: USD

30.060

Constant efforts are done to recover amounts in delay. Their situation is reviewed almost weekly during the

credit team meeting.

Delinquencies in detail:

See Excel sheet

2.4 Overall risk assessment

An overall risk level is defined for each partner presented to the credit committees. This level takes into

account different types of risk:

For MFI institutions:

• Institutional risk: ownership/governance, networks/alliances, type of institution/quality of

supervision, vision/mission/strategic positioning, conflicts of interests.

• Risk related to procedures, technology and people: pricing/credit technology, management and staff,

internal risk management, MIS.

• Portfolio and financial risks: Exposure/PAR, Financial structure/liquidity/leverage, Self-

sufficiency/margins, transparency.

• Market risk: competition, over-indebtedness, specific market, legal frameworks, political/economical

risk, currency risk.

For producers’ organizations, risks related to: country, institutions/members, production,

commodity/sales/pricing, management/staff, financials and credit history.

13

Regarding the number of partners, the risk level split among our partners remains quite identical over the

first semester, with the same proportion, except for the high risk partners for which we decided to add

Comako and El Quinacho in this category (medium/high risk in the first quarter). Although the number

continues to increase, Alterfin has limited outstanding with these partners. Most of the outstanding of the

portfolio (70%) is concentrated among low and low/medium risk levels’ partners. Its proportion has slightly

increased over the quarter, which reflects Alterfin’s strategy to invest more important amount in less risky

and big MFIs.

19%

20%

20%

23%

22%

32%

28%

28%

24%

24%

25%

22%

24%

27%

27%

18%

17%

15%

10%

9%

6%

12%

13%

16%

18%

0% 20% 40% 60% 80% 100%

30/06/13

30/09/13

31/12/13

31/03/14

30/06/14

Risk levels (as % # partners)

Low

Low/Medium

Medium

Medium/High

High

25%

25%

26%

37%

31%

39%

39%

40%

31%

39%

24%

20%

18%

19%

18%

8%

8%

10%

4%

3%

4%

7%

5%

9%

10%

0% 20% 40% 60% 80% 100%

30/06/13

30/09/13

31/12/13

31/03/14

30/06/14

Risk levels (as % outstanding)

Low

Low/Medium

Medium

Medium/High

High

14

3. Third party funds

3.1. FOPEPRO

Fopepro was established in 2009 by Alterfin, SIDI and FOGAL as a fund to finance smallholder farmers in the

Andean countries (Bolivia, Peru, Ecuador and Colombia), Central America (Nicaragua, Guatemala, Honduras

and El Salvador) and Paraguay. Simultaneously, a management company called Acerola was set up in Latin

America in order to manage this fund. Acerola was established in collaboration with SIDI and FOROLAC: the

network of rural financing in Latin America.

Decisions are made by an independent investment committee, composed of four members: two nominated

by the founders (Alterfin and SIDI), and two independent members.

Portfolio overview

Our activity through Fopepro continues to increase with a 5% growth over the last quarter

At the end of June 2014, FOPEPRO’s portfolio stood at EUR 3.10 million spread over 23 organizations with

an outstanding balance.

The second quarter indicates that 60% of the portfolio has been granted for our partners in Bolivia and Peru.

These countries are followed by Paraguay, Honduras, Ecuador, Guatemala and Salvador. Microcredit

represents 31.31% of the Fefisol portfolio, a small decrease of 4% compared with the first quarter (35.40%).

3.844.101

3.290.394

2.507.835

2.949.571 3.101.593

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

4.500.000

2011 2012 2013 31/03/2014 30/06/2014

Evolution Total Portfolio Fopepro

EU

R

31,07%

8,98%

11,81%

15,36%

28,99%

Fopepro portfolio 30/06/2014

Distribution by country

Bolivia

Ecuador

El Salvador

Guatemala

Honduras

Paraguay

Peru

16,42%

11,81%

31,31%

17,77%

5,91%

9,45%

FOPEPRO portfolio 30/06/2014

Distribution by product

Coffee

Honey

Marañon

Microcredit

Other

Quinoa

Sesame

Sugar cane

15

A total of 8 products have been accounted, which is one more than the previous quarter. Marañon, quinoa

and sesame have replaced the cocao and cashew nuts over this last quarter.

Restructured, no delays loans:

• Manduvira (sugar cane, Paraguay): $ 333.333,33. Next payment foreseen in December (USD

166.666,67) but they want to restructure with all lenders.

Delayed loan:

• APAVAM (coffee, Peru): $250,000. A total write-down of $206.741,50 has been accounted at the end

of the first quarter. The remaining outstanding: $43.258,5.

Writes-off: None

Outstanding portfolio at 30/06/2014:

ProjectName Product CountryName Outstanding in USD Outstanding in EUR

CREDIFLORIDA Microcredit Peru 200.000,00 146.571,69

APAVAM Coffee Peru 75.000,00 54.964,38

IMSA Other Peru 202.000,00 148.037,41

FUNDACION ALTERNATIVA Microcredit Ecuador 100.000,00 73.285,84

CEPESIU Microcredit Ecuador 80.000,00 58.628,68

LOS ANDES Microcredit Peru 250.000,00 183.214,61

COMIXMUL Microcredit Honduras 250.000,00 183.214,61

SCAES Honey El Salvador 60.185,03 44.107,11

ADEL-IXCAN Microcredit Guatemala 100.000,00 73.285,84

MANDUVIRA Sugar cane Paraguay 400.000,00 293.143,38

ANED Microcredit Bolivia 145.000,00 106.264,47

EL EJIDO Microcredit Ecuador 200.000,00 146.571,69

NAKHAKI Coffee Bolivia 120.000,00 87.943,01

Frontera de San Ignacio Coffee Peru 250.000,00 183.214,61

ECOLOGIC COFFEE Other Bolivia 250.000,00 183.214,61

PAMOC Marañon Bolivia 100.000,00 73.285,84

MUIJE Marañon Bolivia 150.000,00 109.928,77

GREEN FOREST Marañon Bolivia 250.000,00 183.214,61

WIRACCOCHA Quinoa Peru 250.000,00 183.214,61

ARASY Sesame Paraguay 250.000,00 183.214,61

COMSA Coffee Honduras 250.000,00 183.214,61

CIPRIAN GRIMALDES

FLORES Other Bolivia 200.000,00 146.571,69

PETRONA PILLCO NAVIA Other Bolivia 100.000,00 73.285,84

TOTAL $4.232.185,03 € 3.101.592,52

16

3.2. FEFISOL

In 2008, Alterfin in collaboration with SIDI (France) and Etimos (Italy) set up FEFISOL, a fund for Africa. The

fund is operational since 2011. FEFISOL is entirely dedicated to Africa and at least 75 % of its investments are

to be made in Sub-Saharan Africa (up to 25 % of the portfolio may be invested in North Africa). All countries

of the African continent are eligible. Alterfin’s activities in Africa will be developed preferably through the

fund. FEFISOL has indeed more financing opportunities in local currency and more opportunities to provide

equity and funds for technical assistance. FEFISOL funds will also be used to increase funding where Alterfin

cannot take additional risks.

At the end of 31/12/2013, the total committed amount since inception amounts at EUR 23.819.363. Alterfin

takes 4.4% of the pool ownership, namely a total amount of EUR 1.050.000. An additional participation of

500.000 EUR was approved by Alterfin’s Board of Directors on May 2013. Among all the shareholders, EIB,

FISEA, SIDI and Banca Etica increased their commitments as well: 21%, 20%, 13.4% and 1%. Two new

institutions - BOAD (West African Development Bank) and GLS Bank Germany invested respectively EUR

1.954.463 (8.2%) and EUR 750.000 (3.1%).

Portfolio overview

At the end of the second quarter, Fefisol’s total portfolio is equivalent to EUR 12.6 million including 37

clients spread over 22 countries.

The part of FEFISOL’s portfolio managed by Alterfin increased by 11% during this quarter. At the end of June

2014, the part of the outstanding amount balance managed by Alterfin stood at EUR 4.94 million with 17

partners. This represents 34% of the total portfolio of Fefisol which is split among the two founders SIDI and

Etimos.

Loans or credit lines represent 100% of the outstanding portfolio managed by Alterfin. There is no equity

investment yet. Our investments are spread in 8 countries with 60% of the portfolio managed by Alterfin in

Ivory Coast and Kenya. This is followed in lesser extent by Togo, Democratic Republic of Congo, Ghana, Sierra

Leone, Tanzania and Burkina Faso.

2.051.324

7.929.743

10.777.056

12.871.006

14.472.757

450.0001.789.049

3.349.8974.453.981 4.948.405

0

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

14.000.000

16.000.000

2011 2012 2013 31/03/2014 30/06/2014

Evolution Total Portfolio Fefisol

Total Fefisol Managed by Alterfin

EU

R

17

The portfolio is divided as 54.22% invested in microcredit and 45.78% dedicated to smallholders’

organizations (60.1% - 39.90% for the first quarter). We are foreseeing to expand our activities in Togo

(cacao/coffee), Marocco (MFIs) and Ghana (shea butter), for which disbursements are expected in the

current year.

Outstanding portfolio at 30/06/2014

Partner Country Sector Product Currency Outstanding EUR

ADOK TIMO Kenya Microcredit Microcredit KES € 167.616

BIO4EVER Togo Fair Trade Soy EUR € 250.000

ECOOKIM Ivory Coast Fair Trade Cacao EUR € 1.500.000

GGEM Sierra Leone Microcredit Microcredit SLL € 109.802

GRAMEEN GHANA Ghana Microcredit Microcredit GHS € 91.680

ID GHANA FNGO Ghana Microcredit Microcredit GHS € 171.900

JITEGEMEA Kenya Microcredit Microcredit KES € 360.375

JUHUDI KILIMO Kenya Microcredit Microcredit KES € 293.329

KPD Tanzania Fair Trade Coffee USD € 236.813

MUSONI Kenya Microcredit Microcredit KES € 251.425

NAARA Ghana Microcredit Microcredit GHS € 91.680

PAIDEK DR Congo Microcredit Microcredit USD € 257.126

PAMF CI Ivory Coast Microcredit Microcredit XOF € 396.367

SGTF Burkina Faso Fair Trade Mango EUR € 180.000

SMT Sierra Leone Microcredit Microcredit SLL € 165.467

SOPACDI DR Congo Fair Trade Coffee USD € 196.150

UCMECS Togo Microcredit Microcredit XOF € 228.674

TOTAL € 4.948.405

Portfolio at risk as of 30/06/2014:

Adok Timo - Kenya. Outstanding: EUR 86.421,99

The loan has been provisioned at 50% of the outstanding on 31/03/2014 considering the guarantee from the

Diocese of Kisumu. Proposal to reschedule the loan with a longer term maturity has been initiated for a third

restructuration.

3,64%

9,16%

7,18%

38,32%

21,68%

5,56%

4,79%9,67%

FEFISOL portfolio 30/06/2014

Distribution by country

Burkina Faso

DR Congo

Ghana

Ivory Coast

Kenya

Sierra Leone

Tanzania

Togo

30,31%

8,75%

52,25%

5,05%

FEFISOL portfolio 30/06/2014

Distribution by product

Cacao

Coffee

Mango

Microcredit

Soy

18

3.3. CALVERT

Calvert Foundation exclusively finances Fair trade producers’ organizations through loan participations with

Alterfin. We started managing funds for them in July 2012 on an experimental basis. The first loan was

disbursed to Naranjillo, a cooperative of cocoa producers in Peru. During May 2013, a new master

participation agreement was signed with Calvert Foundation envisaging them to approve up to USD 10

million by the end of 2013. Concretely, we will soon reach this limit of 10 million USD approved but it is not

likely that we will reach a total outstanding of 10 million USD as the credit lines are provided in 2 regions

(Peru and Central America) having different but overlapping production cycles.

We now manage 10 partners (6 with outstanding) for a total amount outstanding of EUR 2.5 million. The

increase over this quarter is due to the renewal of credit facilities with some of our partners in Peru and

Honduras. On top of the credit facility, a long-term loan has been granted to our partner Divisoria to finance

a fertilizer plant. Up to end of June, a total amount of USD 9 million has been already approved involving ten

partners in total.

Outstanding portfolio at 30/06/2014

Partner Country Sector Product Outstanding in EUR

Frontera Peru Fair Trade Coffee € 494.358,35

UNICAFEC Peru Fair Trade Coffee € 261.716,84

ACOPAGRO Peru Fair Trade Cacao € 18.927,14

ACOPAGRO Peru Fair Trade Cacao € 342.000,85

COMSA (Marcala) Honduras Fair Trade Coffee € 310.254,62

Naranjillo Peru Fair Trade Cacao € 549.643,83

Divisoria Peru Fair Trade Cacao € 366.429,22

Divisoria Peru Fair Trade Other € 183.214,61

TOTAL € 2.526.545,46

There is no delay, no restructuration.

756.727

4.198.758

1.757.453

2.526.545

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

4.500.000

Evolution portfolio Calvert

EU

R

19

Appendix 1: Portfolio Alterfin 30/06/2014

The table below provides an overview of our financing in the South.

Partner Country Currency Sector Product Outstanding in EUR

20 de Abril Nicaragua USD Microcredit Microcredit € 91.607,31

ACEROLA Latin America USD Funds Funds € 22.480,43

ACOPAGRO Peru USD Fair Trade Cacao € 366.429,22

ADEL IXCAN Guatemala USD Microcredit Microcredit € 219.857,53

ADICLA Guatemala USD Microcredit Microcredit € 146.571,69

ADISA Guatemala USD Microcredit Microcredit € 146.571,69

Adok Timo Kenya KES Microcredit Microcredit € 170.372,26

AMC El Salvador USD Microcredit Microcredit € 183.214,61

APACOOP Costa Rica USD Microcredit Microcredit € 146.571,69

Apavam Peru USD Fair Trade Coffee € 219.984,82

APECAP Ecuador USD Microcredit Microcredit € 73.285,84

Apicoop Chile USD Fair Trade Blueberry € 824.465,75

Arasy Paraguay USD Fair Trade Sesame € 952.856,02

ASDIR Guatemala USD Microcredit Microcredit € 410.400,73

ASEI El Salvador USD Microcredit Microcredit € 109.928,77

BENJAMIN ACEVAL Paraguay USD Fair Trade Sugar cane € 44.059,45

BIO4EVER Togo EUR Fair Trade Soy € 250.000,00

CABF Ivory Coast EUR Fair Trade Cacao € 78.435,30

CACIL Honduras USD Microcredit Microcredit € 425.057,90

Café de Altura Costa Rica USD Fair Trade Coffee € 179,92

CAFE Y DESARROLLO Mexico USD Fair Trade Coffee € 123.481,72

Cafepsa Honduras USD Fair Trade Coffee € 57.084,95

CAFFEX Honduras USD Fair Trade Coffee € 166.788,06

Canaan Palestine EUR Fair Trade Olive oil € 260.656,37

CASIL Peru USD Fair Trade Coffee € 147.893,63

Cecocafen Nicaragua USD Fair Trade Coffee € 162.515,18

CEPROAP Peru USD Fair Trade Coffee € 293.143,38

CIDERURAL Peru USD Microcredit Microcredit € 131.914,52

COCAFCAL Honduras USD Fair Trade Coffee € 586.286,75

COCAFELOL Honduras USD Fair Trade Coffee € 366.429,22

COCOCA Burundi USD Fair Trade Cacao € 293.143,38

COMAKO Ivory Coast EUR Fair Trade Mango € 16.229,02

Comixmul Honduras HNL Microcredit Microcredit € 1.319.145,19

COMSA (Marcala) Honduras USD Fair Trade Coffee € 407.471,17

Comuel Honduras USD Fair Trade Coffee € 44.684,06

Consolidar Colombia EUR Microcredit Microcredit € 78.813,27

Consorcio Vinicola Chile EUR Fair Trade Wine € 209.452,48

COOPPROBATA Dominican Republic USD Fair Trade Banana € 26.539,53

Divisoria Peru USD Fair Trade Coffee € 452.173,66

ECOOKIM Ivory Coast EUR Fair Trade Cacao € 246.867,53

Edaprospo Peru USD Microcredit Microcredit € 260.164,75

El Quinacho Peru USD Fair Trade Cacao € 146.571,69

Emprender Bolivia USD Microcredit Microcredit € 274.821,92

ENLACE El Salvador USD Microcredit Microcredit € 91.607,31

ESPOIR Ecuador USD Microcredit Microcredit € 1.524.461,35

Fapecafes Ecuador USD Fair Trade Coffee € 216.193,24

FDL Nicaragua USD Microcredit Microcredit € 1.465.716,88

20

Fecafem Ecuador USD Fair Trade Coffee € 55.330,81

FECECAV Togo XOF Microcredit Microcredit € 19.504,33

FEFISOL Africa EUR Funds Funds € 679.550,59

FONDECO Bolivia USD Microcredit Microcredit € 586.286,75

FONDESURCO Peru USD Microcredit Microcredit € 889.983,29

Fonds Cooperatif Laos LAK Microcredit Microcredit € 21.664,57

FOPEPRO Latin America USD Funds Funds € 879.430,13

Fortalecer Peru USD Microcredit Microcredit € 4.683,26

Frontera Peru USD Fair Trade Coffee € 403.072,14

FUDECOSUR Costa Rica USD Microcredit Microcredit € 109.928,77

Fundación Alternativa Ecuador USD Microcredit Microcredit € 806.144,29

Fundenuse Nicaragua USD Microcredit Microcredit € 366.429,22

GREEN FOREST Bolivia USD Fair Trade Brazil nuts € 211.890,73

Hattha Kaksekar Cambodia USD Microcredit Microcredit € 732.858,44

IDESI NACIONAL Peru USD Microcredit Microcredit € 732.858,44

Impro Bolivia USD Microcredit Microcredit € 293.143,38

INVALSA Bolivia USD Fair Trade Coffee € 219.857,53

Inversiones Confianza El Salvador USD Microcredit Microcredit € 622.929,67

Jardin Azuayo Ecuador USD Microcredit Microcredit € 1.465.716,88

KOKARI Niger XOF Microcredit Microcredit € 3.430,10

KPD Tanzania USD Fair Trade Coffee € 73.285,84

L A PRIMAVERA Bolivia USD Microcredit Microcredit € 366.429,22

LA FLORIDA Peru USD Fair Trade Coffee € 395.743,56

La Riojana Argentina EUR Fair Trade Wine € 1.086.286,75

LOS ANDES Peru USD Microcredit Microcredit € 366.429,22

MANDUVIRA Paraguay USD Fair Trade Sugar cane € 244.286,14

MFX International USD Funds Funds € 146.571,69

Micronegocios El Salvador USD Microcredit Microcredit € 201.536,07

Naranjillo Peru USD Fair Trade Cacao € 366.429,22

Norandino Peru USD Microcredit Microcredit € 436.050,77

Optima El Salvador USD Microcredit Microcredit € 476.357,99

ORO VERDE Peru USD Fair Trade Coffee € 44,29

Padecomsmcredit El Salvador USD Microcredit Microcredit € 395.743,56

PAIDEK DR Congo USD Microcredit Microcredit € 109.928,77

PORVENIR Bolivia USD Microcredit Microcredit € 164.893,15

PRESTANIC Nicaragua USD Microcredit Microcredit € 4.277,69

PRISMA Peru PEN Microcredit Microcredit € 109.928,77

PRODESA Nicaragua USD Microcredit Microcredit € 366.429,22

PRO-RURAL Bolivia USD Microcredit Microcredit € 109.928,77

SAES Bolivia USD Fair Trade Coffee € 179.550,32

Sagrada Familia Chile EUR Fair Trade Wine € 205.000,00

SAN ANTONIO Ecuador USD Microcredit Microcredit € 219.857,53

San Juan Del Oro Peru USD Fair Trade Coffee € 21.985,75

SERFIGSA Nicaragua USD Microcredit Microcredit € 366.429,22

SIDI International EUR Funds Funds € 86.262,31

SOPACDI DR Congo USD Fair Trade Coffee € 43.971,51

TERRAL Senegal EUR Fair Trade Rice € 250.000,00

Tocache COOPAC Peru USD Microcredit Microcredit € 230.850,41

TPC Cambodia USD Microcredit Microcredit € 1.469.381,17

UCA San Juan Rio Coco Nicaragua USD Fair Trade Coffee € 100.497,35

21

UCMECS Togo XOF (100% hedge vs EUR) Microcredit Microcredit € 19.056,13

Ucosemun Nicaragua USD Fair Trade Coffee € 366.429,22

UNICAFEC Peru USD Fair Trade Coffee € 130.838,79

Unidad y Progreso Ecuador USD Microcredit Microcredit € 135.578,81

Union El Ejido Ecuador USD Microcredit Microcredit € 513.000,91

UROCAL Ecuador USD Fair Trade Banana € 232.490,38

Wanigu Honduras USD Microcredit Microcredit € 27.482,19

Wiraccocha Peru USD Fair Trade Quinoa € 293.143,38

TOTAL € 33.669.660,52