InFiNe hosted a Knowledge Sharing Event dedicated to a landmark transaction in inclusive finance: the issuance of the first sustainability bond by a microfinance institution in the Dominican Republic, BANFONDESA, listed on the Luxembourg Stock Exchange. Organised with the support of InFiNe members GGGI and the European Investment Bank (EIB), the event examined the structuring process, key challenges and lessons from this pioneering operation.
The discussion focused on the concrete steps required for a locally rooted microfinance institution to access capital markets while preserving its social and environmental mandate.Drawing on the experience shared by the speakers, the exchange addressed governance strengthening, financial structuring and sustainability frameworks required to meet domestic and international market expectations.
In this context, the contributions of GGGI and the EIB illustrated how technical assistance, early-stage financing and credibility-building can support inclusive finance institutions in bridging the gap between local markets and international investors. The discussion highlighted the value of sustained member engagement in translating innovative financing concepts into operational realities.
The event retraced the multi-year preparation behind the bond issuance. BANFONDESA’s engagement with thematic finance began in 2018, supported by the EIB through a EUR 3.6 million loan combined with technical assistance from the Frankfurt School of Finance & Management to strengthen internal capacities and reporting.
As the institution’s green and gender-focused portfolio grew, traditional development finance instruments proved insufficient. With technical support from GGGI and funding from the Government of Luxembourg, BANFONDESA prepared a sustainability bond to diversify its funding sources while remaining aligned with its mission.
The bond was issued on the Santo Domingo Stock Exchange in November 2024. BANFONDESA subsequently applied for inclusion on the Securities Official List of the Luxembourg Stock Exchange to enhance visibility and credibility with international investors, as part of a broader funding strategy.
In closing, Ivan Carvajal reflected on the broader significance of the journey:
“We are an island, both geographically and financially. What we have been doing is building pathways, step by step, so that institutions like BANFONDESA can connect to international markets while remaining rooted in their local mission.”
The BANFONDESA transaction illustrates how inclusive finance institutions can access capital markets when supported by coordinated public and private action.
Photo © Inclusive Finance Network Luxembourg asbl
