MFX is a socially-oriented company that supports impact investing with affordable hedging products and risk management education.
MFX, created in 2009, gives impact investors the ability to protect themselves against the risk of currency movement. Using hedging, currency risk can be taken out of the impact investment value chain, thus creating a more stable, secure impact investment business model.
Starting in 2005, a group of microfinance organizations – lenders, investors, raters, networks, and foundations – came together to seek an answer to the growing problem of currency risk in the microfinance industry. Led by many of the most prominent organizations in microfinance, this group initiated and funded an industry project to develop a comprehensive solution.
In 2009, MFX Solutions (MFX) was born as an organization dedicated to providing microfinance lenders with affordable and accessible hedging instruments and the know-how to better manage currency risk. The founders’ vision was to create a full-service industry initiative, serving both microfinance funds and institutions with education and hedging products.
In the past 8 years, MFX has hedged nearly one billion dollars in loans to small entrepreneurs in developing countries covering more than 45 currencies. Its education programs have trained hundreds of micro-SME bankers across Africa on managing market risk. MFX won the award as the best product innovation in microfinance in 2010 and the G-20 SME Finance Challenge in 2011.
Since 2013, MFX has expanded its services to the growing field of impact investing and now has a growing client base of impact investors including in the fields such as renewable energy, agriculture, SMEs and housing.
MFX believes that when currency and market risks are managed effectively, development lending can reach more entrepreneurs at the bottom of the pyramid, more sustainably, at a lower cost. Better access to foreign exchange hedging tools and financial education can therefore have a profound effect on global poverty.