our impact
MFX Impact Dashboard
This map provides an interactive way to explore our potential impact worldwide. For each country, the map displays key metrics including the number of deals, average deal size, and mitigated value at risk (VaR).
Hover over a country to instantly view impact metrics.
How We Measure Our Impact
At MFX Solutions, we use a financial metric known as Value at Risk (VaR) to assess the potential impact of our work. VaR quantifies how much a client may have lost due to market fluctuations within a specific timeframe.
Managing VaR lowers the likelihood of financial loss and creates a fixed payment for impact investors and borrowers across the globe. Â
By minimizing our clients’ exposure to economic shocks, we enable them to concentrate better on their business, creating impact. We bridge the gap between financial security and sustainable development.
We are proud to work alongside partners like Findev Canada and U.S. International Development Finance Corporation to enable these investments across the globe.
Our Approach to Risk Assessment
To determine the value we provide clients, we evaluate potential financial losses in “black swan” events—rare, unpredictable situations with severe consequences.
We analyze five years of currency data, focusing on the second standard deviation (SD) of annual returns to identify extreme outcomes. These worst-case scenarios help us understand the risks our clients might face.
The graph shows a sample distribution of annual currency returns over five years. The red dashed line marks the second SD. The blue dashed lined marks the sample’s average return, highlighting the extreme fluctuations we use to determine potential client losses in these rare events.
Fostering Loan Stability
Suppose a lender disburses a 100,000 USD loan to a borrower at a market exchange rate of 1 USD = 100 INR, equal to 10,000,000 INR. By hedging with us, they lock in the exchange rate, guaranteeing their USD return.
At repayment, the borrower pays back 10,000,000 INR as initially disbursed. If the currency has appreciated or deprecated, we settle the difference with the lender to ensure the agreed USD return.
The scenarios here illustrate how we secure loan agreements and handle settlements with our clients during currency appreciation or depreciation.
The Value of Currency Hedging in Loan Payments
Currency hedging protects organizations from the financial instability caused by fluctuating exchange rates.
The graph shows the impact of hedging on loan payments over time, comparing variable payments at the unhedged foreign exchange rate (dashed red line) with fixed payments at our hedged rate (solid blue line).
Without hedging, the cost of loan payments varies significantly due to market volatility, making financial planning challenging. By locking in an exchange rate through hedging, our clients can stabilize these payments, ensuring predictable cash flow and protecting against sudden increases in loan costs.
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