FREQUENTLY ASKED QUESTIONS
1. How can I contribute? – How do I buy shares?
Kolibri Kapital AS is not a conventional donation-based NGO but a public limited company. You can contribute by becoming a shareholder in the company. Kolibri Kapital AS share capital is lent onwards to microfinance institutions in developing countries.
2. How do I get my money back?
Kolibri Kapital AS’s B- shares are traded on Oslo Stock Exchange’s Merkur Market. Shares may therefore be bought and sold through your bank or stockbroker, at the prevailing price in the market.
3. Is there a risk of losing my money?
The value of shares may vary, both because the interest in buying and selling Kolibri Kapital shares varies over time, and because of variations in underlying operational performance. The microfinance institutions that the company lends to may, for example, not be able to pay the interest or loan principal that they owe. We have a diligent lending process and are careful in who we lend to, and we aim to keep the risk of value reduction for our shareholders as low as possible.
4. How does Kolibri Kapital AS fund its administrative costs?
Administrative expenses and overheads are primarily funded by the interest we receive on the capital we lend out. The company is very cost conscious and strive to keep costs down to ensure that as much of our capital as possible reaches those that need it.
5. Why isn’t Kolibri Kapital AS set up a bank?
It would potentially have been beneficial to be set up as bank rather than as an investment company. Kolibri Kapital could then, for example, borrow external capital which we then could lend on to microfinance institutions. There is, however, very extensive and demanding regulation associated with being organised as a bank. The running costs would therefore have been prohibitive. The equity capital requirements for establishing a bank are also very high.
6. Why support the developing world on normal business principles, like charging interest at commercial terms?
Kolibri Kapital AS lends money to microfinance institutions that in turn are run on a commercial basis and that charge interest to their customers. There will always be an element of having to prioritise which projects to fund, and if the loans were interest-free (or had subsidised interest rates) we risk that bad projects get prioritised over good projects.
If the interest rates were subsidised then people who has access to normal banks anyway (and therefore don’t really need microfinance) will be attracted to the microfinance institutions to borrow at the lower cost, and thereby displace the poor people that really need that service.
7. Can microfinance be profitable?
Yes. Data from MicroBanking Bulletin, for example, report that the 1033 leading microfinance institutions in the world in on average made a return on assets of 2.4% and a return on equity of 13.2%, which is comparable to commercial banks in Western Europe and the US.
Most microfinance institutions acknowledge that they need to run on a sustainable basis to be able to support the poor long term. They therefore constantly strive to increase the efficiency of their operations to protect margins and allow them to service their capital.
8. A- and B- shares – What’s the difference?
The A-shares are owned by Korsveibevegelsen and Misjonsalliansen. If the company wishes to change its Articles of Association, it needs a majority approval of both the A and B shareholders. This a mechanism established to ensure that the company’s mission statement is protected and remains the provision of capital to microcredit institutions in developing countries. In all other matters the two classes of shares have equal voting and economic rights.
9. When will I receive dividends on my shares?
Kolibri Kapital AS needs to ensure it runs profitably, meaning its interest income exceeds its costs. When it is economically viable to do so, however, it may pay out dividends to its shareholders. If the board of directors recommends the payment of dividends, these need to be approved by the shareholders at a general assembly.