Market development

• Increasing access to local currency financing in emerging markets: MFX provides impact investors with the ability to hedge loan currencies with little to no collateral required. Such collateral requirements can tie up funds intended for development, representing a structural impediment that MFX helps mitigate. In addition, MFX provides investors with hedging products not otherwise available in the market.
• Reducing burden of currency risk on recipients of development finance: MFX helps providers and recipients of development finance to efficiently hedge their risk. Historically, because loans have been mostly in hard currency, risk has fallen to the recipient of development financing, a microfinance institution or an entity that is providing a good or service in the local market. This imposes a risk of loss if the local currency devalues which is difficult to quantify or manage in frontier markets with immature financial sectors and high volatility.