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      Microfinance is a form of impact investing that exists in its own right and is the driving force behind a global industry. The focus of that industry is Inclusive Finance: the provision of financial goods and services to the un-banked.

      Luxembourg has a history of commitment to the microfinance sector. Indeed, this has been one of the principal vehicles for the deployment of Luxembourg’s overseas development aid, assisted by technical training. At December 2015, Luxembourg funds accounted for 61% of MIV assets, up from 44% in 2006. This reflects the successful growth of funds with widest international distribution: 11 MIV with assets of over $250m represent 62% of assets.

      Promoters can choose from a range of regulated and unregulated structures. Hence, MIVs have been created as: undertakings for collective investment (UCIs) regulated by Part II of the Law of 20 December 2002 (replaced by Part II of the Law of 17 December 2010) as investment companies in risk capital (SICAR) or as Specialised investment funds (SIFs). Other popular structures are the securitisation vehicle and structured products.

      A Grand Ducal Regulation of 14 July 2010 provides that UCIs and SIFs invested in microfinance and which meet certain conditions are exempt from the annual subscription fee, or taxe d’abonnement.