Invest in development

Ruben Mooijman – De Standaard
07 February 2019
Would you like to invest in companies and organisations in developing countries? Then 4 development funds for investors are available for you in Belgium. You even benefit from an additional tax advantage.

A female farm worker, decorated with cheerfully coloured bead necklaces, smiles warmly at readers. 'Give farmers more opportunities,' she encourages in the accompanying text, 'and subscribe to Alterfin shares'. This advertisement appeared in the Belgian press several weeks ago.

Four so-called development funds are active in Belgium: in addition to Alterfin, there is Incofin, BRS Microfinance and Oikocredit Belgium. These cooperatives invest their shareholders' money in companies and organisations in developing countries. That way, they help these countries in their development. If this is successful, they can pay a dividend to the participants in the cooperative. The government believes that this concept deserves a boost, and consequently grants shareholders a tax advantage.

As such, the development funds aim for both financial and social returns. The first objective is achieved primarily via the principle of micro finance: lending money to small-scale entrepreneurs to be repaid with interest. The Belgian cooperatives often invest in local banks or credit institutions, which in turn grant micro finance loans. Loans are sometimes also made to agricultural cooperatives. The second objective is achieved by not pushing too hard financially. That way, it is possible for entrepreneurs in developing countries to improve their living standards.

The development funds aim for both financial and social returns.

Rates do not fluctuate

The four development funds work in more or less the same way, but they have different origins. Incofin has grown out of the Ghent-based VDK savings bank. This cooperative was featured in the news two years ago when Queen Mathilde visited Fusion Microfinance during a state visit to India, which provides microcredit to female entrepreneurs with the help of Incofin. Alterfin's origins are in the NGO world. Its shareholders include Oxfam Wereldwinkels, Oxfam Solidariteit, FairFin and Rikolto (previously Vredeseilanden). BRS Microfinance is an initiative of the Belgian Raiffeisen Foundation, named after the German pioneer of cooperative banking, Friedrich Wilhelm Raiffeisen. Cera and KBC are shareholders in BRS. Finally, there is Oikocredit Belgium, which is an initiative by the church, part of the international ecumenical organisation Oikocredit International.

Investors in the development fund must agree to the rules for cooperative investment. Share ownership involves risk: in the worst case scenario, the entire investment may be lost. Shares in cooperatives have a fixed value, the price does not fluctuate. There is limited liquidity: it is usually only possible to sell shares in a limited window during the year. The return comes from the dividend, the amount of which may vary depending on the results achieved. Incofin strives to pay the same dividend every year, whereas Alterfin's dividend percentage fluctuates. BRS Microfinance has recently started paying a dividend. Oikocredit's dividend fell significantly last year.

The funds lend money at a low interest rate to farmers and cooperatives in developing countries.

Up to €320 tax advantage

An attractive side effect of the development funds is their tax advantage. Of the amount you invest in a cooperative, you can book 5 percent to the following assessment year as a tax reduction. However, the reduction is subject to a number of conditions. The investment must be at least €380, and no more than €6,400. As such, the maximum tax advantage is €320. The shares cannot be sold for 5 years.

Furthermore, authorised cooperatives are also exempt from withholding tax on the first €190 of dividend. However, as from last year (2018), this advantage has been integrated in the general exemption on the first €640 on all dividends received. Finally, the withholding tax on income from movable assets decreases from 30 percent to 15 percent, the longer the shares remain in possession.


This article previously appeared in De Standaard in Dutch


In figures



Value of investment portfolio: €74 million

Profit in 2017: €2.8 million

Dividend paid in 2017: €1 million

Minimum investment: €130.20  (1/20th share)

Gross dividend 2017: 2.5 percent

Average dividend since 2008: 2.35 percent



Value of investment portfolio: €49 million

Profit in 2017: €1.1 million

Dividend paid in 2017: €0.6 million

Minimum investment: €62.50 

Gross dividend 2017: 1 percent

Average dividend since 2008: 2.6 percent


BRS Microfinance

Value of investment portfolio: €11 million

Profit in 2017: €0.24 million

Dividend paid in 2017: €0.07 million

Minimum investment: €500 

Gross dividend 2017: 0.5 percent

(Up to and including 2016, BRS Microfinance did not pay any dividend)



Value of investment portfolio (Oikocredit International): €982 million

Profit 2017 (Oikocredit International): €18 million

Dividend paid in 2017 (Oikocredit International): €10 million

Gross dividend 2017: 0.75 percent

Minimum investment: €250 

Average dividend since 2008: 1.2 percent


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