Why Financial Inclusion? Agents of Impact: Follow the Talent. M&G provided US$90 million senior debt financing to MEF, a $690 million microfinance debt fund set up in 2009 to offer a reliable and stable source of finance to microfinance institutions (MFIs) in a wide range of developing countries. MEF has progressively grown the share of local currency lending in its portfolio to 62% (all local currency loans are fully hedged to the US dollar), thereby de-risking many of its investee institutions and their clients from currency fluctuations. For our financial inclusion investment strategy, this impact is about providing access to finance to those traditionally excluded and building robust, sustainable and professional financial institutions. This investment aligns with the following UN SDGs: Impact investors can help to create resilient, inclusive and sustainable economies and societies better equipped to navigate the changes induced by megatrends such as globalisation, digitalisation and demographic shifts. … Advance financial inclusion globally by expanding quality financial services. Last week the impact investing community descended on Barranquilla, Colombia to advance the cause of financial inclusion in Latin America and the Caribbean at the annual FOROMIC (Microfinance and SME Forum). Emerging markets: investing in financial inclusion | ASI; Financial Advisors and Investors. Financial Inclusion. An inclusive financial system, where all members of society have access to financial services, is essential for shared prosperity and inclusive growth. It is broadly recognized as an important tool for reducing poverty and achieving inclusive economic growth. Kenya, Chavchavadze Ave. 29 Why impact investing is part of the solution. The distribution of this article does not constitute an offer or solicitation. This attractive risk-return-impact relationship is helping to increase private-sector investment in this newly consolidating industry and to further reinforce financial deepening in many economies. Information given in this document has been obtained from, or based upon, sources believed by us to be reliable and accurate although M&G does not accept liability for the accuracy of the contents. Building on this approach as well as the GIIN’s decade of experience standardizing impact metrics and establishing the IRIS+ system, this new installment of reports – Understanding Impact Performance: Agriculture Investments and Understanding Impact Performance: Financial Inclusion – mark the significant progress being made by the GIIN towards standardizing impact performance … Financial services are key to achieving progress and growth. Investment impact overview: With an average underlying loan size of $1,730, our investment in MEF will support lending to around 52,000 micro and small entrepreneurs in developing countries. Switzerland, Rue du Commerce 9 The impact of this will no … At BlueOrchard, we focus on creating jobs, creating opportunities for women entrepreneurs and alleviating both poverty and its root causes. The MFIs provide a variety of services to support development activity, including unsecured credit, insurance, housing loans, deposits and savings. A platform that gives impetus to meaningful news in the fields of HEALTH TECHNOLOGIES, IMPACT INVESTING AND FINANCIAL INCLUSION. 1637 Luxembourg Improved Financial Resilience. Many of these funds are focused on promoting financial inclusion, with an increasing emphasis on fintech companies that provide products and services to microcredit and SME finance driven by algorithmic underwriting and big data. This article reflects M&G’s present opinions reflecting current market conditions. Two reports from the Global Impact Investing Network provide evidence of impact in each sector. Impact investing in financial technology emerged as an extension of the broader trend of investing in financial inclusion. A demand-driven fund, the MEF has lent to over 230 MFIs across all developing regions since its inception. Nairobi According to the Global Impact Investing Network’s (GIIN) Annual Investor Survey 2018, after energy, microfinance and financial services (ex-microfinance) comprise the second and third-largest impact allocations (assets under management) by sector. 156 social enterprises have impacted over 96 million people in the ten-year period. For the RI Team browse the Team page. Over the past twenty years this incipient approach to microcredit has matured to become a rapidly consolidating global microfinance industry. Nonetheless, many micro-enterprises, small and medium-sized enterprises (SMEs) and individual borrowers have unmet financing needs. The financial inclusion industry is evolving. This sector is gradually shifting its focus from traditional lending models with larger proportion of newer investments. This sample of impact investments is associated with material progress in The family supports microfinance and other financial inclusion initiatives including Grameen America, the Robin Hood Foundation, and ACCION International that provide underserved communities with a range of opportunities to help build their own capacity, self-sufficiency and resilience. Center for Financial Inclusion Header Logo. The average financial inclusion investee, for example, provided first-time access to formal financial services to more than 136,000 individuals during a one-year period, according to an analysis of almost 800 financial inclusion investments from 46 investors since 2009. Office 201 Impact investing trends. Impact investing has been long associated with microfinance funds, which to date make up the majority of existing private debt impact funds. Sponsored Content. Moreover, around two-thirds of the loans made in 2018 were to borrowers in rural areas lacking access to conventional finance and therefore struggling to meet their financial goals. Increased Business Expansion. Although financial inclusion is a particularly acute issue in developing markets, access to affordable and responsible financial services, including credit, remains a key challenge for low-income and financially excluded groups in both developed and emerging economies. Follow us on Twitter Georgia, 8 Cross Street Increase in job Creation. The following example of an impact investment illustrates how our financing has been used to generate positive social impact in the area of microfinance and financial inclusion. Where do carbon emissions go when they’re no longer in your portfolio. Smart Investing; Innovation Realized ... Could government-to-person payments be the gateway to financial inclusion? The link between economic growth and social progress is complex, although most would agree that pursuing a more inclusive model of economic growth that benefits all segments of society is essential to creating a sustainable future. Switzerland, 1, rue Goethe The impact we are interested in – for each of our investment strategies - is the effect of our activities on society and the environment. Connect with us on LinkedIn The activities of the MEF and its partner institutions have a strong developmental profile with 80% of borrowers being women, many of whom are heads of household. Impact investing has come a long way over the last 10 years in the country, making measurable contributions to the development sector — touching over 490 … Issued by M&G Investment Management Limited (unless stated otherwise), registered in England and Wales under number 936683 with its registered office at 10 Fenchurch Avenue, London EC3M 5AG. San Isidro, Lima The MEF was established by IFC (the private-sector arm of the World Bank Group), KfW (the German development bank) and OeEB (the Austrian development bank) to provide short and medium-term debt to MFIs, which in turn offer loans to thousands of micro and small entrepreneurs in developing countries to support economic development and help break the cycle of poverty. Manulife Tower #28-01 For our latest insights on impact investing and to learn more about our approach: www.mandg.com/impactinvesting. Caveat Venditor: A New Model for Buyer Selection in Responsible Microfinance Equity Exits. Tag: financial inclusion. Sign up to receive the Impactivate ® newsletter via email. KKR has sped past the $1bn target on its premier impact investing fund, thanks largely to demand from wealthy retail investors. Improved Productivity. 1204 Geneva The go-to source for impact investing news and trends. There is an increasing diversity of inclusive finance providers and investors, from commercial banks to fintech companies. Our investments have reached over 39 million micro-entrepreneurs in emerging and frontier markets as of December 2018. Improved day to day Financial Management. Financial services have a major role to play in the activities of individuals and the economy as a whole. Responsible Investor is published by Response Global Media Limited (Company No: 6123092); an independent UK publishing company. Top 10 Impact Investing Trends for 2020. It has been written for informational and educational purposes only and should not be considered as investment advice or as a recommendation of any security, strategy or investment product. Follow us on Facebook Early efforts aimed at promoting financial inclusion were initiated by NGOs and development finance institutions which would often lend with the objective of social benefit while allowing financial returns to remain a secondary consideration. ... group-lending model is a tried-and-tested way to make use of development capital and public markets to make a positive impact. Microfinance Enhancement Facility (MEF) – helping to create a cycle of positive change. We seek to invest in and structure innovative investment solutions that can offer attractive returns and mitigate risks for our clients while generating a measurable social or environmental impact. Peru, 9th Floor – Unit 22, Pine Tree Plaza, Kaburu Drive, off Ngong Rd Key Takeaway: We enter the new decade full of promise for innovation and discoveries in healthcare, financial services and clean energy. We explain below how impact investments that promote financial inclusion can help to foster economic growth and build sustainable economies and societies. The series explores recent efforts to synthesize evidence on the impact of financial inclusion and examines whether concepts like usage, financial health and poverty reduction capture the real impact of financial inclusion. Visit the Contact page to get in touch. Inclusive finance is helping to bridge this gap. They are subject to change without notice and involve a number of assumptions which may not prove valid. Impact investments provide capital to address social and/or environmental issues. Adequately designed financial products and services, operational efficiencies bred of increasingly sophisticated IT systems, and an understanding that social impact may be achieved without sacrificing risk-adjusted financial returns are now the norm. Indonesian Coal Miners ESG Outlook | Market Forces, Salone Dello SRI | PIANETA ESG - Finance faces a new world, RI Digital: Canada 2020 (September 15-16), RI Digital Festival: Summer 2020 (June 15-19), Croatan Institute April 2020 Croatan Forum, 3rd Latin American Symposium on Climate Change Adaptation, Chatham House | Responsible Business 2020, Careers in Responsible Investing and Sustainable Finance, Data rich: why having granular ESG data matters, People & Appointments: Faith Ward to Chair IIGCC, SEC appoints investor advisory committee. Further, in developing countries 80% of the most economically-disadvantaged individuals do not have bank accounts[2] – with much of the unbanked population consisting of women and poor households in rural areas. The basic premise of an ‘inclusive economy’ is that more opportunities are made available for more people – that an increasingly wide cross-section of society has access to the labour market, financial services and economic opportunity, regardless of their gender, race or ethnicity, age, family background, sexual orientation or socio-economic circumstance. This impact report presents our broad impact scope as an investor in financial inclusion in a context of stories and numbers. Today, 1.7 billion adults remain unbanked and have no access to credit, savings accounts, insurance or related financial services. This is often because they have limited or no access to basic financial products and services, or because the products and services to which they do have access are not adequately structured with respect to the prospective client’s repayment capacity. Increased Agricultural Output. Increased Benefits for Family. Read about BlueOrchard’s impact, the BlueOrchard Microfinance Fund and access our latest Impact Report here. Around 1.7 billion people worldwide cannot access traditional bank finance and are classified as ‘unbanked’[1]. Access to financial services and the use of financial services are not the same when examined in the context of financial inclusion because some people may have the financial services available to them and they can indeed patronize the financial service providers. Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". Based in Washington, D.C., Ehrbeck is responsible for teams that are advancing empowerment in the areas of financial inclusion, impact investing, and property rights. Lauren Burnhill joins Emerald Peak Private Equity as managing partner…Jarrett Barrios of California Community Foundation and Gabriella Morris of World Food Program USA join the Nathan Cummings Foundation’s board of trustees… UpMetrics is hiring a director of impact investing…OpenInvest is looking for a content marketing specialist in San Francisco. Singapore 048424, InsuResilience Investment Fund (IIF) launches new report on climate insurance in developing countries, Protecting low-income communities through climate insurance. Can sustainability reporting reduce financing costs? Reference in this document to individual companies is included solely for the purpose of illustration and should not be construed as a recommendation to buy or sell the same. Investing in financial inclusion and shared prosperity. Early efforts aimed at promoting financial inclusion were initiated by NGOs and development finance institutions which would often lend with the objective of social benefit while allowing financial returns to remain a secondary consideration. Inclusive finance is helping to bridge this gap. Past performance is not a guide to future performance. Social Impact. Access to such services unleashes the potential of entrepreneurs, many of whom are the most socially and economically vulnerable, and helps to break cycles of poverty and oppression, empowering individuals, families and communities. M&G Investment Management Limited is authorised and regulated by the Financial Conduct Authority. The Regional Education Finance Fund for Africa (REFFA) 2019 Annual Impact Report, InsuResilience Global Partnership Annual Forum, BlueOrchard Market Update: Emerging Markets Impact Investing Q3 2020, BlueOrchard Virtual Event ‘Outlook 2021 – Impact Investing in the APAC Region’, BlueOrchard announces the launch of a Covid-19 support fund that aims to support more than 200 million jobs in emerging and frontier markets. An inclusive financial system, where all members of society have access to financial services, is essential for shared prosperity and inclusive growth. Financial inclusion fosters entrepreneurship and job creation, and gives individuals the tools to improve their livelihoods on a plethora of levels – financial security, health, education, and more. You are currently browsing the tag archive for the ‘Impact Investing’ tag. [1] “The Global Findex Database 2017”, World Bank Group. [2] “PIIF Report on Progress 2016 – assessing the impact of responsible investors in Inclusive finance”, Principles for Investors in Inclusive Finance. The group-lending model is a tried-and-tested way to make use of development capital and public markets to make a positive impact. At the same time, for many of the impact investing vehicles created in the last decade, their investment horizons are coming to a close. Over time, Accion has helped develop 65 microfinance institutions in 32 countries across four continents. Achieving financial inclusion is not an end in itself, but a means to an end. It may also be an attractive source of returns for investors. About Improved Working Conditions. At M&G we invest in private and illiquid fixed income assets across twelve thematic impact areas that offer clear positive environmental or social outcomes as well as attractive financial returns. The provision of small loans to the poor to float micro-businesses rose in popularity in the early 1990s and 2000s for a reason more substantial than it's … The services and products provided by M&G Investment Management Limited are available only to investors who come within the category of the Professional Client as defined in the Financial Conduct Authority’s Handbook. Business Impact. Introducing SMU Impact Investing’s final high impact sector of focus - Financial Inclusion. Economic. financial inclusion, fintech, impact investing, microcredit, microfinance, research, social impact Latest Posts Tuesday November 24, 2020 Making Bank Accounts Work for Women: Lessons on Designing Gender-Centric Financial Services the impact investing industry. Skip to content. It gives a flavour of how bringing people into the financial system spurs social and economic development and contributes to achieving many of the Sustainable Development Goals. Luxembourg, Calle German Schreiber 184 The city of Barranquilla, humid as its people are warm, hugs the Magdalena River a few hours north of Cartagena on the Caribbean Sea. This concept is based on a new approach to impact measurement pioneered by the Pacific Financial Inclusion Programme (PFIP) with conceptual and technical support from our financial inclusion advisory firm, BFA.PFIP is a United Nations Capital Development Fund program dedicated to reaching low-income Pacific Islanders with useful formal financial services and supported by the Foreign … This article was written by Richard Sherry, Fund Manager, M&G Investment Management. Financial inclusion has been demonstrated to stimulate economic and social development and to move society toward a range of UN Sustainable Development Goals (UN SDGs). Try: Financial Technology, Sub-Saharan Africa, Case Study. As the partner directing these areas, he oversees Omidyar Network’s investment relationships with a number of private and public sector organizations around the globe. ... raise awareness and advance financial inclusion, microfinance and impact investing … Impact Investments into Financial Services have grown at 19% CAGR and account for 50% of total capital deployed in impact investing over the last decade. Jul 9, 2020 | Financial Inclusion, Impact Investing, SME Financing, … This is achieved by providing access to affordable and responsible financial products and services that people need. That said, the impact fund universe now includes funds engaged in activities other than pure microfinance. Dec 11th, 2020 0179 Tbilisi Financial Inclusion during the Pandemic and Beyond: Lessons from a Resilient Region. It may also be an attractive source of returns for investors. 56% of them are women, and 59% of these women do not participate in their country’s labour force. Increased Agricultural Input. Follow us on Instagram, Seefeldstrasse 233 This post is part of CGAP's "Evidence and Impact in Financial Inclusion: Taking Stock" blog series. We invest not only to promote financial inclusion by giving borrowers better access to affordable and appropriate financial services, but also to improve the lives and prospects of those borrowers as a result of the financing provided. See the About page for further information. This article was sponsored by M&G, and RI editorial staff were not involved in the creation of this content. Providing financing for companies that take this approach allows investors the opportunity to participate in increasing financial inclusion while earning competitive financial returns. The challenge of accessing affordable credit. Lastly, it is a market that is best suited to traditional impact investing organisations. The transaction finances a well-diversified pool of loans in terms of country and MFI entity exposure. Financial inclusion is about providing financial services to all members Why impact investing is part of the solution. Impact results among financial inclusion investments In total, 46 investors reported the impact results of 798 direct, annualized financial inclusion investments made in 85 countries, reflecting performance between 2009 and 2019. 8008 Zurich 6th Floor About 4 billion adults reported no formal savings and almost 5 billion claimed no formal borrowing, according to the World Bank. Impact investing and particularly investments in microfinance foster inclusive growth and development by providing micro entrepreneurs with capital and other services to support income-generating activities. Financial Inclusion Sarah Brodsky | 6 months ago As Social Economic Mobility Declines, Investors Seek to Expand Opportunity. Daria Solovieva-January 2, 2020. Years this incipient approach to microcredit has matured to become a rapidly consolidating microfinance! 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