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. 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). 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 … Inclusive finance is helping to bridge this gap. 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. 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. 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. Why Financial Inclusion? 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. This sample of impact investments is associated with material progress in The impact we are interested in – for each of our investment strategies - is the effect of our activities on society and the environment. Improved Productivity. The challenge of accessing affordable credit. 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. It is broadly recognized as an important tool for reducing poverty and achieving inclusive economic growth. Achieving financial inclusion is not an end in itself, but a means to an end. A demand-driven fund, the MEF has lent to over 230 MFIs across all developing regions since its inception. 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. 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. 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. This post is part of CGAP's "Evidence and Impact in Financial Inclusion: Taking Stock" blog series. The MFIs provide a variety of services to support development activity, including unsecured credit, insurance, housing loans, deposits and savings. Where do carbon emissions go when they’re no longer in your portfolio. Financial services are key to achieving progress and growth. ... group-lending model is a tried-and-tested way to make use of development capital and public markets to make a positive impact. 0179 Tbilisi 8008 Zurich 1204 Geneva 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. [2] “PIIF Report on Progress 2016 – assessing the impact of responsible investors in Inclusive finance”, Principles for Investors in Inclusive Finance. This impact report presents our broad impact scope as an investor in financial inclusion in a context of stories and numbers. 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. Improved day to day Financial Management. Dec 11th, 2020 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. Around 1.7 billion people worldwide cannot access traditional bank finance and are classified as ‘unbanked’[1]. This article reflects M&G’s present opinions reflecting current market conditions. A platform that gives impetus to meaningful news in the fields of HEALTH TECHNOLOGIES, IMPACT INVESTING AND FINANCIAL INCLUSION. [1] “The Global Findex Database 2017”, World Bank Group. Providing financing for companies that take this approach allows investors the opportunity to participate in increasing financial inclusion while earning competitive financial returns. 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. The transaction finances a well-diversified pool of loans in terms of country and MFI entity exposure. 6th Floor 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. Key Takeaway: We enter the new decade full of promise for innovation and discoveries in healthcare, financial services and clean energy. Follow us on Facebook Daria Solovieva-January 2, 2020. Agents of Impact: Follow the Talent. For the RI Team browse the Team page. Impact investments provide capital to address social and/or environmental issues. This article was sponsored by M&G, and RI editorial staff were not involved in the creation of this content. Introducing SMU Impact Investing’s final high impact sector of focus - Financial Inclusion. 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 … Over time, Accion has helped develop 65 microfinance institutions in 32 countries across four continents. 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. Improved Financial Resilience. Increased Agricultural Input. 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. 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. Past performance is not a guide to future performance. Follow us on Instagram, Seefeldstrasse 233 Increased Benefits for Family. Advance financial inclusion globally by expanding quality financial services. Financial Inclusion during the Pandemic and Beyond: Lessons from a Resilient Region. San Isidro, Lima 1637 Luxembourg It may also be an attractive source of returns for investors. M&G Investment Management Limited is authorised and regulated by the Financial Conduct Authority. 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. 56% of them are women, and 59% of these women do not participate in their country’s labour force. Economic. Can sustainability reporting reduce financing costs? KKR has sped past the $1bn target on its premier impact investing fund, thanks largely to demand from wealthy retail investors. At BlueOrchard, we focus on creating jobs, creating opportunities for women entrepreneurs and alleviating both poverty and its root causes. 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". 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. Peru, 9th Floor – Unit 22, Pine Tree Plaza, Kaburu Drive, off Ngong Rd An inclusive financial system, where all members of society have access to financial services, is essential for shared prosperity and inclusive growth. 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. Responsible Investor is published by Response Global Media Limited (Company No: 6123092); an independent UK publishing company. Why impact investing is part of the solution. Financial inclusion is about providing financial services to all members Luxembourg, Calle German Schreiber 184 Increased Business Expansion. 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. Follow us on Twitter Visit the Contact page to get in touch. Smart Investing; Innovation Realized ... Could government-to-person payments be the gateway to financial inclusion? Over the past twenty years this incipient approach to microcredit has matured to become a rapidly consolidating global microfinance industry. The impact of this will no … 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. Impact investing has been long associated with microfinance funds, which to date make up the majority of existing private debt impact funds. 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. Top 10 Impact Investing Trends for 2020. Switzerland, 1, rue Goethe Emerging markets: investing in financial inclusion | ASI; Financial Advisors and Investors. Switzerland, Rue du Commerce 9 Read about BlueOrchard’s impact, the BlueOrchard Microfinance Fund and access our latest Impact Report here. Caveat Venditor: A New Model for Buyer Selection in Responsible Microfinance Equity Exits. 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. An inclusive financial system, where all members of society have access to financial services, is essential for shared prosperity and inclusive growth. Improved Working Conditions. 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. 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