Investment approach

Introduction

An estimated 2.0 billion people have no access to formal financial services. They are unable to open a bank account, negotiate a loan to start a business or buy insurance. Having access to these financial services has a fundamental impact on the lives of millions of people. It enables them to build their assets gradually, develop micro, small and medium-sized enterprises and improve their income earning capacity, create employment and provide a financial cushion for the future.

Inclusive finance fills this gap, offering services including savings, credit, payment facilities and insurance to low-income people. It offers a lifeline to millions of people, enabling them to better manage their daily life, cope with unexpected difficulties, pursue aspirations and plan for the future. While the services and products vary, microfinance institutions typically provide small loans to low-income people for short periods of time and increasingly offer savings, payment services and insurance products. Inclusive finance helps families and entrepreneurs to generate income, manage their cash flow, build assets and strengthen their resilience to setbacks. Research shows that over 70% of beneficiaries of financial inclusion are women, making it an important instrument in the empowerment of women.1

In the end, inclusive finance helps local economies to thrive by supporting enterprise and creating jobs. And its wider impact can go much further, leading to other than economic improvements, from clean water, food security and healthcare to education and the status of women in society.

1 Source: EY: Empowering women: uncovering financial inclusion barriers, 2015

Mission

Triodos Microfinance Fund, established in 2009 as a sub-fund of Triodos SICAV II, enables investors to actively contribute to the development of the microfinance sector into an inclusive financial sector in which the majority of people have access to financial services. The fund provides loans and equity to microfinance institutions and banks that have a sustainable approach toward providing financial services to those traditionally excluded. As an investor it wishes to contribute to the development of a sustainable financial sector in developing countries based on fair pricing, transparency, access for all and care for the earth.

Triodos Microfinance Fund is an initiative of Triodos Investment Management, a wholly-owned subsidiary of Triodos Bank. Triodos Investment Management started investing in developing countries in 1994 because it recognised that sustainable development, and addressing poverty issues in particular, was a global issue. Since 1994, assets under management in the microfinance sector of Triodos Investment Management have increased to almost EUR 750 million, making Triodos Investment Management one of the leading investors in the industry.

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