MICROFINANCE PUBLICATION ROUND-UP: GIIN Impact Investor Survey; Financial Inclusion in Humanitarian Emergencies; Green Index 2.0

“Annual Impact Investor Survey 2017, The Seventh Edition;” by Abhilash Mudaliar, Hannah Schiff, Rachel Bass, Hannah Dithrich; published by the Global Impact Investing Network (GIIN), May 2017, 84 pages, available at https://thegiin.org/knowledge/publication/annualsurvey2017

The authors of this paper discuss the results of primary and secondary research on the latest trends and challenges of the impact investment sector, which they define as investments that “target social and / or environmental impact objectives”[1]. The results of the report were largely drawn from a survey of 209 impact investors. The authors present the perspectives of investors, analysis and performance of investments, and methods of impact measurement.

The survey respondents manage USD 114 billion in impact investments. During 2016, they completed 8,000 transactions worth USD 22.1 billion. These investors are aiming to increase both the investment volumes and number of transactions in 2017. Respondents also disclosed information about asset classes, instruments, geographic concentration, stages of business and sources of capital with regard to their impact investment portfolios.

Despite overall growth and maturity in the sector reported by the researchers, many respondents noted that the availability of capital and exit opportunities remained challenging. Ninety-eight percent of survey participants reported meeting or exceeding expectations with regard to impact of their investments, while 91 percent reported satisfaction with financial performance of their portfolios. While survey participants welcomed the entry of large firms to the market, they expressed concern about potential “mission drift” or “impact dilution”[1].

“The Role of Financial Services in Humanitarian Crises;” by Mayada El-Zoghbi, Nadine Chehade, Peter McConaghy and Matthew Soursourian; published by CGAP (Consultative Group to Assist the Poor), State and Peace-Building Fund, and The World Bank Group, April 2017, 48 pages, available at http://www.cgap.org/sites/default/files/Forum-The-Role-of-Financial-Services-in-Humanitarian-Crises_1.pdf

The authors state that 65 million individuals were displaced by conflict and natural disaster during 2016, and 75 percent of adults in these humanitarian emergencies do not have access to formal financial services. They argue that providing financial products including savings, remittances, credit and insurance to refugees and residents in areas impacted by humanitarian emergencies can help them “mitigate shocks, build up assets and promote local economic development”[2]. The authors suggest that remittances result in microeconomic and community-level economic activity, savings provide “a form of self-insurance,”[2] and insurance provides financial support mostly after natural disasters.

The authors offer solutions for financial interventions such as providing digital payments as opposed to emergency cash transfers. They also recommend investing in preparedness, addressing liquidity constraints, working to understand client needs, responding in a timely manner and promoting awareness of formal services.

“The Green Index 2.0, An innovative tool to assess environmental performance in the microfinance sector;” by Marion Allet, Geert Jan Schuite, Davide Forcella and Raluca Dumitrescu;” published by the European Microfinance Platform (e-MFP) Microfinance and Environment Action Group; October 2016; 12 pages; available at http://www.e-mfp.eu/sites/default/files/resources/2016/10/Green_Index_2016_final_web.pdf

The Green Index, which was originally released in 2014, is intended to help organizations evaluate the environmental performance of microfinance institutions (MFIs). Users are encouraged to “reflect… on environmental responsibility,” incorporate “green indicators in microfinance performance assessment tools,” and “have a pedagogical approach”[3]. This update of the index is intended to enhance environmental responsibility in the sector by helping practitioners design environmental strategies as well as assess, compare, track progress and communicate the environmental performance of organizations.

By Alíz Crowley, Research Associate

Sources and Additional Information:

[1] GIIN (Global Impact Investing Network), Annual Impact Investor Survey 2017

[2] CGAP (Consultative Group to Assist the Poor), The Role of Financial Services in Humanitarian Crises

[3] e-MFP Microfinance and Environment Action Group, The Green Index 2.0

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