MICROFINANCE PUBLICATION ROUND-UP: Role of Impact Investing in Achieving UN Sustainable Development Goals; Microfinance Investment Vehicle Survey; Lessons from Tanzania’s Digitization Efforts

“Achieving The Sustainable Development Goals: The Role of Impact Investing;” published by The Global Impact Investing Network; September 12, 2016; 9 pages; available at https://thegiin.org/knowledge/publication/sdgs-impinv

This report profiles impact investors that have leveraged the United Nations (UN) Sustainable Development Goals (SDGs) for the following purposes: (1) as a framework to communicate their social impact goals; (2) to develop new or realign existing investment strategies and; (3) to attract capital from private investors that are new to impact investing. Encourage Capital, an emerging-market “impact” investment firm managing assets worth USD 255 million, used the SDGs to help explain its impact objectives to stakeholders. Its investment in India’s Ujjivan Microfinance aligned with SDG #1: no poverty; SDG #5: gender equality; and SDG #16: peace, justice and strong institutions. Pension fund PGGM has mapped its investment strategies and impact measurement metrics to six SDGs as part of its investment selection and tracking process. RobecoSAM, an investment firm managing conventional and impact investments valued at USD 10 billion, argues that though aligning impact goals to SDGs may lead to growth in investment capital, investors should not lose other financially viable options. The author concludes with the example of how Triodos Investment Management, which has USD 2.2 billion in impact funds under management, is planning to use the SDGs to select investments, recruit investors and report performance for its new organic agriculture and trade fund [1].

“2016 Symbiotics MIV Survey: A study of Global Microfinance Investment Funds;” published by Symbiotics Group; September 12, 2016; 54 pages; available at http://symbioticsgroup.com/news/new-symbiotics-2016-miv-survey/

The Symbiotics Microfinance Investment Vehicle (MIV) Survey offers information on funding activity in emerging markets from 93 participants with a combined market size of USD 11 billion, representing an estimated 95 percent of the MIV market. Forty-one percent of these assets are concentrated in five funds.

During 2015, the amount of assets held by the participating MIVs increased by 6.4 percent, compared with a growth rate of 4.9 percent during 2014. The projected growth rate for MIVs that will remain active in 2016 is 8.2 percent.

The proportion of investments in Eastern Europe and Central Asia decreased from 38 percent in 2014 to 30 percent in 2015, which the authors attribute to the economic downturn in Russia and nearby countries. The exposure in South Asian countries increased by 6 percent, with India receiving the largest share, partially due to an “improved regulatory environment.” Cambodia and Ecuador received the next largest shares of MIV funding. Forty-seven percent of the total funds were financed by institutional investors, while public funders contributed another 26 percent.

This edition of the survey incorporated a new section on how MIVs evaluate social performance. “Increased access to financial services”, “employment generation” and “improving livelihood of clients” were the top social goals cited. Sixty-eight percent of the clients financed by the MIVs’ investees were women, and more than 50 percent of all clients were located in rural areas [2].

“Person-to-Government Payments: Lessons from Tanzania’s Digitization Efforts;” by Rashmi Pillai; published by The Better Than Cash Alliance; September 20, 2016; 72 pages; available at https://www.betterthancash.org/tools-research/case-studies/person-to-government-payments-lessons-from-tanzanias-digitization-efforts

The author of this paper discusses the benefits and limitations in digitizing person-to-government (P2G) and business-to-government (B2G) payments in Tanzania. The analysis of the electronic collection of motor vehicle license fees, customs clearance costs and tourism-related fees indicates gains were made in revenue and tax collection while processing times, fraud and losses were reduced. The introduction of new payment systems like prepaid cards have increased the trust of customers using digital payments, but the majority of the micro- and small business owners surveyed were not aware of the services available. Ms Pillai’s recommendations include improved backend technology, accepting electronic receipts during audits, and enabling remote sales tax estimation services by the Tanzanian Revenue Authority. The author concludes by stating that the successful implementation of digital payment systems would lead to an increase in tax revenues of USD 477 million per annum [3].

By Sharanya Madhavan, Research Associate

Sources and Additional Information

[1] Global Impact Investing Network: https://thegiin.org/knowledge/publication/sdgs-impinv

[2] Symbiotics Group: http://symbioticsgroup.com/news/new-symbiotics-2016-miv-survey/

[3] Better Than Cash Alliance: https://www.betterthancash.org/tools-research/case-studies/person-to-government-payments-lessons-from-tanzanias-digitization-efforts

MicroCapital Universe: Global Impact Investing Network

MicroCapital Universe: Triodos Investment Management

MicroCapital Universe: Symbiotics Group

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