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Author: MicroCapital team

MicroCapital: How is it different evaluating lenders to SMEs versus microlenders?
Lucia Spaggiari: One difference is the language used. For instance, SME lenders speak of “sustainable performance” more than “social performance.” Beyond language, a key difference is scale. By definition, SME lending requires a larger balance sheet, and this means complying with prudential regulation and attracting investors expecting to earn (at least) market returns.

Laura Foose: Based on investor demand expressed at the European Microfinance Platform (e-MFP) Investor Action Group meeting at European Microfinance Week 2016 and the March 2017 Social Performance Task Force (SPTF) Social Investors Working Group, we have been exploring how best to evaluate the environmental and social performance of SME finance institutions. We began by mapping the ESG frameworks of four development finance institutions (DFIs) and then surveyed our member microfinance investment vehicles to learn what indicators were most important to them. The high quality of the DFIs’ tools was very helpful in designing an evaluation framework that is feasible for our member funds’ smaller investments.

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Author: Sam Mendelson

Back in May, and only a few weeks after the release of the 2017 Global Findex, the World Bank launched the 2018 SDG Atlas. Perhaps less well known than the Findex, the Atlas of Sustainable Development Goals is an even more massive endeavour, drawing on the Bank’s World Development Indicators (WDIs), a database of over 1,400 indicators for more than 220 economies, many going back over 50 years. The ‘SDG’s in the title are of course the Sustainable Development Goals - the post-2015 follow up to the Millennium Development Goals that served as the target-based development architecture for the past decade or so. The SDGs provide a variety of targets across different areas of human development to be achieved by 2030. This is the UN General Assembly-adopted “2030 Agenda for Sustainable Development”, which extends the MDGs but also makes key adjustments, incentivising collective action by all countries.