Microfinance Investment Vehicles Setting Green Targets; Looking to Asian, Latin American MFIs to Deploy Environment-focused Microloans
MicroCapital reports from the EMW 2016 session 'Investing in green inclusive finance: Challenges, opportunities, strategies, the way forward':
During one of Friday's sessions of European Microfinance Week, Hatem Mahbouli, an investment officer with Dutch development bank Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), described his institution's plans to direct 20 percent of its investments each year to environmental efforts. FMO, which reports the equivalent of USD 9 billion in total assets, has about USD 120 million invested in the "green" sub-sector to date. To move further toward its goal, FMO is looking particularly to Asia and Latin America. Hoa Le, representing Switzerland-based "impact" investor BlueOrchard Finance argued that dedicated green funds are critical. However, there are markets such as "Africa, where there is too much low-interest and donated liquidity, so the return is often insufficient to balance the risks and expectations of commercial investors."
Sonja Ooms, the manager of programs, social performance and the environment for Dutch social investor Oikocredit, explained how working toward goals for an organization's internal footprint can lead to success in meeting its external green targets. Since 2012, Oikocredit has had an environmental policy including elements such as monitoring its direct environmental impact, looking actively for green investees and helping its investees plan for natural disasters. She explained that Oikocredit has also encouraged MFIs to reduce their own environmental impacts. In Costa Rica, Oikocredit arranged a open-ended meeting for MFIs, scientists and product providers. Her experience was that "if you bring together the right group of people, it takes care of itself. From that lunch, there was a lot of spinoff of businesses talking together... It started out with us helping MFIs to become carbon neutral."