During the exit process, the fitness and compatibility of a potential new partner for our portfolio clients is taken seriously. Factors taken into consideration include but are not limited to:

• reputation in the market
• stability of leadership
• sector experience
• commitment to social performance
• rationale for investment
• cultural fit.

Watch our video on the responsible exit from AMK, Cambodia

Read about our responsible exit from AMK, Cambodia

Once Incofin decides to invest in an institution, output  indicators at the level of the end clients are tracked throughout the life of the investment, showing Incofin’s commitment to measure the outcome of its investmentat both fund and investee level.

Some of the areas measured and tracked include but are not limited to:

• New customers obtaining access to financial products
• Additional credit to smallholder farmers and SMEs
• Increase in agricultural production
• Employment of females in the workforce
• Training and delivery of programs.

Indicators are specific to each fund and in the case of equity investments, investees also. The indicators identified include those that not only promote SPM practices but also impact to the end customer.

The social, environmental performancemanagement of the institution is assessed and monitored via 4 tools, of which 2 have been developed in house:

1. Agriculture POs: ECHOS-AgPO© (Incofin)
2. Agriculture SMEs: ECHOS-AgSME© (Incofin)
3. Microfinance: SPI4-Alinus (Cerise)
4. Other Sectors: Social Business Scorecard (Cerise).

Each tool has a minimum cut-off score, showing our commitment to promoting responsible and impactful businesses only.

Incofin has a strong history of leading efforts in social audits:

• 2006: Incofin develops one of the first social & environmental performance audit tools for due diligence, for the microfinance sector
• 2010: Incofin is a founding member of the Social Performance Taskforce and co-chairs social investor working group
• 2011: Incofin endorsed the Principles for Responsible Investment (PRI)
• 2012: Incofin develops social & environmental performance audit tools for agriculture sector
• 2012: Incofin contributes to the development of the Universal Standards for social performance
• 2013: Incofin leads the social investor efforts for the development of an investor friendly version of SPI4 (SPI4-Alinus)
• 2014: Incofin is re-elected to co-chair the social investor working group within the Social Performance Taskforce
• 2015: Incofin includes proactive implementation of Client Protection Principles as an undertaking in all loan agreements
• 2017: Enhanced Incofin internal social & environmental performance audit tools to be aligned to the UN SDGs

Just as the investment thesis is unique to each Incofin fund, so is the impact thesis. A fund-specific impact thesis is designed to provide:

• clarity on assessing whether the potential investment has social impact
• transparency between the Investment Manager and Investment Committee
• ease of application via a pre-defined impact thesis framework.

Each unique fund-specific impact thesis assesses:

• INTENT … for genuine impact and alignment to good SPM practices
• WHO … is targeted as the end customer
• WHAT … benefits the services provide
• HOW … the investee provides its services.