Tag: financial inclusion

IMPACT ON CLIMATE

We like to share examples on how financial inclusion can advance climate-smart solutions and drive inclusive progress. A series of impactful projects of all shapes and sizes in emerging countries that address climate change, and help people adapt to and be more resilient to climate hazards. We at Incofin hope these stories of entrepreneurs, of financial institutions, of cooperatives, of impact organisations around the world can inspire how impact investors can contribute to a sustainable transition to a climate resilient economy.

Climate change is now. We must ensure that the most susceptible to the impacts of climate change – who are often already among the most vulnerable – are not left behind. Climate change is as much an environmental challenge as it is one of livelihood and social justice. Low-income communities (not the least women in those communities) are on the frontline of the dire effects of climate change. With the proper financial and technical solutions they are able to adapt, build resilience and mitigate climate change. Financial inclusion is well positioned to play a key role in empowering low-income vulnerable populations to adapt to climate change.

It brings us this time to Banco Pichincha in Ecuador, and especially to Maria. Enjoy her story.

 

Watch here the example of Mufin Green in India:

 

28/09/2023

Incofin invests EUR 2 million in PEBCo-Bethesda in Benin. The funding comes from the Agricultural Liquidity Fund (ALF) and is a testament to Incofin’s dedication to advancing sustainable agriculture and climate resilience through financial inclusion. This resonates deeply with Benin, a country where agriculture sustains livelihoods and contributes 30% to GDP.

With more than 70% of its population relying on agriculture, the importance in Benin of agriculture cannot be overstated. Established in 1996, microfinance institution PEBCo Bethesda Benin has emerged as a catalyst for change, with a core mission to empower low-income communities, particularly women, in this agrarian landscape.

It facilitates farmers to purchase seeds and other inputs and supports the necessary investments to ensure revenue generation. This approach not only enhances the financial prospects of individuals but also contributes to the broader economic development of the populations it serves.

 

Comprehensive financial services

PEBCo’s efforts encompass a range of financial and non-financial services, including savings, agricultural loans, education loans and green loans for the acquisition of solar panels, among others.

 

Confronting climate challenges

However, Benin, like many other countries, grapples with the adverse effects of climate change. In recent years, unpredictable and erratic weather patterns, marked by floods and droughts, have cast a long shadow over the agricultural sector in Benin. It has not only imperiled food security but also jeopardized the livelihoods of countless individuals.

PEBCo has enlisted the expertise of an agricultural specialist to assist the MFI and its client sin adapting to and mitigating climate risks. This proactive approach underscores its commitment to safeguarding the interests of its borrowers and promoting sustainable farming practices.

Incofin, committed to inclusive progress and sustainable agriculture

Incofin’s debt investment of EUR 2 million in PEBCo originates from the Agricultural Liquidity Fund. The fund seeks to support actors in the sustainable agrifood value chain. This investment reaffirms Incofin’s commitment to fostering agriculture in Africa and the belief in PEBCo’s pivotal role in this endeavor.

 

25/09/2023

IMPACT ON CLIMATE

Through the #ImpactOnClimate-series, Incofin shares examples on how financial inclusion can advance climate-smart solutions and drive inclusive progress. A series of impactful projects of all shapes and sizes in emerging countries that address climate change, and help people adapt to and be more resilient to climate hazards. We at Incofin hope these stories of entrepreneurs, of financial institutions, of cooperatives, of impact organisations around the world can inspire how impact investors can contribute to a sustainable transition to a climate resilient economy.

Climate change is now. We must ensure that the most susceptible to the impacts of climate change – who are often already among the most vulnerable – are not left behind. Climate change is as much an environmental challenge as it is one of livelihood and social justice. Low-income communities (not the least women in those communities) are on the frontline of the dire effects of climate change. With the proper financial and technical solutions they are able to adapt, build resilience and mitigate climate change. Financial inclusion is well positioned to play a key role in empowering low-income vulnerable populations to adapt to climate change.

In this first episode, we take you to India and introduce you to Mufin Green Finance, pioneer in climate financing solutions in India.

The company’s mission is not only to bring about an environmental transformation, but also to create a positive social impact in India (financial inclusion and climate sustainability).

Mufin Green is a leading provider of loans for income generation through electric vehicles (EV), charging infrastructure and swappable batteries. By propelling the electrification of the transport sector in India, Mufin Green has managed to reduce over 100,000 tonnes of CO2 emissions since its inception in 2016. This has not only impacted the carbon footprint reduction, but has also resulted in financial inclusion, more income generation, and women empowerment.  

One of the e-rickshaw drivers supported by Mufin Green is Mustaqi Imad. She used to stay at home to take care of the household, but since her husband passed away, she had to look for a new source of income to take care of her four children. She knocked on Mufin’s door and today she is the proud owner and driver of an electric rickshaw. This activity generates a stable income for her and her family.

“I first drove a diesel rickshaw, but it became increasingly costly due to rising fuel prices. Moreover, it also made a lot  of noise and the driver’s seat would become uncomfortably hot, especially in summer with outside temperatures as high as 40 to 45 degrees. This e-rickshaw stays cool, doesn’t make much noise, and is a lot cheaper to use.”

In fact, by 2050, 215 million urban, low-income people will be exposed to average summer temperatures above 35°C. On the front line, India experienced record heat waves last summer, reaching over 49°C in some parts of the country.

Because of Mufin Green’s crucial role in boosting the importance of electric mobility in India while including more vulnerable populations, Incofin made an investment in the company through its India Progress Fund in 2022.

11/06/2023
Mufin Green Finance announces its Series A funding from the Incofin India Progress Fund. Incofin invested about USD 5.7 million to enhance financial inclusion in the sector of electrical vehicles in India. Founded in 2016, Mufin Green Finance is the first first of its kind, a non-banking company providing financial services to companies of electrical vehicles. In that way, Mufin has reduced over 100,000 tonnes of carbon footprints.

Delighted to partner with Incofin, Kapil Garg, Co-founder and Director of Mufin Green commented: “This funding has put us in the forefront of an organised electrical vehicles financing sector. We are planning to disburse income-generating loans worth INR 5,000 Cr [almost 620 million euro] in the next 5 years, which will result in an overall reduction of 4 million tonnes of carbon emissions.”

Aditya Bhandari, Partner and Co-Head Asia of Incofin is proud of Incofin’s investment in Mufin: “This investment clearly aligns with our vision of financial inclusion and climate efforts. Mufin thrives on its diversified business model and strong balance sheet structure. Given Mufin’s strategic tie-ups with electrical vehicles ecosystem players, we firmly believe that the company will play a crucial role in boosting the importance of electrical transport in India and create a positive economic and environmental impact.” 

As far as Mufin’s financing products go, it currently consists of electric 2, 3, and 4-wheelers, as well as other elements of the EV ecosystem, including chargers, charging stations, batteries and battery top up loans for its customers.

As per Rajat Goyal, Co-founder of Mufin Green Finance, the market of electrical vehicles is fast evolving and there is a strong push from various stakeholders: “The investment from Incofin is a solid validation on our climate focused financing mission. We are focused on catering to the underserved or low-income segment and create a meaningful social and climate impact.”

04/10/2022

Incofin Investment Management is investing a total of USD 6 million in the Indonesian fintech Amartha, a peer-to-peer platform that connects urban investors with thousands of entrepreneurial women on the countryside.

Indonesia is undergoing a digital revolution: by 2020, 67% of Indonesians had access to an internet-enabled cell phone. This percentage is expected to increase by another 20% by 2025. No wonder that Amartha is just one of the hundreds of fintechs in Indonesia, but it is the only peer-to-peer platform focused on microentrepreneurs in rural areas. Amartha connects lenders with women entrepreneurs from rural areas who have difficulty accessing capital sources due to limited collateral, fluctuations in income or lack of a credit history.

Amartha, was founded in 2010 as a classic microfinance institution focused on women entrepreneurs. Inspired by the booming of the new financial technologies in the region and by the growing appetite from investors in the cities to fund women entrepreneurs on the countryside, Amartha decided to change its business model in 2016.

Amartha provides group-based working capital loans, accompanied by training in financial literacy and entrepreneurship. The borrowers are well known and screened by Amartha. The fintech has 480 branches throughout the country (in Java, Sumatra and Sulawesi), allowing local staff to maintain a close relationship with the borrower-client.

Jairo Espejo, Investment Manager for Incofin, explains why Amartha caught Incofin’s eye: “Amartha’s business model encompasses the best of two worlds: that of Fintech and the Microfinance model. It leverages new technologies like Artificial Intelligence and Machine Learning to improve its financial products as well as create new services to the end-borrowers. This is combined with the strong expertise of the business managers in the field. ”

Business partners and regional managers oversee loan origination and assess credit risk in the field, supplemented by insights coming from technologies such as machine learning. With a scoring system developed to assess the creditworthiness of unbanked segments of society, Amartha ensures access to capital, even without a credit history. The way Amartha uses technology will not dilute its social mission, but should just increase its impact. Since it turned itself into a peer-to-peer platform, Amartha has managed to exponentially increase its portfolio.

Today, Amartha reaches more than 470,000 entrepreneurs and aims to grow its client portfolio in the coming years. With more than 25 million women underserved financially in a country with high mobile and internet penetration, there still is a lot of growth margin.

One of Amartha’s clients is Pariyah who lives in Klaten on the island Java. When her son sent her one day some of the popular breadfruit (‘sukun’), she processed the exotic fruit into chips and sold it to her neighbours. Unexpectedly, her neighbours liked it so much that they wanted to buy more to share with their family and friends. One of those friends brought the chips to Japan, where she worked and gave it as a souvenir from Indonesia to her boss and co-workers. It became an instant hit and Pariyah started a business in breadfruit exporting every month 20 kilos of chips to Japan. Today, Pariyah runs a breadfruit snack business employing 12 employees, all living in Pariyah’s neighbourhood. The expansion of her business wouldn’t have been possible without the loans Pariyah received from Amartha. She used the money to buy land for her storage facility.

Pariyah with a bag of her famous breadfruit chips.

Pariyah with a bag of her famous breadfruit chips.

Ramdhan Anggakaradibrata, Chief Finance Officer of Amartha: “By empowering women like Pariyah with capital and digital literacy, we are promoting higher household incomes and a spread of prosperity. Since 2010, Amartha has supported more than 1 million female entrepreneurs across 20,000 villages in Sumatra, Java and Sulawesi.”

Incofin supports Amartha with debt financing through two funds that Incofin manages or advises: USD 2 million comes from the Incofin Inclusive Finance Fund and USD 4 million comes from the MEF (Microfinance Enhancement Facility).

Noémie Renier, Managing Partner Incofin Investment Management: “We are happy to start this new cooperation with Amartha and together reach out to women entrepreneurs in the countryside. This partnership will reinforce our expertise in digitalization and understanding of how new technologies can accelerate meaningful financial inclusion in the region.”

01/07/2022

Incofin cvso recently extended a loan to Kyrgyz Bailyk Finance – with over 45,000 customers and 43 offices, one of the largest microfinance institutions in the country. Bailyk Finance was founded in 2011 with the mission to create affordable financial solutions for rural and small cities’ residents to improve their quality of life. Reaching small entrepreneurs and farmers at the bottom of the social ladder is one of the key objectives of Bailyk Finance.

Most people in Kyrgyzstan work in the agriculture and livestock sector. Young farmer Choro Baarov is one of them. Choro’s childhood wish came true when he could start his own farm raising cattle and horses. Thanks to a loan from Bailyk Finance, he was able to expand his stables with two horses and seven cows, which enable him, for instance, to sell more milk and to increase his profits.

Incofin cvso’s financing allowed Bailyk to issue loans to clients like Choro, who want to invest in the development of their business or to renovate their homes.

 

17/02/2022