How we invest

How we invest

Investment Strategy

The Fund intends to allocate loans to partner financial intermediaries (PFIs) in the proportions outlined below:

End clients

Countries

Instruments

Loan tenor

Currency

SMEs(30-40%)

Microfinance
(60-70%)

Upper-middle income countries (20-40%)

IDA countries (35%)

Lower-middle
income countries
(excl IDA– 25-45%)

Sub loans (10-15%)

Senior loans
(85-90%)

Over 5 years (15-20%)

3 to 5 years (20-35%)

< 3 years (40-60%)

Hard currency
(20-40%)

Local currency
(60-80%)

  • Direct loans to PFIs
  • Average target size of $3 to 5 million

Balanced country allocation

  • Senior or subordinated loans
  • Fixed or floating rate

Maturities of up to 5 years for senior loans and up to 7 years for subordinated loans, to be extended up to 10 years on an exceptional basis

Investments mostly in local currencies ensuring that the risk of currency fluctuations is not borne by the institution or its ultimate clients

Group 3440
Group 3442
Group 3446
Group 3447
Group 3448

How will we address
the problems identified?

Overall Objectives

  • Leveraging capabilities of three industry-leading Portfolio Managers
  • Supports to PFIs that
    • demonstrate a gender-smart strategy or
    • show a strong intentionality and commitment to deploying gender-smart measures going forward
  • Financial assessment to ensure good credit quality of PFIs

Structure & Implementation

  • Detailed gender assessment conducted for every potential investment
  • Management commitment at the level of the PFI to develop and implement a gender-smart strategy, either internally or externally, or both.
  • Gender Action Plan with clear targets for all projects (legally binding)

Areas of intervention

  • Gender Action Plan implementation monitored on a quarterly basis
  • Collection of gender KPIs
  • Financing earmarked for MSMEs and eligible consumer loans with at least 80% of the financing allocated to Target Clients.
  • Support to selected PFIs through technical assistance in order to achieve the targets set out in the gender action plan.

Possible renewal of financing provided Gender Action Plan has been completed and use of proceeds condition has been met

How will the Fund aim to address the problems identified?

Group 3523 (2)
Group 3523 (1)
Group 3552 (1)

Possible renewal of financing provided Gender Action Plan has been completed and use of proceeds condition has been met

Outreach through Partner Financial Institutions (PFIs)

Goal

Each PFI can become Gender-Smart with GGSF support

Gender
Agnostic

Defined by INTENTION

  • The PFIs does not meet any of the 2X criteria gender criteria but.
  • Exhibits strong motivation to climb higher and,
  • Does not have explicitly discriminatory policies or practices

Gender Lens (or inclusive)

Defined by CONCIOUSNESS

At a minimum, the PFI:

  • Exhibits strong motivations to improve its gender performance
  • Is 2X Challenge-aligned

Gender

Smart

Defined by INTENTION

At a minimum, the PFI:

  • Exhibits motivation to maintain and/or improve its gender performance
  • Is 2X Challenge-aligned, meeting multiple criteria 
  • Demonstrates gender-results as measured by historical milestones

Outreach through Partner Financial Institutions (PFIs)

Group 3550
Group 3550 (1)
Group 3551 (1)

Technical assistance

The Fund strategy will be complemented by a Technical Assistance Facility which will empower the financial institutions to better benefit from the funding.

Overall Objectives

To make gender equity a fully integrated part of the operations of the financial institutions.
To support financial institutions in improving their own gender performances and strategies
To support financial institutions in developing gender-smart products & services for the final beneficiaries

Structure & Implementation

Interventions by the TA Preferred Provider:

Menu of pre-selected interventions designed by TA Preferred Provider
PM and PFI select interventions based on Gender Action Plan

Areas of intervention

Address gender gaps identified
Support in collection of gender data
Development of frameworks and systems for gender consideration
Deploy products tailored to the needs of Target Clients
Promote gender equality within the PFIs’ organization and workplace

Technical assistance

The Fund strategy will be complemented by a Technical Assistance Facility which will empower the financial institutions to better benefit from the funding.