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

How will we address
the problems identified?

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

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)

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

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 OUTREACH

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

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.

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

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

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

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