Contributing to sustainable and inclusive business in developing countries

In 2019, FinDev Canada continued the foundational work started in 2018 while adding to its portfolio a series of impactful investments in Latin America and Sub-Saharan Africa. These actions are aimed at empowering women, advancing local market development and mitigating climate change.

Mairead Lavery
Chair of the FinDev Canada Board of Directors and CEO of Export Development Canada

I am proud of what FinDev Canada has accomplished in such a short time, and eagerly look forward to seeing how they will become a key player in sustainable market development, climate action and women’s economic empowerment.”

Paul Lamontagne
Managing Director

We are committed to partnering even more proactively with companies to support their growth and resilience.”

2019 highlights

Impactful transactions

FinDev Canada approved 10 new transactions in 2019, in support

Key partnerships

We established key partnerships to help tackle poverty in

A place of leadership

FinDev Canada continued to strive to promote women’s

Stakeholder engagement

FinDev Canada continued to engage stakeholders on key

#DevMeetsTech: Leveraging technology for development

FinDev Canada and its Swedish peer, Swedfund, started a

Sustained growth and enhanced governance

In 2019, FinDev Canada continued to hire

FinDev Canada’s signed and approved clients
As of December 2019

Signed Approved
2019 Danper logo Criterion logo Alitheia logo Cooprogreso logo
Cooprogreso logo JCMPower logo Desjardins logo
Envision logo Produbanco logo MFX logo
2018 Climate Investor 1 logo Climate Investor 1 logo
USD 94M commitments
9 clients
5 2X eligible
USD 70M commitments
3 clients

Born and raised in a developing country, I have seen first-hand how the private sector can contribute to improving people’s quality of life and achieving sustainable development when impact is an imperative.”

Angela Rodriguez, Senior Marketing and Communications Specialist

Building an impactful portfolio

As an investor, FinDev Canada aims to build a diversified investment portfolio that will achieve sought-after impact and financial objectives. To reach this goal, we developed an investment strategy based on five key elements: impact, financial return, risk, sector and geography, and collaboration.

FinDev Canada’s investment strategy and its five key components

Read more below Impact Read more below Financial return Read more below Risk Read more below Sector and geography Read more below Collaboration

We screen every potential investment on its ability to meaningfully contribute towards one or more of the three impact areas:

FinDev Canada’s impact goals

Market development (MD)
  • Expand local ownership and leadership
  • Strengthen local small and medium-sized enterprises (SMEs) and value chains
  • Increase employment and local economy value-add (taxes and salaries)
Women’s economic empowerment (WEE)
  • Support women’s business ownership, leadership and decent employment
  • Improve equal access to and control over basic services (water, energy) and economic tools (financial services, digital connectivity)
Climate change mitigation and adaptation (CMA)
  • Support sustainable industries that reduce natural resource use, waste and carbon emissions
  • Contribute to the transition to a low-carbon economy
  • Scale climate adaptation solutions

As a new DFI, we have been working to make our mark over time and boost entrepreneurs and small and medium-sized enterprises in their markets.”

Paulo Martelli, Director of Investments

Systematic approach for
assessing impact of every investment

Impact assessment is integrated into every part of our investment decision-making process, from pre-screening and due diligence, through to monitoring and reporting.

FinDev Canada’s development impact management process

1. Pre-screening
  • Checking impact eligibility and fit
  • Estimating performance potential on impact goals
2. Due diligence
  • Quantifying current and expected impact
  • Agreeing on impact actions, KPIs and targets
3. Monitoring
  • Tracking client-level impact
  • Performing internal/external impact assessments
4. Reporting
  • Publishing aggregated impact results of portfolio
  • Sharing impact analytics with clients for business improvement

We screen every potential investment on its ability to meaningfully contribute towards one or more of our three impact areas. As shown below, each impact area is underpinned by a set of key performance indicators (KPIs) that we collect data on; many of these indicators have been aligned with industry best practices such as the Harmonized Indicators for Private Sector Operations (HIPSO), the 2X Challenge criteria and the Global Impact Investing Network (GIIN) Impact Reporting and Investment Standards (IRIS).

FinDev Canada’s KPI examples

Market development (MD)
  • SMEs supported (#)
  • Decent jobs (#, M/F)
  • Local procurement ($, %)
  • Net profit and taxes paid ($)
  • Salaries paid ($, mgt/staff)
  • Local ownership (%)
Women’s economic empowerment (WEE)
  • Women-owned companies supported (#, %)
  • Women in senior leadership (#, %)
  • Gender-inclusive governance (#, %)
  • Women gaining access to basic services or empowerment tools (#)
Climate change mitigation and adaptation (CMA)
  • Renewable energy produced (GWh)
  • Net CO2 emissions avoided (MT)
  • Natural resource use reduction
  • Waste reduction
  • Customers gaining access to climate adaptation tools (#)

In addition, we also leverage other data sources in our impact analysis, including data from the UN and the World Bank on gender inequality, poverty rates and carbon intensity per country, among other indicators. This helps us understand country/sector-specific development needs and assess a prospective investment on its relative impact potential. For example, it can highlight if a company is operating in a carbon-intensive industry or how the percentage of women employees compares to regional averages.

In assessing transactions for their development impact, we evaluate a prospective client on both the current and the potential development impact of their business operations. This helps ensure that our investments and in-house expertise can be leveraged, not only to encourage and amplify business practices that are already resulting in the desired outcomes, but also to have a transformative effect in industries and businesses that are committed to improving their performance and having a positive impact in local markets.

Our gender-lens approach

Gender equality and women’s economic empowerment (WEE) are strategic priorities for FinDev Canada. We are proud to be a gender-lens investor, and we apply a gender lens to 100% of our transactions.

Women’s economic empowerment is also strategically linked to our two other development impact priorities: market development and climate change mitigation and adaptation.

The right and smart thing to do for the private sector – and DFIs

In 2019, our Board of Directors approved FinDev Canada’s Gender Equality Strategy and Policy, two cornerstones that ensure the integration of a gender lens across all our investments, as well as in our own operations, our partnerships and other aspects of our day-to-day business.

FinDev Canada’s gender-lens strategy
Portfolio level
Institutional and industry level
Using our capital to bridge gaps in gender-lens investing

As set out in our Gender Equality Strategy, we will use our capital to bridge gaps in gender-lens investing and deploy capital towards investment opportunities that intentionally and actively drive impact on women’s economic empowerment. In line with our chosen gender lens, we typically define those opportunities as investments in businesses that are owned or led by women, businesses that provide decent work to women, businesses that provide women access to basic services and economic empowerment tools, as well as funds or financial intermediaries supporting these businesses.

As an impact investor in Africa, I witnessed first-hand the obstacles and challenges that women entrepreneurs in this region face every day. Still today, in many countries, women cannot open bank accounts, own land or sign contracts. I feel obligated to work to end this inequality by constantly educating myself, and others, about it. At FinDev Canada, we want to use our capital to bridge economic gender gaps, including the financing gap for women entrepreneurs and fund managers.”

Paul Lamontagne, Managing Director

FinDev Canada’s portfolio dashboard As of December 2019
All figures stated in USD

9 Clients in portfolio
94M Total signed commitments (USD)
82% Equity investments (% total committed)
5 2X clients in portfolio (56%)1
New commitments (USD)

1 2X qualified deals: Alitheia, Cooprogreso, Danper, EcoEnterprises Fund and M-KOPA.
2 “Multiple” refers to Climate Investor One, which operates across Sub-Saharan Africa and Asia.
3 This is based on data reported by M-KOPA, Climate Investor One and Danper. Others currently report their annual KPIs later in the year.
4 This represents direct and indirect customers with improved access to energy. Indirect estimates come from FMO Impact model.

Leveraging partnerships for
sustainable development

In 2019, FinDev Canada established key partnerships to help tackle poverty in developing countries with peers such as the DFI Alliance, the Inter-American Development Bank (IDB), the Association of European Development Finance Institutions (EDFI), Proparco, COFIDES, Trade and Development Bank (TDB), and UN Women through the signature of Memoranda of Understanding and became signatories of the IFC Operating Principles for Impact Management and the Women’s Empowerment Principles.

FinDev Canada signs MoU with BIO, May 2019

Joint investment opportunities

Partnerships allow us to join forces with like-minded peers to invest in sustainable and inclusive businesses and funds that operate in developing countries and help create jobs, empower women and contribute towards climate change mitigation.

Our partnerships with FMO, BIO and the African Development Bank allowed us to identify and participate in many such opportunities in 2018 and 2019, including Climate Investor One, EcoEnterprises III and Alitheia IDF, and businesses such as Danper Agrícola La Venturosa.

Every day, we are actively working to create a more inclusive and sustainable society. After all, every child deserves to be born into a world where hard work and commitment and perseverance can be met with the opportunity and resources to bring their vision to life.”

Shereen Aly, Legal Counsel

Better impact performance =
better business performance

FinDev Canada aims to provide additional value to clients seeking to improve their business performance through sustainable practices that benefit the bottom line.

In 2019, Global Affairs Canada approved funding for a partnership with FinDev Canada that provides grants to clients to address capacity gaps in gender action, impact data, business performance and field building.

Women representation on a board level and a C-Suite level, for example our CIO and our Director of Impact at the decision-making table, is very pertinent for a gender-based organization.”

Fatuma Muzungu, Project Manager

2020 outlook

Challenges and opportunities

Addressing SMEs and “the missing middle”

SMEs, which represent around 45% of the labour market and generate one-third of a country’s GDP, often face limited access to capital. Despite the fact that every dollar invested in SMEs generates, on average, an additional $13 for the local economy, in countries with low traditional banking capacity, SMEs lack access to equity financing and struggle to attract investment.

Contributing to climate change mitigation

A key impact objective for FinDev Canada is to assist with the mitigation of and adaptation to the negative impacts of climate change. This is accomplished in one of two ways:

Helping to mitigate the impact of COVID-19 in the private sector in developing countries

FinDev Canada’s mission to promote a more sustainable and inclusive world through private sector investments in developing countries becomes more relevant than ever amid the COVID-19 crisis, when emerging markets are severely impacted.

Financial reporting

FinDev Canada is committed to transparency about its operations, strategies and policies. Below you can find FinDev Canada’s 2019 Financial Statements.