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.
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.”
We are committed to partnering even more proactively with companies to support their growth and resilience.”
FinDev Canada approved 10 new transactions in 2019, in support of enterprises including environmentally focused and women-focused funds, financial institutions, developers of renewable energy facilities and local businesses with positive impact in developing countries. Read more
We 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. We also became signatories of the Operating Principles for Impact Management and the Women’s Empowerment Principles. Read more
A place of leadership
FinDev Canada continued to strive to promote women’s economic empowerment. Anne-Marie Lévesque, Gender Lead at FinDev Canada, became Chair of the 2X Challenge Working Group, which welcomed several new members in 2019. Additionally, we played a leading role in the launch of the 2X Invest2Impact business competition and the celebration of its first-ever cohort of 100 winners during the Global Gender Summit in Kigali. Read more
In 2019, FinDev Canada continued to hire talented professionals to enhance its operations. We also announced the appointment of our gender-balanced Board of Directors with four independent members and two members from our target regions of operation.
FinDev Canada’s signed and approved clients As of December 2019
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.”
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
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
FinDev Canada seeks to achieve market-based returns that reflect market conditions in order to deliver value for impact. We use different instruments (e.g., debt, equity, guarantees) to reach this goal.
We aim to achieve a balanced portfolio, with smaller and larger transactions, and innovative and proven business models. We analyze environmental and social, legal, financial and other risks, consider the company’s business integrity and assess an investment’s potential impact to determine the risk profile of each transaction.
Sector and geography
FinDev Canada is concentrating on the agribusiness, green growth, and financial services sectors, and the Sub-Saharan Africa (SSA), Latin American and Caribbean (LAC) regions.
As a new DFI, we work to ensure a high degree of coordination with stakeholders. The organization relies on existing networks and peers to source opportunities in order to build connections in its regions of operation.
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.”
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
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
Tracking client-level impact
Performing internal/external impact assessments
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
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.
While there is no single definition of gender-lens investing, most approaches share a common objective of investing to generate both financial returns and positive impacts on women.
The Global Impact Investing Network (GIIN) defines it as investment strategies which:
seek to intentionally and measurably address gender disparities; and/or
examine gender dynamics to better inform investment decisions.
Women’s economic empowerment is also strategically linked to our two other development impact priorities: market development and climate change mitigation and adaptation.
Link between gender, local markets and climate change
When more women participate in the economy – as entrepreneurs, leaders, workers or consumers – local markets benefit. Enabling women to start and grow their own businesses and increasing their access to new markets generates income and creates jobs, which in turn injects additional revenue into local economies and communities in the form of taxes, salaries and consumer spending.
Women tend to be disproportionately affected by climate change events such as droughts, floods, water and food scarcity, and natural disasters. Supporting private sector solutions to climate change mitigation and adaptation could, in time, reduce the recurrence and outsized impact of such events on women.
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
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.
Promoting gender action through our investments
Supporting our clients in enhancing their gender inclusion and diversity practices and in driving greater women’s economic empowerment outcomes through their business activities is another key part of our gender-lens approach. Encouraging gender inclusion in companies or industries where it has previously been absent is key if we want to engender change and achieve true equality across the private sector. It is also an asset for growth-oriented businesses, as gender inclusion is correlated with sound business management, better financial and non-financial performance and more innovative teams.
Through FinDev Canada’s partnership with UN Women and our adoption of the Women’s Empowerment Principles, we have established an in-house process with all clients that starts with the completion of the Women’s Empowerment Principles Gender Gap Analysis Tool, a free and strictly confidential business-driven tool developed in consultation with more than 170 companies.
This first step allows us to assess our clients’ current approach to gender equality, identify gaps and opportunities for improvement, and develop a joint strategy with goals and targets to improve their performance when needed. Each client being different, we prioritize action items that are rooted in the client’s context and business activities. In 2020, we will be able to provide technical assistance on gender action to clients through our Technical Assistance Facility.
Leading by example
At FinDev Canada, we want to lead by example when it comes to gender inclusion, and to become an employer of choice for women and men.
Gender parity at FinDev Canada As of December 31, 2019, women comprised:
57%of our workforce
40%of our Senior Leadership team
40%of our Executive Risk and Investment Committee
56%of our Advisory Council
45%of our Board of Directors
Being a catalytic agent of change for gender-lens investing among the investment community2X Challenge
FinDev Canada, along with DFIs from other G7 countries – the United Kingdom (CDC Group), the United States (Overseas Private Investment Corporation – OPIC), Italy (Cassa depositi e prestiti – CDP), France (Proparco) and Japan (JBIC and JICA), with support from Germany (DEG) – committed to mobilize USD 3 billion by 2020 for investment in business activities that will benefit women.
In 2019, the initiative grew to 14 total members, including development finance institutions and multilateral development banks. Around the time of the 2019 G7 Summit, the 2X Challenge Working Group announced a total of USD 2.5 billion mobilized so far.
FinDev Canada chairs the 2X Challenge for the 2019–2020 term. Out of total capital committed by FinDev Canada in 2019, 56% was placed in 2X-qualifying transactions.
Head of Gender and Impact and former Chair of the 2X Challenge, Anne-Marie Lévesque (third from the left in front), with 2X Challenge representatives, August 2019Invest2Impact
Invest2Impact is a 2X Challenge initiative aimed at identifying 100 high-potential women-owned businesses in East Africa to support their access to funding, as well as their business sustainability.
This innovative program, supported by FinDev Canada, CDC Group, Proparco, OPIC and the Mastercard Foundation, began with a major outreach effort across Ethiopia, Kenya, Uganda, Rwanda and Tanzania, followed by four in-country competition roadshows in Addis Ababa, Kampala, Kigali and Dar es Salaam. This opportunity to connect with potential entrants to the competition allowed us to obtain a deeper understanding of the business landscape and support ecosystems in each country.
One hundred participants were selected from 800 applications and allocated into one of four Invest2Impact tracks. Each track is a process that begins once the competition has closed and continues for six to 12 months. Three of these tracks are geared to support access to finance, while the fourth aims to support market competitiveness.
Invest2Impact Competition Winners, December 2019Collaboration with fund managers through our investments
“We appreciate that FinDev Canada has encouraged us to elevate a gender-smart approach to our investment process. UN SDG #5 is now a core impact goal for EcoEnterprises Fund. In fact, we count four out of eight companies in our portfolio presently that qualify under the 2X Challenge. Based on additional feedback received from our Impact Committee at a meeting held to discuss gender-lens investment (in which FinDev participated), we integrated women’s leadership and empowerment focus within our environmental and social management tools – from pipeline development, to due diligence, to monitoring.”
Tammy Newmark, CEO and Managing Partner, EcoEnterprises Fund
Promotion of gender-lens investing worldwide
FinDev Canada is constantly engaging with the private and public sector in Canada and abroad to promote gender-lens investing, best practices in terms of women’s economic empowerment and the business case for gender equality as a driver of economic growth.
Gamification as a learning tool
In March of 2019, FinDev Canada launched Unequalopolis, a board game that serves as a learning tool to help players experience the legal and social barriers faced by women around the world that limit their full participation in the economy.
This game is set in a micro-economy where rules are different for men and women. The rules are based on real-life laws and regulations from several countries around the world, backed by data from institutions such as the World Bank, the World Economic Forum (WEF), the Food and Agriculture Organization (FAO), UNICEF and others.
Unequalopolis is played at several national and international events, as well as universities, and is used as a learning tool by peer organizations with a women’s economic empowerment focus.
Unequalopolis play session at HEC Montréal, September 2019
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.”
FinDev Canada’s portfolio dashboard As of December 2019 All figures stated in USD
9Clients in portfolio
94MTotal signed commitments (USD)
82%Equity investments (% total committed)
52X clients in portfolio (56%)1
New commitments (USD)
Equity vs. debt (% total commitments)
By sector (USD)
By impact focus (USD)
Red icons represent areas where clients are currently delivering impact and/or made a commitment to increase their impact in the future.
Geographical split (% total commitments)
Impact reported by investees3
Notes: 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.”
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.”
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.
Given FinDev Canada’s focus on inclusive market growth that provides decent jobs, grows local value chains and contributes to local GDP growth, investments in SMEs – directly or indirectly – will be considered as part of our broader market development efforts. As it grows, FinDev Canada will consider opportunities to provide its support in the currency of its clients, an important contributor to the sustainability of portfolio companies.
In the meantime, innovative financial instruments and significant risk appetite are required to cater to such enterprises, as traditional approaches have demonstrated their limits.
As FinDev Canada builds capacity to tackle these challenges, the use of intermediary financial institutions becomes crucial to address the SME and microfinance markets. These are some examples of current investments in our portfolio that help us achieve this goal:
Financing the co-operative model in Ecuador
In 2019, we announced a loan of USD 7.5 million to Cooprogreso, a leading financial co-operative in Ecuador that provides access to financial services to low-income customers.
Through Cooprogreso, we can help support financial offerings for segments of the population with limited or no access to finance, including small business loans, consumer loans, savings and medical insurance programs.
Partnering with leaders in the Latin American microfinance space
The opportunity to partner with a Canadian institution that supports microfinance institutions in Latin America originated through our parent company, Export Development Canada (EDC), and its partnership with Développement International Desjardins (DID). Given the affinity in terms of mission and objectives between FinDev Canada and DID, EDC transferred a loan to DID to FinDev Canada’s managed assets.
The loan is backing programs offered through two local financial institutions in Colombia and Ecuador that provide more than 1,500 jobs in rural areas and benefit mostly low-income clients by providing them with access to quality financial services. These institutions serve close to 150,000 clients, the majority of whom are women, and individuals from underserved rural areas, who tend to be financially excluded.
Supporting women-led SMEs in Africa
In 2019, FinDev Canada invested USD 7.5 million in Alitheia IDF Fund (AIF), a fund supporting women-owned and led businesses, to boost women’s economic empowerment and access to finance in Sub-Saharan Africa.
The first fund of its kind in Africa, AIF uses a gender-lens investing approach to support high-growth African SMEs that help improve women’s access to finance and foster their economic empowerment.
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:
Through our assessment of individual transactions for their environmental and social impacts and actions taken to reduce potentially negative impacts.
Through the activities of certain transactions which have a specific objective of positively addressing climate change.
In a portfolio of eight (8) signed transactions as of the end of 2019, two new transactions specifically aim to reduce the negative impacts of climate change through their business activities. These new transactions, combined with those previously signed, represent a total of 37.5% of our portfolio dedicated to environmentally sustainable economic growth.
An investment fund that is providing capital to biodiversity-based growth SMEs operating in sensitive ecosystems in Latin America
EcoEnterprises III explicitly targets biodiversity-based SMEs operating, in some cases, in areas of high biological diversity.
The Fund’s portfolio companies are expected to contribute to:
Maintaining or transitioning ~2.5 million hectares of land to sustainable management approaches, including those recommended by international sustainability certifications. This should lead to improved natural resources conservation, biodiversity conservation, and capacity to adapt to climate change, which will be monitored over the life of the Fund.
Increasing their sales of sustainably produced products and services, which will positively impact the volume and value of certified sustainable products and services sold in local and international markets, and contribute to the demonstration effect of sustainably managed SMEs also successfully reaching new and growing markets with a profitable business model.
African Sustainable Forestry Fund (ASFF) II
An investment fund focused on forestry and forestry-related assets in Sub-Saharan Africa
The Fund aims to build a portfolio of eight to 10 companies with quality management and high barriers to entry. It currently has a pipeline in excess of 40 potential transactions for a total of US$ 400 million across targeted Sub-Saharan African countries.
The Fund’s portfolio companies are expected to contribute to:
Maintaining or transitioning to sustainable land management approaches for up to 50,000 hectares of forest land, about 20% of which could be land under direct conservation.
Capturing carbon from standing biomass of the plantations, estimated at up to 3.5 tons of CO2, with additional carbon captured from wood products sold.
Replacing as much as 100,000 tons per year of coal and heavy fuels with biomass, thus contributing to a reduction in CO2 emissions of approximately 200,000 tons per year.
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.
For that reason, we are committed to support our clients, working in partnership with other institutions to bring liquidity to these markets and help them recover from the economic and social consequences of the pandemic.
Learn more about our four-point plan:
FinDev Canada is committed to transparency about its operations, strategies and policies. Below you can find FinDev Canada’s 2019 Financial Statements.