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Emerging Markets

The inclusive finance and sustainable trade funds’ goal is to contribute to the development of inclusive financial sectors in developing countries. Inclusive financial systems improve lives by providing financial services in a transparent and responsible way, encouraging trade in certified fair trade and organic products and stimulating sustainable agriculture. Triodos Investment Management believes that access to financial services plays a crucial role in reaching global sustainable development goals.

The Emerging Markets’ activities consist of the management of internationally operating funds that invest in emerging markets in Latin America, Africa, Asia and Eastern Europe.

The emerging market funds collectively grew by EUR 71 million in 2014, an increase of 12.6% to EUR 633 million.

The activities of the Triodos Fair Share Fund, Triodos SICAV II – Triodos Microfinance Fund, Triodos Sustainable Finance Foundation, Stichting Hivos-Triodos Fonds, Triodos Sustainable Trade Fund, and Triodos Renewable Energy for Development fund, are all managed from the Triodos Investment Management offices in The Netherlands.

Developments in 2014

In 2014 Triodos Fair Share Fund and Triodos Microfinance Fund have been very active with equity investments. Between the two of them, the funds have taken an equity share in six microfinance institutions. At the same time, the funds have sold part of their shares from three microfinance institutions because they have matured to become fully-fledged banks, in terms of outreach, governance, risk management and performance.

Inclusive finance

EUR 633 million

Since 1994, our assets under
management in the
microfinance sector have
increased to EUR 633 million,
making us one of the leading
investors in the industry.

Combined total assets under management in inclusive finance were EUR 600 million, up by 12.5%.

The four Triodos inclusive finance funds; Triodos Fair Share Fund, Triodos SICAV II – Triodos Microfinance Fund, Stichting Triodos Sustainable Finance Foundation and Stichting Hivos-Triodos Fonds financed 117 microfinance institutions and banks, operated in 47 countries in 2014. These institutions reach 10.7 million low-income clients with loans (2013: 8.4 million). 70% of these are women. 8.3 million people were served with savings products (2013: 7.9 million). 49% of these clients live in rural areas.

The four Triodos inclusive finance funds hold equity stakes in 22 leading and innovative microfinance institutions and vehicles worldwide (2013: 22). Senior Triodos Bank co-workers sit on the microfinance institutions’ board of directors, sharing valuable knowledge and expertise in sustainable banking.

Portfolio Triodos Microfinance Funds

31 December 2014

Case Study

Triodos Investment Management, together with AccesHolding and responsAbility, has acquired ownership of Microfinance Organization Credo in Georgia from VisionFund International. Triodos Fair Share Fund and Triodos Microfinance Fund jointly hold a 19.8% equity stake.

Credo stands out as an internationally recognised example in providing microfinance services throughout Georgia. In close cooperation with Credo’s management Triodos Investment Management, together with the other investors, will further build on the very solid foundation and continue to develop Credo into a strong provider of sustainable and accessible financial services, contributing to social and economic development in Georgia.

Prospects

Continuing growth of the inclusive finance funds is expected in line with current trends. Triodos Investment Management sees strong demand for finance in emerging markets and will continue to add new investments to the portfolios of the inclusive finance funds. The funds will continue to target a broad range of institutions active in the financial inclusion sphere, such as traditional microfinance institutions, as well as SME banks and micro-leasing companies.