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Microfinance – Header image (photo)


Impact measures

Triodos Investment Management’s specialised microfinance funds provided finance to 102 microfinance institutions (2013: 97) in 44 countries (2013: 44), serving approximately 8.2 million savers (2013: 7.9 million), and 11 million borrowing clients in 2014 (2013: 8.4 million).

Microfinance – Impact measures (graphic)

Our vision and activities

Microfinance lending

Microfinance lending by region

Microfinance – Lending by region (pie chart)

Our vision

Triodos Bank has been one of the leading investors in the microfinance sector since making its first investments in the industry in 1994. We recognised that sustainable development, and addressing inequality, exclusion and poverty issues in particular, was a global issue and have been applying our expertise in the inclusive finance sector to address these international challenges ever since.

Over the past ten years we have seen microfinance rapidly evolve and expand. Many national governments across all continents have come to recognize the importance of building inclusive financial sectors – where the majority of people have access to financial services. The financial inclusion gap has appeared on the agenda of the United Nations and G20, for example. Increasingly, investors have recognized the potential for social and financial returns from microfinance, and direct funding towards it.

As an investor we can influence the direction the inclusive finance industry takes. We share this responsibility with everyone involved in the value chain – investors, microfinance institutions, banks and other stakeholders – to understand, acknowledge and act in the interests of clients; clients, who are typically living on low-incomes and constrained by limited financial knowledge, power and influence. Focusing on the interests of these individuals and their families is the only way to achieve long term sustainable financial results.

To help shape an inclusive financial services industry that keeps the client’s interests at its core, a group of investors, including Triodos Investment Management, worked together to draft Principles for Investors in Inclusive Finance. These investors believe that specific principles for investors in inclusive finance will strengthen the movement towards responsible finance. The principles have been developed with a broad group of stakeholders including UNPRI (United Nations Principles for Responsible Investment Initiative) and were launched in January, 2011.

Triodos Bank supports the sector in other ways too; it recognises that we live in an interconnected world, where changes in one country – such as economic crises – can have a profound impact on the other side of the globe. These connections also present enormous opportunities, so Triodos Bank co-founded the Global Alliance for Banking on Values, a network of banks promoting the use of finance to deliver sustainable development for unserved people, communities and the environment.

Case study


Microfinance – Case study Avand - Tajikistan (photo)

What challenge was the inspiration for the project?

When Tajikistan gained independence from the Soviet Union in 1991, the spirit of commerce that existed from the days of the Silk Road flourished again as entrepreneurs began to establish their own businesses. As a result, a rapid demand for funding developed.

However, a banking sector that remained out of reach for many and the high percentage of entrepreneurs without access to credit soon became apparent. When Arvand was founded in 2002, it was established to address just this need, improving the socioeconomic well-being of Tajik citizens by providing financial services.

What was your innovation that addresses this problem?

After the fall of the Soviet Union, subsidies for agriculture diminished and consequently, many of the rural poor today are in the agricultural sector. By providing more than ten different types of credit products (and also deposit and micro leasing services), including individual and group loans for animal husbandry and agriculture business, Arvand has grown to become the third largest microfinance institution in Tajikistan in terms of outstanding loan portfolio.

Of the 32,000 loan clients, 53% are rural clients now receiving access to finance and many of whom are in the agricultural sector. To better serve the rural clients, a television series has been created to educate entrepreneurs on financing issues, and also a weekly question and answer session on the radio.

Recognizing that women also play a crucial role in establishing a healthy economy, many of Arvand’s financial activities and services focus on empowering women in rural areas through group credit. Over 40% of the borrowers are female.

What impact has Triodos Bank had on the business?

Arvand has borrowed from Triodos since 2010, through the Triodos-Doen foundation. Later, in 2014, Triodos Investment Management and Belgium-based Incofin Investment Management jointly acquired a 36-percent equity stake. This paved the way to expand the current product offering and receive operational guidance as the company grows its geographical outreach.

What impact has your business had on the sector it works in?

In 2014, Arvand was a part of an agreement to improve access to financial services in rural areas of Tajikistan, led by the Ministry of Economic Development and by the German government. This agreement allocated EUR 4.5 million from the German government to microfinance organisations on a grant basis. Through the agreement, the Tajik microfinance institutions will aid the development of the sector.

In addition to their participation in the agreement, Arvand works with domestic and international partners to provide financial training to clients and helps to educate the population about the importance of ecological protection, specifically with regard to agriculture.

What impact has the business had on the community?

Providing the diverse products range gives clients access which in turn can positively affect the local economy; however, Arvand also strives to create a social impact.

With over 280 members of staff, Arvand participates in the development of the local community either by planting trees, sponsoring cultural or sporting events, and/or facilitating activities that focus on education and promote family values. Staff also visit businesses with other clients to learn from local entrepreneurs, and foster a more collaborative and successful environment.

How does Triodos Bank share the vision behind the project?

As an international investor and board member, Triodos Microfinance Fund and the Triodos Fair Share Fund provide a level of expertise that can help the Arvand to scale-up. Both organisations share the goal of providing a diverse product offering to more people who are currently excluded from the formal financial system. Arvand and Triodos both want to improve quality of life through financial inclusion, in support of entrepreneurs, rural residents and women.


The evidence of the impact of our microfinance activity is drawn from Triodos Investment Management’s Emerging Markets Sustainability Management System. This information is based on detailed quarterly reports by the microfinance institutions and banks in the portfolio, annual reviews, and on-site visits.