Publication database

Fomento Social Banamex is the philanthropic arm of Citibanamex Mexico, and its goal is to reduce inequality in Mexico. It promotes capacity-building for social organizations to better meet the needs of marginalized communities living in poverty. Under this scheme and through its strategic partners, it has supported Unión Majomut, a cooperative of coffee farmers from Chiapas, so that it partakes in the entire value chain and earns a higher income for partner families.

Argidius Foundation supports small and mediumsized enterprises to improve the quality of life of the population living in poverty by promoting entrepreneurship ecosystems that involve strategic partners. To this end, Argidius has supported Thriive (in Guatemala), an organization that provides institutional strengthening and equipment acquisition services to small and medium-sized enterprises, under a “repay the community” model.

The Impact investing market map, provides three basic but crucial benefits to the impact investing industry: (1) a common definition of a thematic investment that is aligned with at least one international organisation, global market leader and/or data provider; (2) basic criteria that explain a theme in practical terms, including thematic and financial conditions to identify specific businesses and investments aligned with the definition provided;  (3) a list of KPIs used by the impact investing community to track and assess the environmental and social performance of a specific theme.

The social economy is a reality in many people’s lives because it promotes values and principles that focus on people’s needs and on their communities. In a spirit of voluntary participation, self-help and self-reliance, and through enterprises and organisations, it seeks to balance economic success with fairness and social justice, from the local level to the global level. Because of their social and economic purposes, social economy organisations are often vulnerable at the financial level; they have difficulty building financial reserves or covering their operating costs. Conventional private investors often see social economy organisations as being unattractive. Social economy organisations often have to rely on public subsidies which can present challenges for their autonomy. This paper explores the different financing streams (i.e. membership funds, grants, debts, equity and quasi-equity finance) used by social economy organisations by focusing on three case studies from Canada, Kenya, and the United Kingdom. Based on the case studies and on financial literature, the paper proposes what could be the constitutive elements of a good and balanced model for financing social economy organisations.

The main purpose of this report is to share the African experience and open the eyes of the stakeholders as to where the financial industry stands these days. In doing so, this report also proposes an engagement agenda for the industry and calls on the African DFIs and the ILO to continue the collaboration to increase the social capacity of development finance on the continent and beyond.

The main purpose of this report is to share the experience from Asia and the Pacific and open the eyes of the stakeholders as to where the financial industry stands these days. In doing so, this report also proposes an engagement agenda for the industry and calls on the DFIs from Asia and the Pacific and the ILO to continue the collaboration to increase the social capacity of development finance on the continent and beyond.

Informal finance mechanisms are as diverse as they are ubiquitous, including institutions such as rotating savings and credit associations (ROSCAs), accumulating savings and credit associations (ASCAs), informal moneylending, loan brokers, and burial societies, to name a few. Such mechanisms may or may not be 'traditional', and range from simple to complex. They attend to diverse needs such as consumption smoothing, enterprise financing, promoting savings discipline, and intermediation between savers and borrowers. Arguably, the core-identifying characteristic of informal financial institutions is that emphasize inter-personal relationships, rather than relying on anonymous interaction between a client and a formal institution.

Many entrepreneurs in the informal economy, and the employees that work in those businesses, are often exposed to difficult and dangerous working conditions.

The tools used to identify, prevent and rectify such conditions in the formal economy – including social dialogue between employers and employees, labour inspection and other applications of labour law – generally do not apply to the unregistered enterprises such as the ones cited. Alternative approaches are required to help these entrepreneurs, but what can be done, and how?

New ILO research backs up the idea of reaching and helping these businesses through microfinance institutions (MFIs). Microfinance for Decent Work – Enhancing the impact of microfinance: Evidence from an action research programme was led by the ILO’s Social Finance Programme in collaboration with the University of Mannheim in Germany.

In many emerging markets, MFIs have significant outreach, providing financial services to thousands, if not millions of small and micro enterprises. Since their primary relationship with these entrepreneurs often involves an enterprise loan, they were able to use that leverage to improve conditions in the business.

From 2008 to 2012 the ILO collaborated with 16 microfinance institutions  to test a range of approaches to foster social impact through the delivery of innovative financial and non-financial services. Eliminating child labour, fostering the formalization of enterprises, reducing vulnerability and enhancing business performance through improved working conditions – these are decent work objectives that MFIs addressed in the framework of the “Microfinance for Decent Work” (MF4DW) action research programme.

The results highlighted one key message: that MFIs can achieve desired results if they identify an issue and then focus on that area to help their clients.

Bai Tushum launched and tested a small-and-medium-sized Enterprise loan delivery mechanism to see if such targeted mechanism would have a positive impact on the number of jobs created. The social performance assessment compared several clients groups namely those who received loans under new delivery channels and those who did not. 1) We find a small weak effect of increase in loan size on job creation, the effect is not always significant. 2) We find a negative effect of client exit on job creation. 3) Other factors such as type of sector are influencing job creation.

This paper reflects on experience of two MFIs in Mali, both of which have witnessed a donor withdrawal in recent years. The objective is to trace the consequence of the observed
reduction in external funds in terms of changes in both breadth and depth of poverty outreach during the period 1999-2004. The two MFIs reacted differently to donor withdrawal. While Nyèsigiso has continued to assure sound financial profile as well as a growth in its clientele, by sacrificing in terms of poverty orientation, the Caisses Villageoises d’Epargne et de Crédit Autogérées des Pays Dogon have kept their focus on very poor and vulnerable clients, but suffered in terms of financial sustainability.