Investors' Corner Overview
At the Microfinance Social Investor Meeting that was held in Den Bosch in June 2011 more than 30 investment organizations exchanged ideas on practical steps to implement the UN-backed Principles for Investors in Inclusive Finance (PIIF). Forty-seven investment organizations already endorsed the PIIF Principles since they were launched in January 2011 at the Responsible Finance Forum hosted by the Dutch Ministry of Foreign Affairs. The Principles include:
Principles for Investors in Inclusive Finance (PIIF)
- Range of services
- Client protection
- Fair treatment
- Responsible investment
- Transparency
- Balanced returns
- Standards
Investors were frank and open about challenges faced and irresponsible behavior that needs to be avoided. In-depth discussion was held on several topics related to the implementation of the PIIFs. Investors shared experiences on how to reflect responsible investment standards in loan covenants and how to determine the right level of investment in a given market. They also focused on the role of investors in avoiding overindebtedness and specific opportunities for equity investors to use their engagement to advance responsible finance. Investors agreed to share and potentially harmonize due diligence tools among a dozen MIVs, explore joint due diligence missions and ways to assess interest rates of MFIs. Read the report with insights from the discussion.
The Social Investor Group of the Social Performance Task Force (SPTF) will continue to share experiences and practices and work closely together with the UNPRI to implement and monitor the PIIF. Four action groups have been created to follow up on ideas discussed. Investors can participate in the groups by contacting the lead person.
- Due diligence tools sharing – led by Christophe Bochatay of Triple Jump
- Overindebtedness – led by Ximena Escobar de Nogales of Blue Orchard
- Responsible covenants – led by Dina Pons of Incofin
- PIIF sharing learning on implementation and developing assessment framework – led by Antonique Koning, CGAP
The Social Investor Group will continue to provide a platform for investors to communicate, exchange and act in concert to send a strong signal that social performance is valued.
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