BlueOrchard, Global Affairs Canada and IDB Invest partner together to advance Gender Diversity and Inclusion Investments in Latin America and the Caribbean
- In partnership with Global Affairs Canada and IDB Invest, BlueOrchard (a member of the Schroders Group) is launching a dedicated impact investing strategy focusing on gender equality, diversity, and inclusion in Latin America and the Caribbean (LAC)
- The strategy focuses on accelerating the financial inclusion of women, Indigenous groups, afro-descendants, migrants, and other underserved groups in the region through an innovative blended finance approach
- USD 100 million raised from public investors as well as renowned family offices and pension funds, target size is USD 200 million
- It is the second dedicated gender-lens investment strategy managed by BlueOrchard, present with regional strategies in LAC since 2007
- The impact strategy has sustainable investment as its objective within the meaning of Article 9 of the SFDR regulation[1] and addresses the United Nations Sustainable Development Goals (SDGs)
In LAC, 70% of the population is unbanked[2], indigenous households make up 17% of the population living in extreme poverty[3], and Afro-descendants are 2.5 times more likely to be chronically poor than whites[4]. The financing gap for women-led enterprises and women-owned micro businesses in the region is nearly USD 100 billion[5]. There is a continued dependency on public funds to address this challenge, even though public funding alone will not be sufficient.
There is an urgent need to promote financial inclusion for underserved and marginalised groups in Latin America and the Caribbean through tailored solutions and innovative investment strategies. Building on shared objectives, two important public investors for development, Global Affairs Canada and IDB Invest, combined their strengths with BlueOrchard and Schroders to provide financing to increase the economic well-being and resilience of micro, small, and medium-sized enterprises (MSMEs) led or owned by underserved groups in LAC. Using an innovative blended financing approach with investments from both the public and the private sectors, the strategy will help to close funding gaps for MSMEs in LAC. The impact strategy will focus on three key strategic pillars to achieve its goal: (1) developing and improving inclusive solutions offered by financial institutions in the LAC region; (2) promoting gender, diversity, and inclusion practices at the level of financial institutions; and (3) collecting, analysing, and evaluating relevant gender, diversity, and inclusion (GDI) data at the market, institution, and aggregated client levels. In this way, the strategy is expected to contribute not only to better impact measurement, but also to more tailored product development and improvement, as well as GDI practices. In addition to financing, a technical assistance facility will support market building activities and projects.
“We have been committed to inclusion for more than 20 years and have been present in Latin America and the Caribbean for more than 15 years. With this important Gender, Diversity, and Inclusion strategy, thanks to our strong partners, we can take a big step forward towards greater equality and unleash the potential of entrepreneurship for underserved groups,” said BlueOrchard’s CEO, Philipp Mueller.
"As a responsible investment business, we prioritize Sustainable and Impact investing practices at Schroders Capital, with unique opportunities to accelerate positive change and deliver long-term impactful financial performance. Our commitment to sustainability and impact includes supporting the transition to net zero and promoting financial inclusion and sustainable development worldwide through tailored solutions and innovative investment strategies. We believe this strategy can make an important contribution to promoting financial inclusion for underserved and marginalised groups in Latin America and the Caribbean," said Georg Wunderlin, Head of Private Assets, Schroders Capital.
“The Government of Canada is committed to supporting new partnerships and ways to finance and drive development, particularly for excluded populations. It’s imperative that we mobilize public and private investment -- and especially innovative sources of financing -- for greater social, economic, and environmental impact. Canadian investments are helping to build new markets for private investment, especially with a gender lens,” said Louis Marcotte, Ambassador of Canada for Peru and Bolivia.
“The impact and profitability of investing with a gender, diversity and inclusion lens is becoming increasingly known, yet there still remains significant financing gaps for women entrepreneurs, indigenous groups, afro-descendants, migrants, and other underserved groups in Latin America and the Caribbean,” said Gema Sacristan, IDB Invest’s Chief Investment Officer. “At IDB Invest, financial inclusion is a priority for us. Together with banks and other financial intermediaries, we are committed to advancing this objective to support gender equality, diversity, and inclusion, and financial well-being of vulnerable populations.”
BlueOrchard, which is a member of the Schroders Group, is a pioneer in the growing field of impact investing. The firm has a track record of over 20 years, a global reach of 260 million beneficiaries, and manages the largest commercial microfinance fund in the world. A multi-asset class impact fund manager, BlueOrchard combines social and environmental impact with a positive financial return. BlueOrchard has invested in more than 105 emerging and frontier markets through a network of over 720 financial institutions. The firm’s impact and ESG management process is best-in-class and externally verified.
BlueOrchard has been present in LAC since 2007 and was selected in a competitive process after the 2007/2008 financial crisis to manage a microfinance strategy exclusively for LAC. The strategy has financed 400’000 micro-entrepreneurs across 13 countries in LAC. BlueOrchard’s investment team in LAC is located in Lima, Peru, and has an extensive track record in working with financial institutions across the continent.
[1] Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (“SFDR”).
[2] FinTech Is Driving Financial Inclusion In Latin America (forbes.com)
[3] The situation of Latin America’s indigenous population and the impact of COVID-19 | United Nations Development Programme (undp.org)
[4] Eliminating Afro-descendant Exclusion in Latin America is Vital for Development (worldbank.org)
[5] Gender Lens Investing: How Finance Can Accelerate Gender Equality in Latin America and the Caribbean. IDB.” (2019)