3- year rating partnership with Svasti

mmateen
13. January 2021
Rating

With the beginning of 2021 it’s also a period of good wishes, such as health, success & happiness. Speaking of #happiness – Our Rating Team is glad to announce the onboarding of a new partner: Svasti Microfinance offers microfinance, MSME loans and consumer finance to over 180k female customers in #India. Did you know? In Sanskrit and Hindi the word svasti means welfare, blessing or happiness.

Over the next three years, we will conduct an annual sustainability performance assessment of Svasti’s operations using our Agents for Impact Sustainability Alignment Rating (AFISAR©) Tool. The initial rating conducted for FY 2018/19 already indicated a comparably sound #sustainability performance at institutional and portfolio level.

“We are very glad to see the positive initial rating results and look forward to learning about the strengths and weaknesses of our #SDG performance based on the AFISAR© Tool. Particularly, the partnership will help us to not only measure and quantify the SDG performance of our operations but even compare to other organisations”, commented Mr. Arunkumar Padmanabhan, Wholetime Director and CEO at Svasti Microfinance.

Tags: impact, impactinvesting, microfinance, nbfcs, sdgs, sustainablefinance

The 2030 Agenda for Sustainable Development and the Paris Agreement (both adopted in 2015) as well as the European Green Deal call for a deep transformation towards an inclusive, socially just, carbon-neutral and regenerative economy.

The UN estimates that annually $2.5 trillion need to be mobilised to finance the Sustainable Development Goals (SDGs). And yet, the COVID-19 pandemic creates a massive setback in the realization of the 2030 Agenda for Sustainable Development. Amidst the health, economic and social impacts of the pandemic, financing micro, small and medium enterprises (MSME) remains an important vehicle to stimulate growth and socio-economic development. Among other effects, the COVID-19 crisis has caused a slowdown in microfinance activities and thereby threatens the financial inclusion of low-income populations. In this context, Impact Investing can significantly contribute to the solution of societal issues. In response to the effects of pandemic, at Agents for Impact we focus on exploring new opportunities and identifying strategic partners around the globe to support local entrepreneurship, encourage women empowerment and contribute to sustainable development.

The 2020 Annual Impact Investor Survey of the Global Impact Investing Network (GIIN) estimates the impact investing market to cover USD 715 billion. In fact, globally more and more investors are shifting their capital into impact investing, i.e. investments pursuing not only a financial return, but also a positive environmental and/or social impact. Evidence-based impact measurement is not only of the core characteristics of impact investing, but also serves as a starting point for impact management. Yet, due to its multidimensionality and complexity impact measurement poses a challenge to investors and investees.

As impact investors have to demonstrate the social and/or environmental impact of their investments (especially financial institutions subject to the EU Sustainable Finance Disclosure Regulation, SFDR), they also need an enhanced sustainability measurement, which is clear, reliable, quantifiable & comparable. Consequently, the financial sector is increasingly seeking data and evidence from their investees. In order to source funding from international impact-oriented investors, investees (such as microfinance institutions/MFIs) are well advised to provide evidence regarding their sustainability performance. Besides a roadmap towards a more prosperous and sustainable world by 2030, the SDGs are also offering a positive, common language advocating for social and environmental issues. This is where impact measurement comes into play to assess the status quo and pave the way to create even more positive impact.

As mentioned above, further capital needs to be mobilised to address the prevalent global challenges (such as climate change, persisting inequalities and a sustainable COVID-19 recovery) and finance the SDGs. In order to further strengthen the German Impact Investing ecosystem, we joined the Federal (German) Initiative Impact Investing (https://bundesinitiative-impact-investing.de/) as member and are co-leading its initiative “Impact Measurement & Management” (together with PHINEO) as a platform for impact practitioners to facilitate discussions about impact measurement approaches as enabler towards an impact-oriented economy and exchange of best practices.

Close Panel

You Might Also Like

AFI discusses definitions and dimensions of impact investing

Afi participates at the expert discussion of the Federal Initiative of Impact Investing

AfI participates in the “Impact Measurement & Impact Management” workshop