Microfinance is an important way for people and small and medium enterprises (SMEs) in developing countries to gain access to financial services, often for the first time. It’s important to ING, as we aim to contribute to the socioeconomic development of communities both near and far, both in countries where we operate and where we don’t.
ING has increased our funding for microfinance over the last years, offering our technical and financial expertise to the microfinance sector worldwide.
But the world keeps changing, also in the microfinance sector. ‘Digital inclusion’, or connecting those who don’t yet use banking services at all to the mainstream financial infrastructure, is now possible with financial technology such as blockchain.
A second major development is that investors are lending more often to SMEs, rather than microenterprises. See more on this in our ‘Billion to Gain’ research below.
These developments have inspired ING to increase our social impact. Therefore, ING Impact Finance includes a greater focus on innovation through technology and new business models.
Impact Finance allows us to invest in projects that generate measurable social and environmental impact – as well as a financial return. This can be both in emerging and developed markets, and can target a range of returns from below-market to market rate. Integrating Impact Finance into our mainstream businesses will generate more funds, capacity and knowledge.
We believe this will add much more value to the socioeconomic development of the poor as well as contribute to the United Nations’ Sustainable Development Goals, specifically SDG 8 – decent work and economic growth.
Read more about how ING Groenbank finances social and environmental impact.
What is A Billion to Gain?
A Billion to Gain aims to improve the microfinance sector by addressing the opportunities and challenges it faces. The research report and accompanying conference has now been held for the sixth time, covering a range of microfinance topics. It’s an initiative of ING, with support from the Netherlands Platform for Inclusive Finance (NpM).
A Billion to Gain? – History
A Billion to Gain? 2014
By examining the different results of microfinance services on clients, the 2014 edition of A Billion to Gain? offered the Dutch microfinance sector a framework to track their goal of improving their clients’ lives. The client and their family was the core focus of this report, where readers were guided through aspects of clients’ lives and the influence of microfinance.
A Billion to Gain? 2012: Dutch Contributions to the Microfinance Sector
The fourth report discusses a variety of opportunities and challenges in the microfinance sector that can be used to refine social and commercial strategies, improving contributions to the sector. The report gives a comprehensive analysis of Dutch funders in the sector and their microfinance activities, as represented by the 16 NpM members. It investigates whether Dutch donors, Microfinance Investment Funds (MIVs) and investors differ significantly in the type of microfinance institutions (MFIs) they fund. And if they do, whether it results in differences in social and financial performance?
A Billion to Gain? 2008: The next phase
The third edition gave an update of financial institutions’ activities and plans and recent major developments and trends in global financial institutions’ involvement in the microfinance sector. It is argued that the role of global financial institutions lies in providing increased funding, better financial structures and innovation power to develop new products (e.g. micro-insurance, remittances), delivery channels and systems for MFIs. Global banks can have a significant impact on MFIs and related organisations by being involved in microfinance, eventually also on the end-users. For the end-users, inclusive finance is an important target.
A Billion to Gain? 2006: An update
The second edition of the A Billion to Gain? series provides an update of the first edition. The paper gives an update of international banks’ activities and plans regarding microfinance, and it describes how international banks can contribute to provide financial services to the poor.
A Billion to Gain? 2006: A study on global financial institutions and microfinance
The first report came out in 2006 and aimed to study the initiative international banks are taking, and how this relates to the activities of domestic banks, MFIs and NGOs. International banks and MFIs seem to have complementary roles, while sharing a common interest in mutual collaboration. Combining corporate citizenship and concrete commercial objectives appears to be an effective way to make long-term investments in the microfinance sector, which creates opportunities for commercial banks.