Microfinance investments pursue the double-bottom-line objective of producing financial returns while creating social impact, and investors assess social performance as well as financial performance of the microfinance investment vehicles in their portfolio.
At BlueOrchard, social performance assessment is an integrated part of the investment process and the company reviews its Social Performance Objectives on an annual basis. Under the leadership of Lisa Sherk, Head of Social Performance Management, BlueOrchard has defined the relevant focus areas and targets for the near future:
1. Enhance the company’s social performance assessment tools and staff training on social performance management
2. Continue to innovate and develop products and services that
a. are ever more appropriate for microfinance institutions and their clients
b. have specific ESG objectives
c. include technical assistance to microfinance institutions
3. Continue active participation in industry-wide initiatives that contribute to responsible microfinance including funding
of research projects on client protection, overindebtedness studies, etc.
4. Support investee microfinance institutions in their efforts to improve their social performance and impact and to
share experiences and best practices amongst peers
5. Define and implement a company-wide environmental policy
6. Maintain high standards of timely and relevant reporting on social performance issues to investors
7. Explore initiatives to measure social impact together with microfinance institutions, practitioners and academic
researchers
While setting these targets is under the responsibility of BlueOrchard’s management team, every member of the organization is charged with their implementation. This involves most notably the team of 22 investment officers who conduct social due diligence on all investee microfinance institutions and support them in their social performance efforts through knowledgesharing and consulting. Based on the experience and feedback from investment officers, social performance scorecards are continuously enhanced, appropriate financing terms defined and research initiatives identified.
As the microfinance landscape evolves and the industry continues on its growth path, social performance management is essential to ensure sustainable development. “We owe it to our stakeholders to remain true to the mission of furthering financial inclusion,” states Lisa Sherk, “and the definition of social performance objectives is key to maintain our focus on the underlying purpose of this endeavor: to improve the well-being of microfinance clients. At BlueOrchard we strive to meet these goals through our daily activities, and commit to keeping our investors informed of our progress.
BlueOrchard Finance S.A. was founded in 2001 as the first commercial manager of microfinance debt investments worldwide. To this day, the company has deployed in excess of USD 2bn in loans to microfinance institutions, providing access to microcredit to over 30 million individuals across 50 countries.
Investors in BlueOrchard-managed funds include private and institutional investors, supranational institutions as well as renowned foundations. The company employs highly experienced staff with backgrounds in traditional and development finance including 22 investment professionals in Geneva, Zurich, Luxembourg, Lima, Phnom Penh, Bishkek and Johannesburg