Letter from the ExCo of the Fund Manager

Dear reader,

2019 was a rough year for global development cooperation and climate action. The Madrid climate conference ended in an agreement to disagree and postpone a future consensus. Despite scientific reports that the window of opportunity for meaningful climate action is closing, nations have not been able to muster the strength to act as one community in charge of saving the global commons.

Against this backdrop of multilateral strain and rising systemic risks, the global community continued its efforts to attain the goals of the 2030-Agenda. Despite signs of progress, investments needed to overcome the USD 2.5 trillion financing gap are still lagging, particularly in fragile states, in climate adaptation and in the human development sectors such as health and education. At the time of publication of this report, these concerns are compounded by the COVID-19 pandemic in the first months of 2020. The expectation is that the world will face the worst recession since the Great Depression, due to the abrupt halt in economic activity in the last months. More than ever, there is a need for channels such as the FMO-managed state funds to play a counter-cyclical role and help address the global challenges of inequality and climate change.

Close to 1.7 billion adults worldwide are still unbanked and the number of forcibly displaced people remains worryingly high due to political conflicts and tensions, security threats and climate disasters. The Financial Inclusion sector has a role to play in solving these problems. MASSIF is the Dutch government’s fund for Financial Inclusion. Its strategy, The Next Frontier, steers financial inclusion towards the unbanked population, focusing on women-, youth- and refugee entrepreneurs, rural areas and inclusive business. The fund invested in 23 new transactions in 2019; a record number for MASSIF. Through our EUR 545 million portfolio, we support 7,600,786 microloans and 112,300 (M)SME loans. Those included 61% of women-owned and 67% of rural MSMEs.

Our involvement in unbanked and fragile states grew in 2019, with new clients in Sierra Leone, Myanmar, and Palestine. At a time of political and economic unrest, MASSIF continued supporting clients by providing stable and longer-term funding in Nicaragua. Finally, MASSIF provided a risk sharing facility with capacity development to finance Syrian refugee entrepreneurs in Jordan as part of the NASIRA program.

We thank all our stakeholders for their continuous support, including our clients and investors, the Dutch Ministry of Foreign Affairs, the NGOs that help us to improve and our colleagues for giving their best every day.

The Hague, 8 May 2020

On behalf of the Executive Committee

Fatoumata Bouaré, Chief Risk & Finance Officer
Linda Broekhuizen, Chief Investment Officer
Peter van Mierlo, Chief Executive Officer