Letter from the MB of the Fund Manager
Without a doubt, 2020 has been one of the most challenging years for FMO and its customers. Amid the economic and social fall-out of the pandemic, the state funds under management by FMO played an important role in ensuring that our customers could stay afloat. We look back with satisfaction on our ability to deploy all tools at our disposal to keep the pipelines on track.
In 2021, substantial challenges and uncertainties remain. The pandemic aggravates existing challenges related to climate change, the deepening inequality-crisis and macro-economic precariousness. The public funds and facilities under management by FMO will continue to play their countercyclical role, generate impact on the ground and contribute to the creation of markets in which private finance can flow to those areas where it is most needed.
The COVID-19 pandemic affected our financial intermediate customers and their end-beneficiaries, the micro, small and medium sized enterprises. The impact varies per continent and between countries but overall, we have seen non-performing loans increasing, fair value losses in our equity investments and businesses generally adversely affected. We increased our monitoring and drafted a response program with the support of the Ministry that can provide flexible finance solutions to our portfolio customers under the MASSIF mandate. The expected surge in liquidity requests did not materialize in 2020 although we did adjust terms on several outstanding facilities and waived related covenant breaches. Through our capacity development program virtual knowledge sessions have been organized for customers and emergency grants were provided enabling acquisition of protective gear or develop communication tools.
We also noted resilience, the continuation of business activities and even innovation related to digital financial services. Looking beyond this year we expect the effects of COVID-19 to become more financially apparent as moratoria and regulatory interventions will expire. MASSIF has taken measures like engaging with partners to keep providing access to finance to businesses in fragile states, to support female entrepreneurs, youth and to spur innovation.
We thank all our stakeholders for their continuous support, including our customers and investors, the Dutch Ministries of Finance and Foreign Affairs, the NGOs that help us to improve and our colleagues for giving their best every day.
The Hague, 29 April 2021
On behalf of the Management Board
Linda Broekhuizen, Chief Executive Officer, a.i.
Fatoumata Bouaré, Chief Risk and Finance Officer
Huib-Jan de Ruijter, Chief Investment Officer, a.i.