Reduced inequalities
Through its strategies and operations, BIO seeks to foster a more equitable world and address disparities across various dimensions. Its contribution to reducing inequalities is a central subject, and was extensively analysed and investigated by the last External Case Study Evaluation.
SDG10 calls for reducing inequalities in income among and within countries, in addition to targeting inequalities in other domains such as age, sex, disability, race, ethnicity, origin, religion, and economic status. Inequalities continue to be a significant concern for developing countries despite progress and efforts to narrow disparities of opportunity, income, and power. By reducing inequalities, BIO also plays a role in achieving a wider range of SDGs.
BIO seeks to address income inequalities between countries by investing in Least Developed Countries (LDCs) and fragile states, by enabling economic structural transformations stimulating employment, private sector growth, and productivity. BIO also targets businesses specifically designed to empower low-income populations. This includes microfinance institutions, smallholder finance, agribusiness focused on smallholder inclusion, gender-smart investments, and providers of off-grid power and solar home systems. For instance: Laiterie du Berger, Afrigreen Debt Impact Fund, Alterfin, etc.
By promoting sustainable and fair employment creation, BIO ensures decent working conditions and safeguards the basic rights of workers
BIO tackles inequality within countries using a two-pronged approach: triggering economic growth across low-income settings while directly targeting the bottom 40% of the population, particularly through inclusive businesses.
BIO promotes equal opportunity and protections for all stakeholders impacted by its investments. This includes ensuring the well-being of vulnerable consumers and communities. To achieve this, BIO implements strict requirements regarding client protection, community health and safety, and responsible land acquisition and resettlement practices.
Four of the 22 investment projects that were approved in 2023 were in LDCs, and 12 had financial inclusion, rural development or access to basic goods and services as a primary objective. In BIO's 2022 portfolio, 24 out of 67 directly funded companies and 161 out of 594 indirectly funded companies are located in LDCs.
Aldea coffee
Aldea is a producer-centric association in Nicaragua, i.e. an organisation that is primarily concerned with the needs, interests, and advancement of its members. It empowers 13,042 small agricultural producers to achieve economic and social development through innovation and technology.
Aldea offers a comprehensive array of services, including working capital loans, agricultural inputs, coffee commercialisation, and technical assistance, specifically supporting 3,280 coffee producers.
BIO's investment empowers up to 30,000 smallholder coffee farmers, fostering economic growth and generating positive spillover effects for the local economy. This initiative has the potential to significantly increase profit margins for these producers while promoting sustainable practices, creating a win-win for both farmers and the environment.
Alterfin
Alterfin is a social financier that aims to improve the livelihood and overall living conditions of socially and economically disadvantaged people and communities, mainly in rural areas, in low- and middle-income countries worldwide. Alterfin prioritises financial inclusion by dedicating 37% of its portfolio to supporting rural development and smallholder farmers through microfinance institutions (MFIs).
After initial investments in 2002 and 2020, BIO issued a follow-on investment of USD 5 million to the company in 2023.
- Financial inclusion: Alterfin has supported financing for microfinance institutions that prioritise underserved and vulnerable populations. In 2022 alone, they funded 84 MFIs, reaching over 4 million borrowers (and their families). Notably, 53% were microenterprises, 23% were smallholder farmers, and over 60% were women-led.
- Rural development: Alterfin’s investments have supported direct jobs (7,000 in 2022) and market opportunities (for 136,000 smallholder farmers) in rural areas. This is achieved through their focus on sustainable smallholder agriculture, with USD 63.6 million dedicated to this sector.
- Sustainability: Alterfin promotes Fairtrade practices (73% of Alterfin's agricultural partners are Fairtrade certified) and encourages other international sustainability certifications.
Cerise+SPTF
That is why, over 20 years ago, Cerise+SPTF built the first version of the Social Performance Indicators (SPI) tool in collaboration with purpose-driven organisations from the inclusive finance industry. In 2022, BIO helped them update it.
SPI Online empowers a wide range of stakeholders, including financial service providers, impact investors, regulators, auditors, and social businesses, to manage their social and environmental performance. SPI Online ensures rigorous social and environmental impact measurement.
This standardised approach:
- Prevents greenwashing: Consistent measurement reduces the risk of misleading claims about social and environmental impact.
- Facilitates meaningful discussions: Standardised data enable effective communication on what truly works in ESG and impact investing.
In 2024, BIO partnered with Cerise+SPTF to organise a workshop in Abidjan on Environmental and Social Performance Management Systems (ESPMS) for MFI managers in Francophone Africa.
22 representatives from 16 MFIs across 9 countries participated in this interactive workshop.
By fostering collaboration and knowledge exchange, the workshop aimed to equip MFI managers with the tools and best practices necessary to implement robust ESPMS.