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ACTIAM

PRI reporting framework 2017

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You are in Direct - Inclusive Finance » PIIF Principle 3: Fair treatment

PIIF Principle 3: Fair treatment

IFD 14. Investment in local currency

Possible action:

Provide financing in an appropriate currency and tenor.

14.1. In relation to your direct portfolio in debt, indicate if you provide investment in local currency.

14.2. Indicate what percentage of your direct portfolio in debt is invested in the investee’s local currency.

14.3. Additional information. [Optional]

For the Microfinance Fund (question above) exposure in local currencies significantly increased from practically non-existing due to macro-economic conditions in 2015 to 21% in 2016. For the SME Finance Fund, we generally witness demand for US Dollar denominated loans and <10% of the portfolio is in local currency at the moment. Furthermore, the portfolio mandates provide the following restrictions: The maximum percentage of the Fund’s aggregate Capital Commitments or portfolio (whichever is greater) allocated to Fund Investments denominated in a specific currency not being the Euro or US$ is 10%. And the combined maximum percentage of the Fund’s aggregate Capital Commitments or portfolio (whichever is greater) allocated to Fund Investments categorized as debt investments denominated in currencies other than the Euro or US$ is 50% for microfinance and 40% for SME finane, after giving effect to all hedging transactions in respect of such debt investments.


IFD 15. Average maturity of debt investments

Possible action:

Provide financing in an appropriate currency and tenor. 

Actively support the building of a diversified funding base.

15.1. In relation to your direct portfolio in debt, indicate what percentage have a maturity (from the point of investment) of the specified duration:

15.2. Indicate if you have a set limit regarding the maximum fixed income investment exposure of the investees in which you invest. [Optional]

15.3. Additional information. [Optional]

For microfinance a tenor of 2 - 3 years and for SME finance a tenor of 3 - 5 years.


IFD 16. Average holding period of equity investments (Not Applicable)


IFD 17. Terms and conditions

Possible action:

Negotiate terms and conditions that are transparent, fair and reasonable, including fair break-up clauses.

17.1. Indicate if you adopt the following practices:

Indicate if these practices are formalised in written policies and procedures.

Describe your process.

          Please refer to IFD 17.2 for additional information.
        

Indicate if these practices are formalised in written policies and procedures.

Describe your process.

          Please refer to IFD 17.2 for additional information.
        

Indicate if these practices are formalised in written policies and procedures.

Indicate if these practices are formalised in written policies and procedures.

Indicate if these practices are formalised in written policies and procedures.

Indicate if these practices are formalised in written policies and procedures.

17.2. Additional information. [Optional]

During the due diligence process and in the terms sheet preceding the loan agreement the terms and covenants are explicitly mentioned and discussed with the investee.

The investees are monitored on a monthly basis and their portfolio development is proactively watched. In case of signals of issues the investee is asked to elaborate on the situation and we seek how to support the MFI in solving  the issues. A possible outcome could be a restructuring to give the MFI time to recover.


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