Cordaid Investment Management, the asset management branch of development organization Cordaid, believes that impact investing is the next stage in development aid. In a unique approach, Cordaid Investments complements grants-based development aid with investments. The results of this approach are threefold. First, it maximizes the social impact, as investments leverage the available budgets and catalyze the effect of grants by further strengthening institutions. Second, it mitigates investment risks by combining investments with grants for capacity building. Cordaid's solid partnerships, firm on-the-ground presence, and deep understanding of the local complexities further reduce these risks. Last, investments rebalance the relationship between investee and investor, as beneficiaries turn into customers with demands and responsibilities. This adds to their level of independence and professionalism, enhancing the chances of attracting other (commercial) funders.
The Health Fund was created to improve the quality and quantity of health services in sub-Saharan Africa by providing health institutions with much-needed access to finance. After a pilot in 2014 and 2015 with health clinics in Burundi and Rwanda, the roll-out started in 2016 in Rwanda. The Health Fund specifically targets health institutions participating in Cordaid's Results Based Finance system. Healthcare providers receive their grant-based payments only after their outputs have been verified. However, the financial capacity of these health centers remains limited. Loans provided by the Health Fund enable recipients to access larger amounts of funding to further improve their services. Loans are typically used to purchase medical equipment or supplies, renovate or build facilities, and improve medical services.