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CDC Group plc

PRI reporting framework 2019

Export Public Responses

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IFD 01. Mission and investment objective

01.1. Indicate if you have a distinct mission and investment objective for your investment in inclusive finance.

01.2. Describe your inclusive finance mission and investment objective.

During 2018, CDC began developing impact frameworks per sector/sub-sector, including Financial Institutions. Our mission with respect to financial institutions and services is to invest in a variety of financial service providers through direct equity, debt and intermediaries to help build and develop financial sectors. By investing in a diversity of providers and enablers, we contribute to more inclusive financial sectors and stronger domestic markets for capital. We do this by supporting their delivery of relevant financial products and services, which are used by households and firms to manage risk, liquidity and investment. As part of this, two main objectives for were determined: more inclusive financial sectors and stronger domestic markets for capital. 

01.3. Additional information.

For the purposes of this report, we consider "inclusive finance" to be any direct investment into a company specialising in inclusive microfinance or SME lending, or any indirect investment into a fund specialising in these categories. 

IFD 02. Governance, management structures and processes

02.1. Provide a brief description of the governance and management structures and processes you have in place for your responsible investment activities and implementation of the PIIF.

CDC's management structures and governance for responsible investment are the same across all sectors. The E&S and BI teams have the primary responsibility for implementing CDC's Code of Responsible Investing. Meanwhile, the DI team quantifies the effect of CDC's investments at the individual investment level and at a portfolio level. As of the end of 2017, DI specialists are also embedded within each deal team, ensuring impact is incorporated into investment theses from an early stage.

On the Financial Institutions team, there are two embedded DI professionals who oversee and coordinate impact reporting and measurement. Each investment also has dedicated individuals from the E&S and BI teams. Governance at company level varies on a case by case basis but may include ESG Committees that oversee responsible investment activities and report on a quarterly basis. Issues of material concern to the institution will then be flagged to the board, senior management and/or the investment team.

IFD 03. Social targets

03.1. Indicate if you set social targets for your organisation, specific to inclusive finance.

03.2. Additional information.

Each investment has a development thesis that is formulated during investment analysis. CDC DI staff monitor progress against the development thesis and introduce and track customised measures of DI for specific investments. In addition, the E&S team will create an E&S Action Plan that creates a path for companies to bridge compliance gaps and add value. Finally, the Value Creation Strategies (VCS) teams will also work with companies on a case by case basis to integrate social goals, measured by targets and indicators, into planning. All of these indicators -- DI, E&S and VCS -- can include social targets. For example, one indicator could be "number of underserved households reached". Other indicators, such as "increasing revenue generated by clients' businesses", would be monitored by the investment team as both a financial and impact measure. The VCS team, which includes gender, might include indicators to assess women's economic empowerment and initiate grant-funded projects to deliver training and support to achieve these goals.

IFD 04. Percentage in equity, debt and guarantees (Private)

IFD 05. Percentage in microfinance and/or SME finance (Private)

IFD 06. Geographical spread of microfinance investments (Private)