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Lombard Odier

PRI reporting framework 2020

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You are in Direct - Inclusive Finance » PIIF Principle 1: Range of services

PIIF Principle 1: Range of services

IFD 07. Tracking microfinance investees portfolio

Possible action:

Develop and extend the range of financial services available to low-income populations. Extensions could include savings, loans, insurance, payment services, remittance facilities and pension plans.

07.1. Indicate if you track the percentage of your microfinance investees` portfolio that is in microenterprise loans.

07.2. Indicate if you track the percentage of your microfinance investees’ portfolio that is in loans for immediate household needs (i.e. consumer loans).

07.3. Indicate if you track the percentage of your investees` portfolio in housing loans.

07.4. Additional information. [Optional]

This information is reflective of our microfinance activities.


IFD 08. Support financial services beyond credit, compulsory savings and/or compulsory insurance

08.1. In your microfinance portfolio, indicate if you support the provision of financial services beyond credit, compulsory savings and/or compulsory insurance.

08.2. Indicate which of the following services you support:

Provide examples of how and what you support.

We select fund managers that invest in microfinance institutions whose products and services go far beyond microcredit. In fact, some microfinance institutions in the portfolio only provide financial services beyond credit.

For example, we finance Banco Ganadero in Bolivia offering voluntary savings products among other financial services. The bank had 284,000 active savers in 2019.

Indicate if you gather data regarding the percentage of financial service providers in your portfolio that are offering such a service.

Provide examples of how and what you support.

Annapurna in India is one of the MFIs we invest in indirectly. They offer customized insurance products for their clients - the poor, unbankable and marginalised population in India (mostly women) in rural and semi-rural areas.

Indicate if you gather data regarding the percentage of financial service providers in your portfolio that are offering such a service.

          Remittances and mobile banking
        

Provide examples of how and what you support.

One of our top holdings is TBC bank in Georgia that offers all its services online and through mobile banking.

Acleda Bank in Cambodia offers the possibility to pay bills and taxes through its application Acleda Toanchet to more than 1.45bn customers.

Through one of our MIIs, Social Alpha Bastion, we financed more than 6000 low-income student loans for higher education in 2018.

Indicate if you gather data regarding the percentage of financial service providers in your portfolio that are offering such a service.

          Financial education / training, technical assistance
        

Provide examples of how and what you support.

Acleda bank in Cambodia offers financial health checks to customers and micro, small and medium sized enterprises (MSMEs).

MBK in Indonesia offers financial training to their customers before they sign up for loans. MBK finances focuses 100% women and for 77% in rural areas.

Many of our MIIs also offer technical assistance to MSMEs besides financial services.

Indicate if you gather data regarding the percentage of financial service providers in your portfolio that are offering such a service.

08.3. Additional information. [Optional]

This information is reflective of our microfinance activities.


IFD 09. Support the introduction of services tailored to the ‘poor’, ‘very poor’ and ‘low income’

Possible action:

Encourage providers to introduce innovative products tailored to needs of low-income clients.

Encourage providers to expand their service offering to more remote areas and more vulnerable populations.

09.1. Indicate if you support the introduction of services tailored to the following client groups.

Client groups

Yes/No

The very poor

Describe how you support the introduction of such services.

We try to increase the proportion of ‘Tier 2 and Tier 3’ microfinance institutions in the portfolio, which are more likely to serve very poor communities. We invest in innovative models that use technology to lower operational costs and are able to reach out to very poor people.

Historically, the microfinance industry referenced a system of three or four "tiers" to differentiate between MFI types with the main indicator usually being the size. The MicroRate’s system, for example, is based on a three-tier structure that applies three simple, objective indicators that together act as proxies for an MFI’s level of maturity. The three indicators are sustainability (as determined by return on assets, ROA), size (total assets in USD), and transparency (level of regulation and reporting). Tier 2 and 3 MFIs are smaller institutions focused on microfinance and are more likely to serve very poor communities.

The poor

Describe how you support the introduction of such services.

We engage with our fund managers and encourage them to select MFIs that are reaching out to poor populations by designing products specifically targeting them. We monitor data such as average loan size, percentage of rural population, etc., that are proxies to assess how far the MFIs are going to reach poor populations. We favor investment in companies that specifically target poor populations.

Low income clients

Describe how you support the introduction of such services.

This is very much at the heart of our investment strategy. All the entities we invest in are meant to serve low-income communities.

Other, specify

          
        

09.2. Indicate if you collect data regarding the percentage or number of total active clients that are:

Rural

Urban

Female

09.3. Additional information.

This information is reflective of our microfinance activities.


IFD 10. Technical assistance to investees

Possible action:

Supporting retail providers.

10.1. Indicate if you provide technical assistance to your investees.

10.2. Additional information.

We provide technical assistance for part of the portfolio, most often through the MIIs we work with who are providing this technical assistance themselves.

This information is reflective of our microfinance activities.


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