Supporting microfinance institutions and social enterprises providing access to energy

Microfinance Solidaire (“MFS”) is a French simplified joint-stock company founded in July 2010 by the NGO Entrepreneurs du Monde (EdM). The mission of MFS is to support microfinance institutions and social enterprises providing access to energy that have little or no access to financing, and that have demonstrated an ability to implement a strong social mission. Most of the entities it supports were set up by EdM, which assists them until they are autonomous. In 2023, EdM supported 250,000 beneficiaries in 12 countries through 23 microfinance institutions (MFIs) and social enterprises. The main objective of MFS is to generate a social and environmental impact by tackling exclusion and social inequalities (by supporting access to financial services for people in highly vulnerable situations), and by tackling fuel poverty (by financing companies that enable the final beneficiaries to access modern, clean and economical energy). At year-end 2023, MFS was financing 20 entities (15 MFIs and 5 social enterprises providing access to energy) in 14 countries in Sub-Saharan Africa, Southeast Asia and Haiti. 404,629 final beneficiaries have access to the services of the partner MFIs and social enterprises of MFS. 88% of the clients are women, 49% live in rural areas, and the average loan allocation is €424. In addition, 37% of the loans allocated are dedicated to financing agricultural activities. 

The project involves the allocation by Proparco of a €2 million senior loan to Microfinance Solidaire (MFS) to support the development of its loan portfolio and enable it to meet the financing needs of the partner MFIs and social enterprises. The funds required for this project are provided by a grant from the 209 Facility for Fragile Countries. This project enables Proparco to contribute to strengthening AFD Group’s partnership with the EdM ecosystem (AFD’s loan to MFS expires in September 2024), and continue to support this major player in the social and solidarity economy (SSE). This project is in line with pillar 3 of Proparco’s strategy “Acting for greater equality”, in particular with regard to gender and socioeconomic inequalities.

The expected impacts of this financing are as follows:

• About 12,260 jobs supported over the next 5 years, mainly through the MFS financing (indirect jobs)
• Support for improved access to financing for more than 4,300 people. The project in particular supports the responsible financial inclusion policy of MFS, which targets microfinance institutions and social enterprises providing access to energy that aim to provide vulnerable people with access to financial services and clean energy for cooking and lighting. MFS regularly reviews the responsible practices of the entities financed  and their compliance with the client protection principles
• Contribution to gender equality through the commitment of MFS to finance MFIs and  social enterprises that mainly target women (88% of final beneficiaries)
• Support for economic development and strengthening the financial infrastructure in a context of fragile countries. For example, MFS operates in Haiti, Madagascar and Myanmar, as well as in Gulf of Guinea countries
• Support for financing the agriculture sector, which accounts for 37% of loans to the final beneficiaries. With the growing vulnerability of food security, in particular in the countries of operation in Sub-Saharan Africa, MFS aims to increase its financing to this sector.  

The project will thereby mainly contribute to the achievement of SDGs #1 (No poverty) #8 (Decent work and economic growth), and #10 (Reduced inequalities).