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Microfinance – Header image (photo)


Impact measures

Triodos Investment Management’s specialised microfinance funds provided finance to 110 microfinance institutions (2012: 99), banks and other financial vehicles, in 44 countries (2012: 45), serving 7.9 million savers (2012: 6.4 million), and 8.4 million borrowing clients (2012: 6.9 million), in 2013.

Microfinance – Impact measures (graphic)


The evidence of the impact of our microfinance activity is drawn from Triodos Investment Management’s Emerging Markets Sustainability Management System. This information is based on detailed quarterly reports by the microfinance institutions and banks in the portfolio, annual reviews, and on-site visits.

The ‘Impact per customer’ calculations used throughout the annual report are made on the basis of the average deposit per customer across its five branches. This is then matched with the same proportion of Triodos Bank’s total impact in a given sector. There were a total of 517,000 customers at the end of 2013.

Our vision and activities

Microfinance lending

Microfinance lending by region

Microfinance – Lending by region (pie chart)

Our vision

Triodos Bank has been one of the leading investors in the microfinance sector since making its first investments in the industry in 1994. We recognised that sustainable development, and addressing inequality, exclusion and poverty issues in particular, was a global issue and have been applying our expertise in the inclusive finance sector to address these international challenges ever since.

Over the past ten years we have seen microfinance rapidly evolve and expand. Many national governments across all continents have come to recognize the importance of building inclusive financial sectors – where the majority of people have access to financial services. The financial inclusion gap has appeared on the agenda of the United Nations and G20, for example. Increasingly, investors have recognized the potential for social and financial returns from microfinance, and direct funding towards it.

As an investor we can influence the direction the inclusive finance industry takes. We share this responsibility with everyone involved in the value chain – investors, microfinance institutions, banks and other stakeholders – to understand, acknowledge and act in the interests of clients; clients, who are typically living on low-incomes and constrained by limited financial knowledge, power and influence. Focusing on the interests of these individuals and their families is the only way to achieve long term sustainable financial results.

To help shape an inclusive financial services industry that keeps the client’s interests at its core, a group of investors, including Triodos Investment Management, worked together to draft Principles for Investors in Inclusive Finance. These investors believe that specific principles for investors in inclusive finance will strengthen the movement towards responsible finance. The principles have been developed with a broad group of stakeholders including UNPRI (United Nations Principles for Responsible Investment Initiative) and were launched in January, 2011.

Triodos Bank supports the sector in other ways too; it recognises that we live in an interconnected world, where changes in one country – such as economic crises – can have a profound impact on the other side of the globe. These connections also present enormous opportunities, so Triodos Bank co-founded the Global Alliance for Banking on Values, a network of banks promoting the use of finance to deliver sustainable development for unserved people, communities and the environment.

Case study

ACLEDA Bank in Cambodia

Microfinance – Case study ACLEDA Bank in Cambodia (photo)

For and by refugees

ACLEDA was founded in 1993 as a microcredit NGO for people returning to the country from Thai refugee camps. Although having no banking experience, co-founder and CEO In Channy, also a refugee, was determined to set up and run a bank for the Cambodian rural population. At that time the infrastructure in Cambodia was completely wiped out after the Pol Pot’s regime. There was widespread poverty, millions of people were killed and others were traumatised. The country had a cash-based economy; there was no adequate legal system.

Trust and anti-corruption

It was in this very challenging environment that ACLEDA started its operations, with the aid of a number of international donor organisations. One of the things ACLEDA had to deal with was zero financial literacy; there was no trust of banks and no perception of what banks could offer. A strong focus of ACLEDA was and still is on building trust among its clients.

From the beginning it made it clear there was a ‘no corruption’ policy and this is something which still stands today. Today if you ask a student in Cambodia where they want to work, they say ACLEDA Bank, because it has such an impressively transparent culture. Young Cambodians see what corruption is doing to their country and are attracted by ACLEDA Bank’s ideals. It also has had a positive knock-on effect on the rest of the country’s financial sector.

Becoming a regulated financial institution

Triodos Investment Management came in contact with ACLEDA in 1999. The organisation had developed well and showed the ability to operate at a profit. At that time ACLEDA was in the transformation process of becoming a specialised licensed bank. With this license, ACLEDA could broaden their products and services, including savings products. This would meet the needs of its clients and provide ACLEDA with local funding. Also – true to its mission – ACLEDA wanted to expand further and set up a network to cover all of Cambodia’s provinces and cities.

First private investor: Triodos Sustainable Finance Foundation

This next phase needed a new type of investor. Three IFIs (International Financial Institutions) and Triodos Sustainable Finance Foundation (formerly Triodos-Doen) – being the first private investor – became shareholders in 2000 when ACLEDA obtained a specialised bank license. In 2003 ACLEDA Bank Ltd became a fully-fledged commercial bank and changed its name to ACLEDA Bank Plc. Triodos Fair Share Fund (2003) and Triodos Microfinance Fund (2010) also joined as shareholders. A senior co-worker of Triodos Bank represents the funds in the Board of Directors, thereby bringing sustainable banking and expertise to the table.

Rapid development

Today, ACLEDA Bank is the largest bank in Cambodia in terms of assets. It expanded its products range, established a nationwide network of 238 branches, opened ATMS and trailblazed innovation such as mobile phone banking and is gradually moving into SME lending. At year-end 2013 the bank served 335,627 borrowers and 1,105,167 savers; it employed 9,451 staff. It has also established a bank in Laos in 2008, where it is amongst the top private commercial banks, and a microfinance company in Myanmar in 2012, where it is among the few sizeable institutions with an approved microfinance license.

Triodos’ relationship with ACLEDA Bank shows our long-term focus and commitment to supporting financial institutions to achieve the next level of development. For us it has been truly exciting to have been closely involved in ACLEDA Bank’s journey from a small NGO to one of the most renowned banks in emerging markets to date, now that ACLEDA Bank Plc has achieved a level of maturity as a fully-fledged bank, in terms of its outreach, governance, risk management and performance, Triodos Investment Management decided to sell close to half of the 12.25% equity stake to new strategic investor ORIX Corporation, a Japan-based financial services group. This sale was completed in February 2014. Triodos Investment Management will continue to be involved through a minority shareholding and maintain its board position.


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