Microfinance, the provision of loans and other financial services to low income families and small business owners, is an effective way of helping people to help themselves. It makes an important contribution to fighting poverty and increasing financial inclusion around the world. Credit Suisse has been engaged in microfinance for many years through the development of innovative solutions to link the top with the base of the income pyramid and enabling people to access financial sources.
Some two billion people, more than a third of the world’s adult population, are financially excluded according to the World Bank. Access to capital is vital for economic activity as it enables people to afford education or healthcare, as well as build up and run their own businesses. In the field of microfinance and impact investing, Credit Suisse was the first major bank to leverage both its financing and management expertise by combining the bank’s corporate citizenship and core business. The growth and evolution of the microfinance industry is closely linked to the area of investment referred to impact investing.
Impact investing is about actively placing private capital in enterprises that generate a positive social and/or environmental impact alongside financial returns. Credit Suisse has been a leader and innovator in impact investing since 2002, when it co-founded social investment firm responsAbility Investments AG. One of the largest sectors of impact investing is microfinance. Since 2002, Credit Suisse, in partnership with responsAbility and other impact asset managers have offered has offered its clients the opportunity to invest in debt and equity investment products which provide microfinance institutions (MFIs) with the capital they need to offer financial services to people such as microentrepreneurs, who face difficulties in accessing credit to grow their businesses.