A new $50M investment fund to help achieve sustainable development goals

A new $50M investment fund to help achieve sustainable development goals

November 5, 2020

Active in impact investing for over 20 years, DID is expanding its commitment by creating a private $50M investment capital fund. DID's President and Chief Executive Officer, Gerardo Almaguer, explains us why the innovative initiative is being introduced, and how it works.

What objectives will Aequitas have?

The main goal is to focus on financial inclusion to strengthen gender equality, the fight against climate change and support achievement of other Sustainable Development Goals (SDGs).

Why does financial inclusion matter so much?

From our perspective, which is based on the more than 600 projects we have carried out over the last 50 years, better access to financial services not only contributes to a population’s autonomy and prosperity, but also reduces inequality and enhances food security, economic growth and job creation, for example.

Today, 1.7 billion adults across the globe, the majority of whom are women, still don't have access to a bank account. Access to financing is also generally lacking among small business owners and farmers, and among women in particular. These challenges are exacerbated by the fact that developing countries are hardest hit by climate change.

In this context, which is being compounded by COVID, Aequitas will help foster the inclusion and development of marginalized populations, as well as supporting a sustainable economic recovery.

What will the fund be used for?

Our ambition is to make high-quality investments with a big social impact by providing the inclusive finance sector with patient capital, prioritizing the small financial institutions that are too often neglected by large investment funds and aiming for a broad geographic reach that includes Africa, Latin America and Asia.

The fund will direct resources where they're likely to have the greatest possible impact, to support small institutions, particularly those in geographic areas that are poorly served, that focus on the sustainable inclusion of women and disadvantaged populations.

Investments from the fund may, in certain cases, be combined with technical assistance, which will enhance their impact on capacity building and achieving the target development goals.

What do you think will come next?

We have big ambitions for the Aequitas fund! Our objective is to attract other institutional impact investors seeking returns that, first and foremost, focus on development. Desjardins has also committed to an additional $15M beyond its initial $50M commitment following the equity investment of the first external investor.

With this initiative, Desjardins confirms its leadership as an impact investor and hopes to see other public or private investors join forces with it by partnering in Aequitas. I see this as an excellent example of blended financing prompted by a private sector initiative.