Works Beyond Financing and Investment

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Chiao-Husan Liu

Chiao-Husan Liu




TIAS School for Business and Society

TIAS School for Business and Society


Mirjam Minderman

Mirjam Minderman

Global Goals

8. Decent Work and Economic Growth 10. Reduced Inequalities 13. Climate Action

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The company is a development bank and the majority shareholder is the Dutch government, holding a 51% stake. FMO works beyond financing and investment. It not only helps its clients to develop sustainable business strategies through inclusive innovation but also evaluates the impact of their behaviors (financing or investment) on the environment and society. Demonstrating a commitment to the 8th, 10th, and 13th sustainability goals, FMO provides its clients and investors the financing or return requirements as well as an opportunity to participate in “doing good”. MASSIF is one of the examples, which emphasizes innovation and its impacts on business, social, and environmental perspectives.


MASSIF, Dutch government fund, is managed by FMO and cooperates with financial intermediates, such as local banks or microfinance institutions (MFIs), which provide financial services such as bank accounts, savings products, and loan products for small, medium, and micro-entrepreneurs in low- and middle-income countries, and includes four investment themes:

● Unbanked: the lowest financial penetration rate and micro, small and medium-sized enterprises in fragile countries (MSME).

● Agriculture and rural livelihoods: small businesses and agricultural value chains in rural areas to improve the livelihoods of these communities.

● Women-owned businesses and young entrepreneurs: creating opportunities and promoting gender equality.

● Inclusive business innovation: access to basic goods and services.

During the interview with FMO, we were deeply impressed by its innovation, especially inclusive innovation. Inclusive innovation aims to create new products or operating methods with companies. It can be a product, service, value chain, or even a new business model. And such innovation will eventually bring influence beyond the commodity itself. For example, MASSIF invested in local financial institutions in Nigeria, Nigeria, Zimbabwe, and Myanmar, countries which are in challenging situations and limited to access to financial services. However, MASSIF invested in local financial intermediaries to improve the accessibility of banking services to locals and to innovate in operating methods. It can be expected that as accessibility improves, the operations of local SMEs and households will also improve.

Works Beyond Financing and Investment


The core goal of FMO is to use corporate and social responsibility methods to enable 9 billion people to live better in 2050. For this reason, FMO often selects countries with relatively backward development conditions to provide financing services. Because of structural reasons, companies in these countries are less competitive, which in turn affects the economic development of the country and society as a whole. In the long run, the welfare and development driven by these social enterprises can be extended beyond the profitability of the enterprise itself and employee welfare, to reduce the unemployment rate, increase social stability, and reduce the gap between the rich and the poor.

The inspiration is the observation that many people believe that there must be a mutually exclusive relationship between profit and the nature of public welfare, especially in industries such as investment banking. However, many studies have shown that the profitability of enterprises and the nature of public welfare are not mutually exclusive, and even can reinforce each other. Businesses who consciously contribute to public welfare are often above average in terms of profitability. FMO can also prove that this profit and public welfare are not mutually exclusive. Through the assessment of investment targets and the selection of investment portfolios, FMO maintains steady growth in its income.

Overall impact

Due to FMO's clear goals mentioned in the previous chapter, FMO also needs a corresponding measurement standard to judge its effectiveness. We can find in the interview that FMO uses the United Nations Development Indicators as one of its performance measures, and each case must be able to meet at least one SDG standard. In addition, FMO mainly focuses on the following three SDG indicators: reducing inequality (SDG10), climate action (SDG13), and decent work and economic growth (SDG8). For example, FMO invested in Plantations et Huileries du Colombia SA (PHC), a palm oil company operated by the Democratic Republic of Congo that was once shut down and lacked funds to restart due to the war. It is estimated that it will bring more than 10,000 job opportunities, health care, and education facilities to the local area. Through investment, FMO has brought local inequality reduction (SDG10), decent work, and economic growth (SDG8).

These investments not only inject capital into the company itself and help it restart operations but also through the operation of the company. Bringing stable development power and educational opportunities to surrounding communities, further affecting the development of workers and workers’ families, and ultimately achieving long-term regional turnover.

Business benefit

FMO offers not only medium and long-term loans at fixed and floated interest rate but syndicated loans by introducing commercial banks, investors, or other development finance institutions to raise larger funds in an efficient way, which creates agency fee to FMO. In addition, investment management is one of FMO’s core business activities. MASSIF, as mentioned in the previous chapter, focuses on small, micro, female, as well as young entrepreneurs, which results in creating job opportunities and mitigating gender inequality.

Based on the fact that FMO is a triple-A bank and the Dutch government is the majority shareholder, which helps to attract other investors to raise capital for impact investing. Jeroen Harteveld, MASSIF fund manager, indicated that “MASSIF is attractive for institutional investors who look for investment opportunities, which are not only profitable but also beneficial to society, because the role of the fund is to support SDGs with reasonable return.” With positive and sustainable strategies, MASSIF can continue to make profit and attract more investors to engage in SDGs.

Social and environmental benefit

In 2020, FMO invested €745 million in reducing inequalities as well as €466 million in greenlabelled projects, and its portfolios resulted in 427,489 job supported. The mission of FMO is beyond financing and investment. FMO works with long-term views, which means that it has a long-term relationship with its clients and investment projects. In general, FMO visits its clients and local stakeholders, and discusses the impact of financing, environment, as well as society together. According to the long-term perspective, FMO helps entrepreneurs to build strategies and achieve sustainable business based on local cultures and laws. FMO annual report showed that “in 2020, FMO’s current portfolio resulted in a yearly estimated 1,578,000 tons of carbon dioxide equivalent (tCO2e) avoided GHG emissions.” FMO engages in growing green portfolios, which focus on reducing greenhouse gas emission and improving resource efficiency. Issuing green bonds, for example, is one of the methods to strengthen the development of the green bond market and provide investors with opportunities to support FMO's green inclusive loans in developing markets. Therefore, Investors will receive a strong social impact return, such as greenhouse gas emission avoided, through FMO’s investments. “In 2020, FMO has issued another €500 million sustainability bond and a €135 million green bond,” FMO annual report showed.


Jeroen Harteveld, MASSIF fund manager

Photo of interviewee

Business information



The Hague, NL
Business Website:
Year Founded: 1970
Number of Employees: 501 to 1000

FMO is the Dutch entrepreneurial development bank. The mission is beyond financing: to empower entrepreneurs to build a better world.