Performance on our strategy

In the first half of 2019, performance on our non-financial targets is mostly on track. Additional efforts, however, are needed to mobilize third-party funds (deeper relationships). For higher productivity, we are on track to deliver our projects but we are behind target on net profit due to the fluctuations of the US dollar and the (re)valuations of our equity portfolio.

Higher Impact Portfolio

Based on our performance in the first half of 2019 we are on track to achieve most of our higher impact targets. We measure our success in line with our core SDGs.

Decent Work and Economic Growth (SDG 8)

By creating or supporting jobs and strengthening local economies, we contribute to stability in underprivileged regions. In the first half year, we invested EUR 1 billion in developing and emerging markets of which EUR 586 million on FMO’s own books (H1 2018: EUR 724 million), EUR 49 million of funds managed on behalf of the Dutch government (H1 2018: EUR 27 million) and EUR 381 million of mobilized funds (H1 2018: EUR 278 million). In line with our strategy, approximately 60% of our investments went towards countries in Africa and Asia, while 16% of investments were made in countries in the European Neighborhood. Compared to last year, we made more equity investments, committing EUR 200 million (H1 2018: EUR 54 million) of which 70% related to direct and co-investments in line with our target to shift 60% of our equity portfolio towards these types of investments. We are, however, lagging in exits. We are exploring which assets we can sell to improve our internal rate of return.

Since 2014, FMO uses an input-output based impact model to calculate the estimated number of direct and indirect jobs supported through investments made using FMO’s own funds, funds we manage and funds we mobilized through others. This is expressed in Euros invested and measured at the time of contracting and provides the expected (or ex ante) impact of the total new investments made in a given year. We estimate that 227,000 jobs were supported through the investments made in the first half year of 2019, an increase compared to the same period last year (H1 2018: 175,000 jobs) due to a larger volume of mobilized funds and private equity investments.

Reduced Inequalities (SDG 10)

FMO labels investments to capture if and the extent to which they contribute towards reducing inequalities (RI). When the RI label applies to the investment, the level of ex ante impact is assigned to Least Developed Countries (LDCs) and/or inclusive business. Funds channeled towards LDCs, which according to the United Nations suffer severe structural impediments to sustainable development, reduce inequalities compared to higher income countries. Investing in inclusive business, meanwhile, reduces inequalities within countries by increasing access to goods, services, and livelihood opportunities on a commercially viable basis to people at the Base of the Pyramid (BoP). The BoP is defined as people who live on less than USD 8 per day in terms of purchasing power parity or who lack access to basic goods, services and sources of income. FMO’s inclusive business investments target the un(der)banked, the unconnected, youth, women, smallholder farmers and rural populations.

In 2019, FMO invested a total of EUR 241 million in reducing inequalities (H1 2018: EUR 237 million) of which EUR 150 million from FMO’s own books, EUR 25 million of funds managed on behalf of the Dutch government and EUR 66 million of mobilized funds. EUR 144 million contributed towards LDCs and EUR 98 million contributed towards inclusive business.

Examples include our recent equity investments in InCred and ftcash to increase access to financial services to the underbanked in India. By providing formal credit to underbanked (M)SMEs, individuals and through on-lending to MFIs/NBCFs, InCred supports inclusive economic growth. India has over 55 million MSMEs, which are leading contributors to the nation’s employment and GDP. Ftcash focuses on improving access to credit for informal micro merchants that are largely underserved. Ftcash uses a proprietary algorithm to analyze payments and alternative data for originating loans and deducts collections directly from merchants’ digital payments.

Climate Action (SDG 13)

FMO labels investments to capture their contribution to climate in terms of reducing greenhouse gas emissions, increasing resource efficiency, preserving and growing natural capital, and supporting climate adaptation. We base our decision to label an investment as green on criteria that are aligned with industry specific principles for climate mitigation, climate adaptation and other footprint reduction.

In 2019, FMO invested a total of EUR 340 million in green transactions (H1 2018: EUR 353 million), of which EUR 219 million from FMO’s own books, EUR 16 million of funds managed on behalf of the Dutch government and EUR 105 million of mobilized funds. Approximately 60% of the total volume was invested in solar, wind and hydro. These investments resulted in an estimated greenhouse gas avoidance of 238,000 tons CO2 equivalent, a decrease compared to the same period last year (H1 2018: 414,000 tons CO2 equivalent).

An example of a green transaction was the agreement signed by FMO with Scatec Solar to take a 40% equity stake in the 32 MW Kamianka project in Ukraine, which will provide more than 10,000 people with 100% green energy. FMO's equity stake was financed by the Access to Energy Fund, which FMO manages on behalf of the Dutch government. The project offers both positive climate impact and benefits for the local community, which fully aligns with our strategic ambitions.

ESG Performance

FMO actively engages with its clients to increase their environmental, social and governance standards. We monitor the ESG risks and performance of our high-risk clients using the ESG Performance Tracker (ESG-PT), which was first introduced in 2018. Each tracker contains a list of pre-defined ESG risks, based on the IFC Performance Standard and international best practice. It is used to identify ESG risks for clients and to categorize the level of exposure. For each relevant risk, we assess what the client is doing to mitigate that risk. Building on existing processes, the ESG-PT is initially completed at the Finance Proposal stage. At every Customer Credit Review and Large Change Request, the risks and performance are assessed and updated in the ESG-PT. This ensures we have baseline data and at least annual updates over the life of the investment. This allows us to see how a single client and the entire portfolio have improved their ESG risk management during the lifetime of an investment.

For steering purposes, we set a target on a sample of clients that we believe pose the highest ESG risk and that are within FMO’s span of control. For these clients, our target is that 90% of high-priority ESG risks are either fully compliant with our standards or actively on their way to compliance. For 2019, we identified 41 clients of which most are in our Energy, Agribusiness, Food & Water and Private Equity portfolio. In the first half of 2019, 14 clients and 106 applicable risks were assessed. None were reported unmitigated, which means that our ESG Target Performance was 100%. We further monitor the ESG performance of each individual client - within or outside the target sample - in line with the action plan agreed between FMO and our clients.

Deeper Relationships

Performance for the first half of 2019 suggests we are on track to deliver on target. However, we need to step up efforts to mobilize third parties.

Mobilized funds

Our efforts to crowd in more private capital towards projects with high development impact have resulted in EUR 381 million (H1 2018: EUR 278 million) of mobilized volume in the first half of 2019, of which EUR 233 million from private investors. Although FMO performed better compared to the same period last year, we still experience high liquidity in certain syndication markets among Development Finance Institutions in particular, and the resulting downward pressure on prices might crowd out private investors. FMO is looking to shift to other markets and clients, which could lead to fewer and smaller syndicated transactions.  

Public funds

A total of EUR 49 million was invested through government funds under FMO management. EUR 14 million was invested through the Access to Energy Fund, EUR 14 million through the Building Prospects fund and a further EUR 21 million through MASSIF. We also manage a Capacity Development (CD) program on behalf of the Dutch government. CD supports knowledge transfer and provision of technical expertise, especially around green and gender investments, support to smallholders and innovative opportunities like Fintech. In 2019, CD provided EUR 1.9 million of funding towards new projects. 

We reached several milestones in the first half of 2019. Following the renewal of the mandate for Building Prospects, with a focus on climate adaptation and resilience as well as gender equality, we partnered with impact investment hub Lady Agri to explore a business case for considering gender in agriculture investments. We hope this will be the start of a long-term partnership that will help us tailor our products to the needs of women.

In addition, we launched our first risk-sharing facility for Syrian refugees in Jordan through MASSIF, which will run as a pilot under the NASIRA program. NASIRA encourages financial institutions in the European Neighborhood and Sub-Saharan Africa to provide loans to young, female and/or migrant entrepreneurs for their (micro) business, thereby tackling one of the root causes of irregular migration. Until now, Jordanian banks have refrained from providing financing to Syrians living in Jordan, largely due to perceived high risks. Likewise, with a political solution to the Syrian crisis still pending, most Microfinance Institutions (MFIs) have remained on the sidelines.

Furthermore, we won the tender to manage the EUR 160 million Dutch Fund for Climate and Development (DFCD) in a consortium with SNV Netherlands Development Organization, World Wide Fund for Nature and Climate Fund Managers. This pioneering partnership of NGOs and financiers aims to help developing countries build climate resilient economies.

Dutch business

One of our priorities is to build relations with the Dutch business community in order to facilitate Dutch business-related investments in and exports to emerging markets and developing countries. In the first half of 2019, a total of EUR 17 million Dutch business-related investments were made (H1 2018: EUR 28 million). Half was made on FMO’s own book and half through the Building Prospects fund. Also, there were four new contracts signed under FMO’s project development facilities, of which two with WWF and one partnership facility with IFC. FMO will team up with these institutions to develop projects. An important milestone in FMO’s Dutch SME approach was the 12-year loan framework that was signed with Banco de Inversión y Comercio Exterior from Argentina to facilitate a more efficient way to support small transactions for Dutch (SME) exporters. Furthermore, the first Finture Solutions challenge was held in close collaboration with Rockstart. The aim of Finture Solution is to help scalable and innovative Dutch start-ups scale their business across emerging markets and create impact in the agri-food, renewable energy and water sectors. Out of 102 applicants five winners were selected and each received EUR 125,000 and support from FMO to further develop their ideas.

Employee engagement

FMO firmly believes it should practice what it preaches when it comes to the SDGs, for example with respect to Gender Equality (SDG 5). FMO has the ambition to be one of the leading organizations in the Netherlands, as well as among DFIs, in the area of diversity and inclusion. Diversity is one of our four corporate values. In 2019, we started reporting internally on 7 key performance indicators (KPIs) related to different gender aspects of the workforce: gender balance, recruitment, turnover, reward, bonuses, promotions and engagement. Per 30 June, these indicators show a positive picture. The workforce is equally distributed, with 49% women and 51% men. The other indicators show there is no bias in recruitment, turnover, promotions or bonuses. The gender-pay differences show a mixed picture of relatively small differences. In the highest salary scales (senior management), women earn 1% more than men. In the salary scales for senior officer and advisers, women earn 3% less than men, which can partly be explained by the higher average age of men in this category. 


FMO employee statistics: 7 Gender diversity & inclusiveness metrics





% women

1. Gender balance

Total number of employees per June 30, 2019






Employees in senior and middle management per June 30, 2019






2. Recruitment

Net growth January - June 2019 (Head Count)





3. Turnover

Staff turnover January - June 2019 (Head Count)





4. Reward

Gender pay gap based on simple average salary per group


(minus means average salary for women is lower)


Senior management (salary scale 13-15)



Middle management (salary scale 12)



Staff (salary scale 4-11)



5. Bonuses

% of bonus amount awarded over 2018





6. Promotions

Promotion ratio January - June 2019





7. Engagement

Engagement score based on latest survey (October 2018)





Other FMO employee statistics


June 30, 2019

December 31, 2018


Number of external employees




Total number of employees (internal and external)




% Non-Dutch employees




% Country of birth not NL




Number of nationalities (excl. NL)








Higher Productivity

Performance for the first half of 2019 with respect to higher productivity shows mixed results. We are on track to deliver on our project portfolio, but we are behind with respect to the financial performance of our equity portfolio.

Strategic projects

FMO manages a project portfolio aimed to improve efficiency and effectiveness to get our house in order and develop new propositions, segments for future growth and put key cornerstones in place for digital transformation.

For instance, we initiated the Financial & Economic Crime (FEC) program to improve our Know Your Customer (KYC) process, policies and procedures. At the beginning of the year, we adjusted the KYC Policy, Manual and Questionnaire. In May, we kicked-off a KYC remediation program to review 1,450 existing KYC files by the end of 2020 to meet the requirements of the Dutch central bank (DNB).

Financial performance

FMO recorded mixed results across loans and equity investments, our two main business activities. Overall net profit for the first half of 2019 amounts to EUR 58 million (H1 2018: EUR 124 million). The main drivers for this net result are:

    • An improvement in the regular income primarily due to continued strong performance in the loan portfolio, leading to a net interest income of EUR 105 million (H1: 2018 EUR 99 million);

    • An increase in operating expenses by EUR 8 million due to increased staff costs resulting from the recruitment of new staff and contractors. Also, additional project expenses were incurred related to the implementation of strategic initiatives;

    • Impairments on the loan portfolio returned to normalized levels (H1 2019: EUR 14 million). In 2018 we reported a net release of EUR 15 million, which was the result of a combination of releases on stage 3 provisions as well as recoveries on credit impaired exposures. Overall the non-performing loans portfolio improved to 7.3% (YE 2018: 8.1%);

    • Our private equity results, including currency effects, amounted to a EUR 3 million loss in 2019 (H1 2018: EUR 44 million gain):

      • EUR/USD FX effects EUR 4 million gain (H1 2018: EUR 29 million gain). The average appreciation of the EUR/USD in 2018 led to a material gain, whilst the volatility in the first half of 2019 was less significant;

      • Depreciation portfolio including local currency effects EUR 7 million loss (H1 2018: EUR 15 million gain). Our investments in Turkey, South Africa, Nigeria and India have been impacted by the appreciation of the USD against local currencies. Also, individual direct investments in Pakistan and Nigeria have underperformed. Finally, we find that the valuation of our investments in the financial sector, of which the valuation is based on global benchmarks, were impacted as a result of a downward trend in this sector;

    • Lower corporate tax charge in 2019 aligns with the decrease in the gross result.

The CET-1 ratio per June 2019 is 24.0% compared to 24.6% at year-end 2018. In 2019, the risk weighted assets have increased due to the appreciation of the EUR/USD exchange rate as well as the acquisition of new investments in the equity portfolio. This is having a downward effect on the CET-1 ratio. The net profit for H1 2019 is not included in the calculation of the CET-1 ratio. If added, the CET-1 ratio would be approximately 0.5% higher.