Posts for Enclude Blog

Posted on March 31, 2014

Posted by: Geert Jan Schuite, Global Group Lead, Outcomes Management & Strategy

green performanceFinancial institutions are becoming increasingly interested in integrating Environmental and Social Performance (ESP) measurement into their regular portfolio management practices. By shifting to a triple bottom-line approach, in which social and environmental impact are prioritised alongside profits, financial institutions boost their public image, gain access to new impact-oriented sources of capital, and mitigate risks associated with limited ESP oversight. Yet for many institutions in emerging and developing economies, it is a challenge to make the business case for a triple bottom-line approach and building the capacity needed to meet new environmental and social expectations.

Responding to this demand, Enclude was tasked by Hivos, a Dutch development organisation, with developing a Green Performance Agenda (GPA) guide.  The GPA guide is a user-friendly, interactive, electronic application that helps microfinance institutions to more effectively assess the level of environmental impact within their organisations while also helping them to plan ways to strengthen their sustainable lending practices in the future. The guide also helps MFIs identify and cater to new green markets, which represent a rapidly growing segment of MSME lending.

hivos 2After field testing the GPA guide at MFIs in Asia, Africa, and Latin America, Enclude demonstrated the tool at the Green Microfinance Conference in Zimbabwe, the European Microfinance Week in Luxembourg, and most recently at the 2013 Small Enterprise Education and Promotion (SEEP) Network Annual Conference in November. Enclude is excited about the potential this system has for helping MFIs streamline the adoption of green lending and performance practices and making environmental responsibility accessible for MFIs across developing economies.

Posted on March 31, 2014

Posted by: Laurie Spengler, CEO

As impact investing attracts interest from a growing array of active and potential investors, it’s a good time to ask what happens at the time of exiting an impact transaction – not just what happens at entry. If impact investors decide to deploy their capital with the intention of generating positive development, social, environmental outcomes alongside financial returns, how do they ensure they are meeting these objectives on the way out? Enclude’s experience as financial advisor in several recently-closed exit transactions allows us to offer some thoughts about the key ingredients of responsible exits from impact-oriented operating companies.

Extracting Lessons
As is the case with many impact investing conversations, it is instructive to look at some of the lessons from microfinance– not because microfinance has all the answers, but because the portfolio of mature investments in microfinance is ripe for insights and learnings. Extracting these lessons is timely as we see growing transaction activity across many sectors – clean and renewable energy, technology-enabled financial services, healthcare, education and more – where investors seek to align their capital decisions with their values to yield positive environmental and social return alongside financial return. This combined return calculus is something Enclude refers to as “total return”.

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Enclude’s capital advisory business has completed three exit transactions in the past 18 months and has several engagements underway. You can read more about the completed transactions – Sathapana, Ltd., XacBank, Acleda Bank Plc – on our website.

Enclude as Responsible Exit Advisor
Enclude’s role  as financial advisor involves us in all aspects of preparing, negotiating, executing and closing the exit transaction. Reflecting on deals to date and those in pipeline, we see important lessons in four areas – (i) upfront framing and customisation of the sale process; (ii) process management; (iii) terms & conditions; and (iv) transaction documentation.

Regarding the upfront framing and design of the sale process, we have discovered the critical need to consider broader stakeholder interest and participation early in the process. Typical sale transactions (non-impact) tend to focus solely on the objectives of the selling shareholder(s). In impact transactions, we have learned that focused attention must be given to the underlying investee institution – what type of investor does the investee need at this moment in time to be able to deliver on its business objectives? The reason the investee must remain front and centre is because the underlying impact – both for the exiting investor and for any subsequent investor – is being delivered by the investee not the investor. Enabling delivery of impact depends on the quality and quantity of investment capital being put to work within the investee business. While one could argue that this perspective is appropriate for all exit transactions, Enclude has found that making this perspective an explicit part of framing the sale process is essential for impact investing transactions.

Once framed as a stakeholder transaction, the steps of the transaction are reshaped to be sure stakeholder interests are reflected throughout. This approach translates most specifically into three dimensions: how the stakeholders are prepared for the sale transaction; who is invited to submit bids for the sale shares; and up-front determination of criteria for evaluating the submitted bids. On the latter point, if the criteria are not established upfront to include the elements of total return –  environmental, social, development as well as financial – the highest bidder will likely prevail.

A third area of discovery is the extent to which terms and conditions of the transaction can be finalised to meet the impact objectives of the exiting investor. One example is the inclusion of deal terms that may influence post-transaction behaviour of the new shareholder(s) through the introduction of modifications to the company’s by-laws, post-closing covenants and more. Often a departing equity shareholder may continue as a lender to the investee for a period of time, a relationship that may also reinforce continuity of purpose and mission.

Finally, on deal documentation, we have discovered how many shareholder agreements have been put together without effective consideration of exit scenarios.  For example, in some cases cumbersome approval/veto rights can be exercised among multiple shareholders, sometimes proving disruptive or even subjecting the sale process to manipulation.

Stimulating Industry Dialogue
The above provides brief highlights of Enclude’s major insights for arranging and delivering sale transactions that meet our requirements for qualifying as a “responsible exit” – one where the needs of the underlying investee are met and the exiting investor has fulfilled its impact objectives. Enclude’s capital advisory team will be sharing more about our learnings at upcoming industry convenings. Should you be interested in more information please check out our website and reach out to members of our capital advisory team.

Posted on March 31, 2014

Posted by: Rick van der Wiel, Senior Consultant, Bank of South Pacific (BSP)

BSP Team (7)In Papua New Guinea (PNG), small and medium-sized enterprises (SMEs) account for approximately 90% of all registered businesses and play a major role in the agricultural sector which provides livelihoods for 85% of the population and contributes 20% of GDP. Despite the central role that SMEs play in the economy, Papuan banks have extremely limited exposure to the SME sector, primarily because risk mitigation policies, conventional loan products, and certain elements of banking culture bar SMEs from forming any significant part of banks’ balance sheets.

Most loan products offered by banks are not accessible or appropriate for SMEs because of their collateral constraints and irregular cash flows. This is particularly true for those would-be clients that fall under the “s” of SME – the segment we prefer to call “small and growing businesses” or “SGBs”. Consequently, entrepreneurs are limited in their ability to make key investments and hire new employees, hindering not only their own growth but the growth of the entire economy.

Enclude recently completed a project in Papua New Guinea to improve SME access to finance, in the interest of fostering sector growth and overall employment creation.  To achieve these ends, the project focused on strengthening financial intermediaries, bolstering the development of more balanced and inclusive portfolios, and expanding overall market opportunities in PNG. Specific components of the project included the development of a risk sharing facility; provision of technical assistance to financial institutions; capacity building for SMEs; and cooperation with the Government of PNG’s Department of Commerce and Industry.

Posted on March 30, 2014

Posted by: Dan Gies, Senior Consultant, Inclusive Finance

Hands-on advisory support from Enclude 2972293in market assessment, product development, underwriting and marketing has helped Impuls Leasing Romania beat targets for SME/rural leasing under its €7 million loan from the European Bank for Reconstruction and Development (EBRD).  As a result, EBRD awarded a 50% budget increase for an extension of the technical assistance, enabling further implementation of creative vendor incentive schemes which have successfully driven the expansion of equipment financing to SMEs and rural agribusinesses in Romania.


Impuls Leasing Romania (ILR) is one of the major subsidiaries of Impuls Leasing International AG, a Swiss-based asset finance company specialising in Eastern Europe. ILR is a major player on the Romanian leasing market, with Raiffeisenlandesbank Oberösterreich AG (one of the largest Austrian banks) as its largest financer. As of mid-2013, ILR was the second-largest leasing company in Romania with market share of approximately 12% of the local market. It currently has over 13,000 active lease contracts with a portfolio size of over €135 million. It focuses on leasing vehicles, trucks and other transport vehicles to individuals and SMEs, and has a strong network composed of the Bucharest head office and a strong network of branches to cover the entire country.

Posted on March 30, 2014

Posted by: Cristina Iliescu, Consultant and Diana Bialus, Consultant – Inclusive Finance

roseff logoOver the past three years, Enclude has acted as the primary financial advisor to the Romania SME Sustainable Energy Finance Facility (RoSEFF), a €60 million programme funded by the EU and EBRD to support the uptake of clean energy and energy efficiency solutions. Under the programme, funds are disbursed through four partner financial institutions (BCR Erste, BRD – Group Société Générale, Banca Transilvania, and Unicredit) to small- and medium-sized enterprises (SMEs) and housing associations investing in green technology.

RoSEFF is different from other donor-funded clean energy facilities in several ways. For one, the programme offers beneficiaries a 15% grant from the total value of the loan to help cover projects costs, thereby incentivising uptake of energy efficient technologies which may seem untested or unfamiliar to borrowers. In addition, small and medium-sized enterprises are specifically targeted as potential borrowers, through provision of free technical assistance and by fast-tracking loans under €250,000. The programme thus works to strengthen players on both the supply and demand sides of this project, working with financial institutions to improve marketing and staff development and supporting loan recipients, at no added cost, in the implementation of energy improvements.

RoSEFF diagram

Working through 4 major commercial banks, RoSEFF has disbursed about 18% of the  total 60M EUR credit line ($10.77M EUR) to fund adoption of cleaner and more efficient energy solutions.  While this seems like a slow start over 2 years, it represents a significant achievement against the backdrop of the financial crisis, which severely curtailed spending and investment by SMEs. At the same time that SMEs were pulling back, the EBRD’s appropriately stringent financial and technical requirements for eligibility limit the universe of possible deals.  Nonetheless, by training local clean energy experts, equipping partner financial institutions with resources to serve the green lending market, and raising awareness of the benefits of clean energy solutions among SMEs, the RoSEFF team has been able to kick-start clean energy lending and feels confident that the program will continue to gain momentum with the financial crisis no longer encumbering Romania’s banks and small businesses.  The ultimate goal is to establish a self-sustaining market for sustainable energy investments in the Romanian SME sector, a mission that energizes the RoSEFF team because of its potential for lasting environmental and economic impact.

Posted on March 27, 2014

Posted by: Caterina Meloni, Technical Team Lead, Gender Finance

partner_argidius-foundationIn Nicaragua, the Argidius Foundation engaged Enclude to increase access to finance for Small Growing Businesses (SGBs) by working with local financial institutions to provide long-term project finance to SGBs.

To start, Enclude sent a team of SGB and female economy experts to spend two weeks in Managua where they gained a better understanding of women’s experiences when seeking financing for their businesses. The team surveyed female entrepreneurs in a number of different industries and found that fixed assets and guarantor signatures posed the greatest barriers to acquiring a loan.

BAC Nicaragua

To achieve significant scale with the project, Enclude partnered with BAC Nicaragua, a subsidiary of BAC Group owned by Colombia’s Grupo Aval, to expand their lending to high-growth SGBs. Targeting this rapidly expanding market segment provides BAC with an attractive opportunity to diversify its portfolio, explore un(der)served markets and enhance its brand image and recognition, all of which supports BAC’s longer-term strategy to become the leading lender to small and medium-sized enterprises in Nicaragua.

Posted on November 25, 2013

Posted by: Santhosh Thiruthimana, Resident Adviser, Sub-K Branchless Banking Project

I have been traveling in the car for more than four hours now, and the village that I am heading towards is still nowhere in sight. As we get off the main road and continue our journey on a rocky path, I again ask the driver and the representative of the company that I am working with- ‘how far is it?’ and got the standard reply: ‘ it is close now – we will be there very soon’. After half an hour of that ‘very soon’, I finally get a glimpse of the village, which came as a relief.

I was on my way to visit a Business Correspondent (BC) agent location in a remote village called Bestharapalli which lies hidden in a small nook along the Andhra Pradesh – Karnataka border. We had started for the village from Bangalore, the IT hub of India, where the big and gleaming buildings represented the new India. But after a 4.5 hour drive, we reached the old India where we were welcomed by a horde of cows that refused to budge as our car tried to enter the village. Once we got past the cows and made our way toward the agent outlet, all we came across was narrow lanes, few mud and brick houses, kids playing in the mud, a tractor, bullock carts and grocery shops. The village was remote from everything – highways, cities, colleges etc. – except for access to banking services using mobile technology, thanks to the business correspondent (BC) model.

The BC model was introduced by the Reserve Bank of India (RBI) in 2006 in response to the concern about the lack of penetration of banking services, especially to rural areas like the one I visited. The idea was for expansion of banking activities to un(der)served areas through agent/branchless banking using technology devices such as mobile phones that have penetrated every corner in India. Responding to the guidelines, several companies set up agent networks to provide correspondent services to banks, which offered a lot of promise for RBI’s financial inclusion drive. However, after almost eight years, even though some progress has been made, the reality is that financial inclusion is still a challenge. BC companies, once seen as the next growth sector in the Indian financial industry, are struggling  and many have moved to become urban centered companies offering remittances to migrant workers – a much needed service indeed, but far from the original mission of financial inclusion.

Posted on October 11, 2013

London, October 3, 2013 – Triodos Facet (Zeist, NL) and ShoreBank International Ltd. (Washington, DC) joined forces to form an expanded international advisory firm and today announced its new name and brand identity. The firm, now called Enclude (pronounced “n-ˈklūd”), leverages the partner companies’combined 50-year track record of entrepreneurship development and professional services delivery to financial institutions, funders, public and private sector organisations to build a more “enclusive” and prosperous global economy. Enclude has five registered offices and project locations in Sub-Saharan Africa, Asia, Latin America and the Caribbean, Europe and Central Asia. Enclude continues to be affiliated with Triodos Bank of the Netherlands.

The uniquely memorable name and mark, with its interlocking curves, are designed to reflect the company’s purpose and what it stands for: entrepreneurs, enterprises, environment, energy, and economy, all to deliver empowerment, engagement and equity. The tagline is a unique and modern restatement of the “triple bottom line” in a way that fits Enclude’s purpose and business, and reflects its core values: People. Principles. Prosperity.

“Our new identity aligns who we are as people with what we do as professionals. It reflects our values of inclusivity, transparency and partnership and is an affirmation of our commitment to helping clients, investors and partners achieve greater reach, bottom-line profitability and sustained social value.” explained Laurie Spengler, CEO of Enclude and formerly president and CEO of SBI.

“To us, inclusivity is more than financial inclusion – it is also expanding mobile banking to the poor, extending renewable energy to rural communities, and connecting farmers to modern dairy science,” Spengler added.

Adriaan Loeff, formerly managing director of Triodos Facet and now Enclude’s managing director, regions, added: “Entrepreneurs have always been at the heart of what we do. Enclude is solidly based on our legacy and our belief in the power of entrepreneurship and inclusive finance to transform local economies and accelerate inclusive, sustainable growth.”

Peter Blom, CEO of Triodos Bank, foresees a “bright future for Enclude.” “The economy is changing,” he said, and “old models don’t work anymore. Enclude’s holistic approach is key to building a more prosperous future for all.”

Enclude advises financial institutions, public and private organisations and other intermediaries in emerging economies who in turn create new opportunities for entrepreneurs and households in their communities. Enclude’s areas of expertise include financial institution strengthening, distribution channels such as mobile financial services, business support systems, clean energy and sustainable agriculture, social and environmental performance management systems, and securing appropriate sources of capital for financial institutions and companies meeting the needs of un(der)served markets.

Enclude’s new website can be found at

“We are delighted to introduce Enclude to our clients, partners and friends. We feel that this

new name, logo and tagline better communicate who we are, what we do and—most importantly—why our work matters.” Spengler said.


Enclude ( is an advisory firm dedicated to building an inclusive and prosperous global economy. We provide integrated capacity and capital services that help clients and partners design, connect, finance and build solutions that generate sustainable business results and positive social and environmental outcomes. Enclude’s committed professionals work in five registered offices (Netherlands, United States, United Kingdom, Pakistan, India) and in project locations across the world, including Sub-Saharan Africa, Asia, Latin America and the Caribbean, Europe and Central Asia.

Posted on July 30, 2013

DBP_Philippines scenic

Financial and technological innovation is helping banks expand access to finance for small businesses around the world. However, financial institutions are conservative by nature, so champions and thought leaders are often needed to blaze a trail. In the Philippines, the Development Bank of the Philippines (DBP) has taken on that role.

Alan Martinez from Enclude (formerly doing business as ShoreBank International and Triodos Facet), in collaboration with Innovations for Poverty Action and DBP, has been working to develop a scoring approach for reaching rural borrowers and in the process they are implementing an evaluation to continue measuring its impact. Impact evaluations are part of a global trend towards evidence-based policy.  IPA is using the strongest scientific methodology, the randomized controlled trial, to measure the impact of credit on borrowers’ information that can be useful for policy and program improvements.

Alan says, “The challenge for SMEs is tremendous, even more so in rural areas.  Together with IPA and DBP, we have been rethinking how to deliver loans to borrowers scattered across thousands of islands.  Scoring is but one of the innovations but it is a key component.  We have thought about customer segments and defined products and tools to fit the requirements of a unique market segment not served by MFIs or mainstream banks.”

Read more about the project here, or a full description of the study here.

Posted on July 23, 2013

In May, Debbie Watkins and Gerry Rasugu presented at the Microsave Mobile Money Conference Africa in Johannesburg. Here we provide a summary of Debbie’s presentation, “Creating a Collaborative Framework to Communicate, Promote and Facilitate Interoperability,” numbered to match the slides. If you would like to view the visual presentation, click the image above.

(1) The concept around interoperability is that by enabling customers of a wide range of banks and mobile network operators (MNOs) to use financial services across an interconnected platform with shared access points, it’s beneficial to both the customer and to the companies involved. This, however, can seem counter-intuitive, because generally banks and MNOs alike suspect that cooperating with competitors will be the death of their business. However, when it comes to mobile financial services, that’s often not the case.

(2) When we speak of alternative delivery channels, we’re really talking about the evolution of networks. There’s a common misconception that with the launch of an alternative delivery channel, it’s the banking model that’s evolving. This is incorrect. What’s evolving are the financial services that the target market currently uses.