Operating context

Since 1970, FMO has made a positive difference in developing countries by empowering entrepreneurs to build a better world. We create long-term value by investing in the private sector, addressing climate change, reducing inequality and supporting (in)direct jobs.

Our mandate

In working with the private sector to tackle these challenges, our investment decisions are guided by three principles:

Additionality: FMO was established and receives government support to provide financial services that the commercial market does not (sufficiently) provide or which are only offered on terms that do not fit in a solid business model. We do this without crowding out private parties and distinguish between two types of additionality:
- Financial: providing financial services that are not readily available from commercial parties on workable terms;
- ESG: contributing to higher environmental, social and governance (ESG) standards that are not required in the market , thereby achieving a transformation effect.
Mobilizing: FMO attracts as much additional private sector funding as possible in order to maximize its development value.
Good governance: FMO applies the principles of good governance to all aspects of its business.

We invest in developing countries that are often characterized by a fragile private sector, little job security and/or high poverty rates. Our customers operate in volatile markets that are significantly impacted by macroeconomic trends like increasing commodity prices and foreign exchange fluctuations. FMO engages with its customers before and during the lifetime of an investment to understand their context and risks. This enables FMO to offer products and services that suit the needs of its customers. In turn, our customers go on a long-term journey with FMO towards positive social, environmental and economic change.

Regional spread

Diversification is key to our risk management approach and allows us to limit the volatility of our portfolio. FMO invests in 83 countries, across four regions: Africa, Asia, Eastern Europe and Central Asia, and Latin America and the Caribbean.

Sectors

We invest in sectors that are crucial for job creation (SDG 8), reducing inequalities (SDG 10) and taking climate action (SDG 13), specifically:

We also finance other sectors indirectly through our investments in financial institutions, through private equity (PE) funds that make an important contribution to job creation.

Investing in different sectors also diversifies risks as each sector is impacted differently by macro-economic developments.