Our business model
Resources
Value creation starts with the resources or ‘inputs' that are key to running our business:
Human | We have a professional, skilled and international workforce. At the end of 2022, we had 689 internal employees, representing 63 nationalities. In addition, we employed 154 external professionals. Our employees are passionate about our mission and are expected to embody our values;
Intellectual | We are recognized as a leading impact investor and for our in-depth knowledge of financing and ESG management in emerging markets and developing economies. This makes us an attractive business partner and enables us to secure public and private funding;
Financial | We have a strong capital base and a triple-A rating. This allows us to obtain funding at attractive rates. Commercial investors supply capital through FMO's (sustainability) bonds;
Networks and partnerships | We have strong partnerships and networks of customers, knowledge institutes, NGOs, governments and financial partners such as commercial investors and banks.
In addition, we work with suppliers that provide goods and (outsourced) services. We only want to work with trustworthy suppliers and, therefore, a due diligence process in line with the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) is in place for new or existing suppliers related to our main activities, such as consultants, legal advisors, government intermediaries and/or providers of critically outsourced services. This is set out in FMO’s Procurement and Outsourcing Policy.
FMO’s business activities
Through the following business activities and interactions with others, FMO transforms resources into outputs that, over the short, medium and long term, create value for the organization, its stakeholders, society and the environment.
We provide finance | We offer long-term financing and, when possible, provide funding in local currencies to mitigate the exchange rate risk of our customers and end beneficiaries. This includes:
Offering direct medium and long-term loans at both fixed and variable interest rates, with a repayment grace period where needed;
Investing equity directly or indirectly (through private equity funds) or co-investing with partners. We provide stable, long-term capital and usually sell our stake after five to ten years. We receive dividends and accounts for fair value gains or losses during the lifetime of an investment;
Structuring guarantees that meet the needs of the (end) beneficiary, the market and the targeted creditors.
We blend and mobilize finance | On behalf of governments and multilateral organizations, we deploy public finance in higher-risk projects and programs. Such finance helps to realign risks. Private and institutional capital will then be more easily attracted towards scalable but higher-risk investments that otherwise would not have been considered by commercial investors. We arrange syndicated loans by bringing together commercial banks, investors and other development finance institutions (DFIs) to raise larger financing amounts in an efficient way to scale up our impact. Commercial investors have access to FMO’s expertise in impact investing in emerging markets and developing economies. FMO Investment Management provides services to several funds with different market-based, risk-return profiles to accommodate different investor risk appetites. We receive a fee for providing these services.
We stimulate impact, ESG and value creation | We offer advisory services and technical assistance to support customers in building profitable and sustainable businesses. This consists of support in the design and implementation of ESG risk mitigation measures, master classes and events, capacity development and sector initiatives.
We (help others to) innovate | We enable innovation and pioneer new approaches, business models and products with the potential to be more impactful and scalable. We enable market ecosystem development and strengthen customer business development by collaborating with partners.