Once the capital has been raised, it needs to be invested into sustainable projects according to the sustainable development objectives set up by the United Nations (SDGs).
Due to the nature of its activities, Alterfin contributes naturally to several SDGs. Thus, by supporting mainly micro-entrepreneurs and small producers engaged in sustainable and family agriculture, Alterfin reduces poverty, hunger and gender inequalities. Alterfin also works for decent work and sustainable economic growth that respects the environment.
Here is a step-by-step description of the process Alterfin uses to select its partners.
Credit application and initial screening
A potential partner submits its application for funding. Very often, contact is first established through Non Governmental Organisations (NGOs), through existing partners or through prospecting activity by our investment managers. Initial screening is performed to check the eligibility criteria.
Analysis in the field
If the initial screening is positive, an Alterfin Investment manager performs a thorough ‘due diligence’ analysis in the field. He/she meets the partner and analyses a series of institutional, social and financial criteria. This visit is essential to ensure the partner’s viability, establish a relationship of trust and check that the loan will actually be used for the benefit of socially and financially marginalised groups.
Decision by the investment committee
If the due diligence is positive, the application goes before the investment committee, which will make the final decision on funding.
Maintaining good relations
Once the loan has been released, the investment manager maintains frequent communications with the partners and visits them about once a year.
And so on...
After the loan has been reimbursed, the partner can submit a new loan application. In many cases, the second loan is larger than the first, provided that the initial collaboration has gone well and the social, economic and environmental objectives have been respected. In this way, the partner’s development is supported in the long term.
There is more!
Alterfin's mission is to improve the living conditions of socially and economically disadvantaged individuals in developing countries. Thus, beyond the financial aspects related to our investment decisions, the impact of each loan, whether it is the direct impact on the organisation financed or the indirect impact on its beneficiaries, is evaluated throughout the investment cycle and guides our decisions. More precisely we evaluate the environmental and social impact of each investment but also the additional aspect of Alterfin and its added value on its partners. This allows us not only to make informed decisions but also to prove the benefits of our activities and to learn daily to improve.
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