August 22, 2019
Finance to buy a sewing machine (Myanmar)
Finance to construct a textile factory (Cambodia)
On August 22, the Japan International Cooperation Agency (JICA) signed an agreement with Gojo & Company, Inc. (“Gojo”,) to make an investment of 1 billion yen. This agreement is to help expand Gojo’s business of delivering microfinance in developing countries and so helping improve access to finance amongst low-income classes, raising the standard of living, and promoting women’s empowerment.
There are 1.7 billion adults in the world who do not have accounts in financial institutions. More than half of these adults are women. (Note 1) Thus, Improving access to finance is an urgent issue especially in developing counties. Ensuring that all men and women, in particular the poor and the vulnerable, have equal rights to access financial services, including microfinance (Goal 1) and encouraging the formalization and growth of micro-, small- and medium- sized enterprises, including through access to financial services (Goal 8) are targets set out in the Sustainable Development Goals (SDGs).
Gojo aims to become “Private Sector World Bank” with the mission of delivering financial access throughout the world. It was set up in July 2014, and to the present has developed microfinance businesses in India, Cambodia, Sri Lanka, and Myanmar. Gojo delivers finance services with highest concern for the satisfaction of employees and customers and makes every effort to improve the economic independence and living standards of low-income class customers. At present, there are over 400,000 customers and this has made a large impact on society in developing countries. Through this investment agreement, JICA will support Gojo to achieve further expansion of business.
95% of Gojo’s customers are women. By providing financing to women in developing counties, we expect to see increase in economic empowerment through rise in women’s income and growth in women entrepreneurs’ business. JICA participates in the “G7 2X Challenge: Finance for Women” initiative launched at the G7 Charlevoix Summit in Canada in June 2018 (Note 2), and the investment in Gojo will contribute to this initiative.
As a result of JICA’s financial contribution, institutional investors both within and outside Japan will deepen understanding of social impact investment (Note 3), and is expected to encourage mobilizing further private capital.
Previously JICA has helped improve access to finance in developing counties and has empowered women through investment in “Microfinance Project for Poverty Reduction” (2012, Note 4) and “Japan ASEAN Women Empowerment Fund” (2016, Note 5). In the future JICA will continue to give broad assistance to pioneering initiatives by private businesses in this field.
(Note1) Source: Global Findex 2017
(Note2) An initiative set up by G7 development finance institutions to mobilize $3 billion of funds by 2020 to invest in businesses, enterprises, and funds contributing to gender equality. Participants besides JICA include FINDEV (Canada), CDC (UK), OPIC (US), Proparco (France), CDP (Italy), and JBIC (Japan).
(Note3) Social impact investment is the provision of finance to organisations addressing social needs with the explicit expectation of a measurable social, as well as financial, return.
(Note4) This was a support for Pakistan’s first microfinance institution. Investment was made together with NGO Aga Khan Development Group and IFC. In addition to offering finance, JICA has supported the development of staffs’ skills, and conducted surveys and provided technical assistance to develop finance products.
(Note5) This is an investment in a fund managed by Blue Orchard Finance S.A, a pioneer in microfinance fund operations. JICA supports microfinance in the Asian region through this fund.