Funds for Good is a two-headed structure. On the one hand, there is Funds For Good Invest, which manages the Funds For Good impact investment fund and creates and distributes “ethical and sustainable” investment funds. There are currently four funds. On the other hand, there is Funds For Good Impact, a non-profit organisation whose mission is to support entrepreneurs in precarious employment or with a societal project. In concrete terms, the fund manager is statutorily committed to paying back to the non-profit organisation the highest multiple between 10% of the turnover and 50% of the net result if the financial year is profitable.
In 2021, Funds For Good Impact was thus able to grant €350,735 in interest-free loans--unsecured loans--to 159 entrepreneurs. Over the past decade, 850 entrepreneurs have been helped. At the end of 2021, Funds for Good Invest had €650m in assets under management, an increase of 50% compared to the end of 2020. This growth confirms the establishment in the landscape of the concept of eco-responsibility on which Funds for Good is based.
An envelope of €100,000
It is now time for Funds For Good to go international and distribute its products outside its borders, in Spain, France and Luxembourg.
In Luxembourg, Funds For Good Invest works with Banque de Luxembourg and Funds For Good Impact with Microlux. This partnership has enabled Microlux to add another string to its bow by offering since the beginning of 2022.
Microlux has planned to devote an envelope of €100,000 to these loans. Funds For Good Impact has contributed €25,000 of this amount. The amount will evolve depending on the results of Funds For Good Invest, according to Anaïs Pauwels, head of impact at Funds For Good.
A question of trust
In the Funds For Good project, the main target is the fight against poverty. The loans are primarily aimed at people who are unemployed or in difficult situations, so that they can find a job or create one themselves, in order to make a living from it and leave a situation of social exclusion. In addition to these loans, Funds For Good and Microlux offer, on an ad hoc basis and on request, support through a community of volunteers who coach and accompany the financed entrepreneurs .
Although these non-collateralised loans are aimed at a category of the population in a precarious situation, the default rate remains limited, between 7% and 10%.
“What we have noticed in microfinance is that in the case of financing a person, there is a bond of trust that is created. These people, who have been refused everything, have the will to repay their loan, even if the activity has stopped”, commented Pauwels.
Anh Quyen Ngo Li, communication manager at Microlux, said the organisation emphasises confidence, “because we cannot look at their assets to decide to lend them money. We are looking for trustworthy assets. And if they face a difficulty, the watchword we give them is to keep in touch. Everything can be understood, everything can be explained... that’s where trust comes in.”
Impact days coming soon
This year, the two partners intend to focus on the usefulness of microfinance in the face of rising poverty and social inequality, a “little known” theme according to Pauwels, despite the fact that “in Belgium, one young person in five is at risk of poverty at the moment”. She said that “the fight against climate change cannot be done without the fight against social inequalities”.
In the coming months, Funds For Good and Microlux also want to develop an event component, following the example of what is already being done in Belgium, where during “impact days”, the supported entrepreneurs are highlighted.
Read the original French version of this article on the site.