Hivos-Triodos Fund celebrates 25 years of impact investment

March 18, 2019

This year marks 25 years since the creation of the Hivos-Triodos Fund (HTF). In 1994, the joint initiative of Hivos and Triodos Bank started as one of the first movers worldwide in financial inclusion investments. From its early beginnings, HTF invested in microfinance institutions, making small loans available to entrepreneurs in disadvantaged markets in developing countries. Now, 25 years later, the fund still plays a frontrunner’s role through its support for renewable energy and sustainable agriculture initiatives, which enable tens of thousands of businesses to thrive.

Unique partnership

HTF’s roots can be traced to the Hivos Loan Fund, launched in 1971. Introduced as a microcredit program, the fund was initially met with resistance. Then Hivos-director Robert Sorgedrager recalls, “They looked at me as if I had spoken blasphemy. You were supposed to give to the poor!” In the 1990s, the Hivos Loan Fund was still operational, but as a risk-bearing loan fund. This, too, raised eyebrows because organizations like Hivos were not supposed to “play bank.” That was one of the reasons why Hivos took another bold step: cooperation with a real bank, the Triodos Bank.

It was really crowdfunding avant la lettre and even today is considered innovative

Back in 1994, a cooperation between a development organization and a bank was unusual. But the partnership soon became recognized for how it developed the microfinance sector. As Karel Nierop, HTF’s current fund manager explains, “When the fund was set up, microfinance did not exist at all as a sector. But over the years it has attracted an enormous amount of private and institutional money. HTF really played a catalyzing role there, also because of its funding structure that allowed the fund to assume more risks.”

Backed by funding from Hivos, Triodos Bank launched a savings product for its Dutch clients which was directly linked to the Hivos-Triodos Fund. “It was really crowdfunding avant la lettre and even today is considered innovative,” adds Nierop.

Although the fund has grown past this structure today, the combination of public and private funding from Hivos and Triodos Bank respectively remains a great example of a successful blended finance fund.

Balancing impact, risk and return

The HTF is also unique in its focus on both societal and environmental impact, and return on investment, while balancing risks. Nierop values the discussions he has had with Hivos about this delicate balance. “We are constantly looking for the sweet spot between those three. Even though as an impact investor we have a strong focus on the risk and return balance, and Hivos focuses more on rural, marginalized areas and gender, there is great alignment between our organizations. Because you need all these components in an enterprise for it to be sustainable. At Triodos, we will not invest if there isn’t a clear positive impact to be made, but the business model needs to work as well. Hivos shares that view, and we have open conversations if needed on particular cases.”

HTF shows that finance for positive impact is possible. Both Triodos and Hivos will continue to inspire and change the financial sector

Expanding to new sectors

Hivos and Triodos have always been on the lookout for investment opportunities in innovations and new fields. In 2010, HTF started to expand its portfolio into sustainable food and agriculture, and (off-grid) renewable energy solutions for low-income households offered by SMEs or financial intermediaries. 2015 marked a strategic shift, as HTF decided to make renewable energy and sustainable agriculture its main focus. Hivos Executive Director Edwin Huizing explains why Hivos pushed for this strategic shift: “In 2013, we formulated our new vision on sustainable food and renewable energy. We believe that together, the work of Hivos and HTF strengthens each other and contributes to a fair, free and sustainable world. Achieving that requires all involved – including the financial and private sectors – to take responsibility.”

Nierop adds: “To help propel change in these sectors, we now specifically direct our investments towards green entrepreneurs. My dream and ambition is to push the same development as we did in inclusive finance and greatly scale up investments in these areas. With HTF we can show that innovative, early-stage business models work, and that can spark investments from other investors. This is very much needed to achieve a sustainable energy and food transition in the world.”

The fund’s impact to date

HTF has been set up as a revolving fund, meaning it keeps re-investing the money that is repaid by its clients. From 1994 onwards, HTF has invested over EUR 200 million and helped millions of predominantly rural women access financial services, empowering them to achieve their goals and aspirations. By end 2018, the fund had EUR 67 million outstanding in investments in 28 companies in 16 emerging markets worldwide. With 56 percent exposure in Africa, this has benefited many mainly rural, marginalized communities. A growing percentage of investments is done in SMEs in the sustainable agri-food and renewable energy sector.

According Huizing, these SMEs are real frontrunners in the transition towards more sustainable energy and food systems. “That is why the financial sector plays a key role in climate mitigation,” Huizing explains. “HTF shows that finance for positive impact is possible. Both Triodos and Hivos will continue to inspire and change the financial sector.”

Positive examples

After 25 years, many positive examples abound. Among them are those of Centenary Bank, Norandino, Twiga Foods and

Centenary Bank

Centenary Bank is the leading microfinance bank in Uganda. Hivos-Triodos Fund has been a shareholder since 1998 and was actively involved in its development from a small rural bank to the second largest bank in Uganda. Its easy accessibility and relatively low interest rates have given Centenary Bank the reputation of being a bank for all Ugandans. Centenary Bank remains a market leader in the microfinance sector in Uganda and is very active in rural areas. In Africa, it is a leading example of successful commercial banking that balances people’s interests and prosperity. The bank now serves over a million customers; a third of Uganda’s banking population. In 2012, Centenary Bank became the first African member of the Global Alliance for Banking for Values, an independent network of banks using finance to deliver sustainable economic, social and environmental development.

Hivos Triodos Fund
Photo courtesy of Centenary Bank


Norandino is a credit and savings cooperative working with (organic) coffee farmers in the highlands of northeast Peru. The dry season, which usually kills off coffee rust, was extremely wet in 2011-2012, so the fungus spread and killed many coffee plants in the region. Hivos-Triodos Fund provided an innovative long-term loan to  renovate coffee plantations, increasing their resilience and ensuring future income for smallholder farmers. The loan product was so successful that it has been applied to other crops such as cocoa, sugar cane, mangos and bananas, keeping a strong focus on sustainable agricultural practices.

Hivos published a case study on Norandino and the opportunities and potential bottlenecks for reducing socio-environmental footprint (e.g. CO2, biodiversity and water protection) in the company’s supply chain.

Twiga Foods

Twiga Foods in Kenya is a mobile-based supply platform for Africa’s market stalls. It buys fresh fruits and vegetables directly from farmers and delivers them to the doorsteps of Nairobi’s street vendors, offering better conditions and prices for both. Farmers get a fair price up front; street vendors are delivered quality products at  transparent prices. By doing this, Twiga Foods drastically reduces food waste in the value chain, which can be as high as 40 percent. Hivos-Triodos Fund is one of Twiga Foods’ first institutional lenders, providing loans for energy-efficient storage facilities and working capital.

Hivos Triodos Fund
Photo courtesy of Twiga Foods

SistemaBioBolsa produces and sells biodigesters, converting organic waste (animal manure) into biogas that can be used for cooking, heating, or electricity generation. Bio-slurry, a by-product of biogas production, is an excellent organic fertilizer used by local agriculture (“creating value from waste”). Biogas not only produces clean energy; it reduces both CO2 emissions and the use of chemical fertilizers. Furthermore, it generates savings for the farmers by reducing fuel costs and increasing harvest yields. The company has installed over 4,000 biodigesters in Latin America, and with a loan from Hivos-Triodos Fund, is expanding to Kenya. Hivos previously partnered with in the Biogas Nicaragua Program.

Hivos Triodos Fund
Photo courtesy of