Impact Report
2024 AugustContents

A Word from Taejun, Our CEO

2

Gojo’s Vision, Mission, and Guiding Principles

4

A Word From an Early Investor

6

Key Highlights

7

Our Clients In Numbers

8

Business Overview

10

Stakeholder Impact

16

What Is Financial Inclusion?

18

How Clients Experience Our Products and Services

24

Understanding Over-Indebtedness

26

Social Performance Management

33

Innovation

39

People42

Environment

47

Closing Remarks From the Chair of the Impact Committee

52

A Word From Taejun,
Our CEO
Thank you for opening our Impact Report forinterest of the clients. Many first-generation MFIs

FY2024/03.

were owned mainly by founders and clients, andthere was less tension between the company

It has been ten years since Gojo started ourand its clients. However, because of the shift ofjourney in July 2014. Gojo has reached 2.4

the funders, commercial investors became major

million clients as of March 2024. One of the key

shareholders of new-generation MFIs.

discussions that we have had until today was, “Canfor-profit microfinance companies really serve the

Although the trend is for corporations to updateclients?” Let me provide some more context.

their purposes in light of stakeholder capitalism,
most countries’ corporate laws stipulate that

The first-generation microfinance movement,

companies belong to their shareholders.

born from an expansion of a grassroots-level

Therefore, the change in the shareholders’ naturefinancial inclusion movement with a primary aim ofindeed brought about a change in the companies.

poverty alleviation, proved to be successful both in

The transition of the shareholder base gradually

impact creation and profit making. This economic

started to cause side effects, which we saw more

success led to a shift in funders — donors became

than a decade ago. One was an IPO (initial public

less keen on giving grants to microfinance, andoffering) of a Mexican MFI Compartamos in 2007,

investors (originally more social-impact-oriented,

which used to charge 80% interest to the clientsand later more commercial-oriented) began toto grow the business faster and make bigger

replace these donors. Now, it is difficult to see a

profits1. Another was the Indian microfinancedonor willing to give grants to MFIs (microfinancecrisis triggered by SKS Microfinance in 2008, an

institutions) except for the services related to

Indian MFI which made its second IPO as an MFI

climate change or technology.

globally. I think it’s ironic that these two events
happened right after the acquisition of the Nobel

Thirty years ago, when there were no shareholders

Peace Prize was awarded to Grameen Bank andwhose interest were to make a profit by exploiting

Dr. Muhammad Yunus in 2006.

clients, it was easy for MFIs to work in the best

1 Rosenberg, R. (2007). CGAP Reflections on the Compartamos Initial Public Offering: A Case Study on Microfinance Interest Rates andProfits. Consultative Group to Assist the Poor.
https://www.cgap.org/research/publication/cgap-reflections-on-compartamos-initial-public-offering

2 | Gojo Impact ReportSince these incidents, driven by thepushing them into over-indebtedness. Fortunately,commercialisation of microfinance, the sector

at Gojo Group, we have not seen serious violations

has started to strengthen the establishmentof Client Protection Standards. Still, we have to beof standards of SPM (social performance

conscious that we may face more challenges tomanagement) with SPI (social performanceachieve the double bottom line of financial growthindicator) audits and Client Protection Certificationand social impact, especially as we prepare for our

programs. The sector thought that it had learned

IPO. Nevertheless, we do all we can to prevent andfrom the past and was ready to achieve theresolve over-indebtedness among our clients.

double or triple bottom line in this new era of
microfinance.

It has been half a century since the birth ofmodern microfinance. Due to many events,

Cambodia is undergoing an unprecedented

many donors and impact-oriented investors haveover-indebtedness situation driven by multiple

become less keen on financial inclusion, despite

factors: (1) a dollarized economy and pro-foreign

the sheer fact that millions of people around theinvestors regulation, which made the country an

world are still excluded. For this very reason,

attractive investment destination, and (2) the exit

we have to carry on working to extend financial

of impact-oriented shareholders from major MFIs,

inclusion despite this challenging situation andsometimes lacking the concept of “responsible

thus keep having serious discussions internally toexit” and replaced by commercial shareholders.

see what we can do.

We have also heard many cases of aggressive
collection by MFIs. We learned that when the

In this report, we show you where we are in our

over-indebtedness is systemic, what one company

efforts. I hope you will enjoy reading it.

can do to mitigate the crisis is fairly limited. For
example, even if we assess our clients’ solvency
diligently, soon after their loan transaction withus, the other MFIs could approach our clients,

A Word From Taejun, Our CEO | 3

A coconut farmer in Ayeyarwady, Myanmar /Taejun Shin

Gojo’s Vision, Mission,and Guiding Principles
VisionCreate a world where everyone can determine their future

MissionExtend financial inclusion across the globe

Our Goal
To enable the provision of high-quality affordable
financial services in 50 countries

4 | Gojo Impact ReportGuiding Principles
Our Guiding Principles are inspired by Greek philosophy, and centre on the trinity of
Truth, Ethics, and Aesthetics, together with the principle of Consistency. We reference
the Guiding Principles in all of Gojo’s policy documents and strive to follow them ineverything we do.

Truth:

Think and behave rightly

Ethics:Do nothing with which we cannot face our clients, family, and friends

Aesthetics:

Pursue the best quality, the best efficiency, and the best simplicity

Consistency:

Be consistent in what we believe, what we speak, and what we do

Gojo Values
Our name, “Gojo” (五常), comes from the 5 Confucian values of empathy, integrity,
courtesy, wisdom, and trust. We use a modern interpretation of the values to guide ourdecisions and day-to-day work.

Stand by our Clients
We strive to see things from the perspective of our end clients so that
our services support their goals.
Act on Principles
We are guided in all we do by our principles without exception.
Listen FirstWe always keep an open mind and uphold everyone’s right to beheard and respected.
Learn–Think–Share
We challenge the conventional, consider the practical, and share ourknowledge with others.
Be Genuine
We build trust and demonstrate our loyalty by telling the truth without
concern for appearances.

Gojo’s Vision, Mission, and Guiding Principles | 5

A Word From an Early Investor
In May 2014, two months before Gojo wascompany in Sri Lanka, and we talked with Sejaya’s

established, I met Taejun for the first time. My

clients in a small centre meeting. There was the

co-founders and I had been discussing the sale offriendly atmosphere of a group of neighbours, anda company I founded but lacked knowledge about

it was a precious experience for me to feel the

M&A (Merger & Acquisition), so we decided toreality of the clients’ lives. I gather that many otherask Taejun, a friend of my co-founder, to provide

shareholders of Gojo would agree with me — it is

M&A advisory services for us. He was extremely

really gratifying, especially when the world is goingbusy launching Gojo, but he managed thethrough tough times, to see that our investment

impressive feat of leading the negotiation for us

in Gojo is contributing, beyond the growth of theand establishing Gojo at the same time. The days

business, to someone else’s happiness.

we spent working together to create the necessary
documentation are still fond memories for me. We

While writing this note, I was reading my diarysuccessfully closed the share transfer agreement

entry from the day I first met Taejun. It read, “First

after three months, and I invested part of themeeting with Taejun. Capable and a good guy.

capital gain, becoming an early-stage shareholder

Reliable.” That impression hasn’t changed in tenof Gojo.

years. What is most important to me, above all, isthat he has always been a good guy. He stands for

I invested in Gojo, which was in its infancy

the people in weaker positions, not for his personal

back then, not only because I trusted Taejun

interest, and works extremely hard to create aunconditionally, but also because I was fascinatedbetter society. Not many people can do this.

by the company’s vision. The stories of typicalmicrofinance clients that Taejun told me were easy

Needless to say, an organisation doesn’t progress

to comprehend for someone like me who did notthanks to just one capable leader. To the best

have any knowledge about financial inclusion.

of my knowledge, Gojo’s members are all very

Those stories were set in tiny villages in places

capable and are working hard to advance Gojo’s

like Cambodia and Sri Lanka, where clients were

mission. Gathering such an excellent team mightbuying and raising cows or investing in sewing

be Taejun’s biggest achievement at Gojo. I hopemachines to make clothes. These stories madethat Gojo, which started ten years ago as a small

me believe that my investment would contribute toboat with just a handful of people, will become an

improving someone else’s life.

ark that helps many people all over the world.

That belief was confirmed when I visited Sri Lanka

Takuya Oyama

in 2017. Taejun took me to Sejaya, Gojo’s group

6 | Gojo Impact ReportKey Highlights
Gojo’s mission is to extend financial inclusion

with the microfinance business model. In theacross the globe, and we do so by providing high-‘Understanding Over-Indebtedness’ section, we

quality, affordable financial services. Through nine

explore its complex causes, the impact of debt

group companies in five countries, Gojo Groupstress on clients’ lives, and what Gojo Group isserved 2.4 million clients reaching a GLP (grossdoing to respond to this issue. We expand on theloan portfolio) of USD 817 million as of March 2024

mechanisms we use to prevent harm to clients(consolidated base). Almost all of our clients are

and ensure responsible organisational practices

women, and four out of five live in rural areas.

across the group in the ‘Social Performance
Management’ section.

In this report, we go back to basics as we shedlight on financial inclusion. In the ‘What Is

We also celebrate new milestones: theFinancial Inclusion?’ section, we discuss its key

establishment of Gojo’s venture capital fundfeatures — access, quality, and affordability. We

UNLEASH, the launch of a client mobile app undertouch upon the business model that helps us

the Pasio program, a significant increase in thesustain our efforts and what the positive andpercentage of women members in Gojo, and thenegative outcomes of microfinance are. At Gojo,

expansion of the scope of our GHG (greenhousethe extent to which we facilitate financialgas) emissions calculations. You may read more

inclusion is studied by understanding ourabout them in their respective sections.

outreach, and by how our clients experience our
products and services.

Finally, short client stories will meet you
throughout the report to give you a glimpse of the

However, we do not speak only about the positive

field. Please read on to learn more about Gojo’s

facets of microfinance. We dive deeper into

work and impact in FY2024/03.

over-indebtedness, one of the risks associated

Key Highlights | 7

Our Clients In Numbers
Gojo Group encompasses

2.4 million

clients2

across the globe as of March 2024.

2.2 mnlending clients

266 ksavings clients

96%

female clients86%

rural clients

17%

accessingfinance forthe first time*

71%

voluntary savings

Gojo Group total lending clients (k)
2,192
1,751
1,203

574

711

340
2019/032020/032021/032022/032023/032024/03

2019/032020/032021/032022/032023/032024/03

Women ratio** (%)

99

99

99

95

95

96

Rural ratio*** (%)

87

89

87

82

87

86

*Number of SATYA clients accessing finance for the first time as a percentage of the total number of new SATYA clients in FY2024/03.
**Women ratio excludes Ananya retail clients (~2022/3), Ananya wholesale clients, Loan Frame, and UNLEASH.
***Rural ratio excludes MIFIDA (~2019/6), Ananya retail clients (~2022/3), Ananya wholesale clients, Sejaya, Loan Frame, UNLEASH, andMyShubhLife.

2 Aggregated unique clients of Gojo Group total, excluding Ananya wholesale, Loan Frame, and UNLEASH.

8 | Gojo Impact ReportGojo Group’s operations

Gojo’s consolidated Gross Loan Portfolio (USD mn)
817

645

460

268

91

70
2019/032020/032021/032022/032023/032024/03

Gojo’s consolidated lending clients and GLP as of March 2024*
Company name

No. of lending clients(k)Gross Loan Portfolio(USD mn)

SATYA**

1,710

605

Ananya**129

53   Tajikistan

Humo

106

101

   Myanmar

MIFIDA

58

21   Cambodia

MAXIMA

1030   Sri Lanka

Sejaya

72

8

2,085

817

   India

Consolidated total*Converted from local currency to USD with the foreign exchange rates as of March 2024 for SATYA, Ananya, MIFIDA, andDecember 2023 for Humo, MAXIMA, and Sejaya.
**SATYA includes SATYA Micro Housing and Ananya includes Prayas Financial Services while excluding it’s wholesale clients.

Our Clients In Numbers | 9

Business Overview

Operations
We work with group companies to improve local
operations, implement best practices, and develop

How we translate funds into impact

financial services, such as microcredit and

Gojo’s business is to extend financial inclusion

microsavings. The group companies receiveby helping socially impactful financial service

interest and fees from our clients; Gojo thenproviders succeed. We expand our footprint

consolidates the group companies’ profits andthrough the investment and acquisition ofreceives dividends and fees. Gojo provides

financial service providers. Gojo Group now

support for management as well as equity and

Financeconsists of the holding company Gojo & Company

debt fundraising, implements global standard

We help group companies to find and negotiate(“Gojo”) and nine group companies in fivegovernance and drives operational excellence anddebt funding to support their operations.

countries — Cambodia, Sri Lanka, Myanmar,

innovation to deliver impact at scale.

Gojo works on optimising funding cost andeffective policies and processes. If necessary,
we also facilitate turnarounds.

diversifying sources of funds by pursuing global

India and Tajikistan — that provide various

scale and risk diversification.

Due Diligence

Capital Injection

We conduct a rigorous due diligence process

We invest in our group companies

with potential investees, incorporating theto expand their business and

ALINUS indicators into our process. We focus

support their continued growth.

particularly on their alignment with Gojo’s

Governance
We implement global standard governance bystreamlining board and committee structures,
implementing whistleblowing policy, anti-money

mission and ability to achieve both financial

laundering policy and so on.

sustainability and social impact.

Funds Raised
Gojo raises equity financing
to strengthen Gojo’s financial

Innovation

foundation, enabling us to invest in

We support group companies in developing

further growth and impact of ourclient / staff applications, new digital products,

group companies.

fully digitised call centres and so on to improve
operational efficiency.

Recruitment and Retention

Management Support

We recruit world-class talent from diverse

Gojo provides management

backgrounds, and work to create a supportive,

support to group companies

principled culture where everyone can beaccording to their needs.

their best selves.

Impact Measurement andSocial Performance Management
We work closely with impact measurement and SPM
Leads in each group company to conduct SPI audits,
collect data on outcome indicators through surveys,
and conduct primary research into clients’ use offinancial services.

10 | Gojo Impact Report

Business Overview | 11

Overview of Group Companies3
Date of investment

August 2014
MAXIMA Microfinance, Cambodia
10 thousand clients
Gojo’s ownership: 61.6%
MAXIMA serves mostly rural low-income households and SMEs (Small and Medium
Enterprises), helping them improve their socio-economic situation in a sustainable way.
They provide loans for agriculture, home improvement, business and education. They
provide a wide range of loan sizes starting from USD 50 and recently started offeringa Village Banking model to promote services closer to the community. MAXIMA has
been certified for Client Protection since 2018.

February 2015
Sejaya Micro Credit, Sri Lanka
72 thousand clients
Gojo’s ownership: 100.0%
Sejaya, founded by Gojo in 2015, offers group loans and business loans with theaims of poverty reduction, job creation, and social uplift. They are one of only four
licensed microfinance companies in Sri Lanka, regulated by the central bank. They alsocollaborated with Gojo on a financial diaries project in Sri Lanka, contributing to theresearch plans and providing support for project logistics. Sejaya obtained their Client
Protection Certificate in 2023.

August 2015
Microfinance Delta International (MIFIDA), Myanmar
87 thousand clients (Aggregate of lending and saving clients)
Gojo’s ownership: 85.7%
MIFIDA aims to extend financial inclusion across Myanmar. They offer microenterprise,
education, and emergency loans as well as voluntary savings for clients, focusing on
women and rural entrepreneurs. Myanmar is still under political unrest, but MIFIDA
continues to improve their client protection practices, for instance by conducting an
SPI5 audit in 2023. MIFIDA has been certified for Client Protection since 2019 and was
re-audited in 2022.

February 2018
Ananya Finance for Inclusive Growth, India
129 thousand clients (including Prayas Financial Services) / 23 wholesale partners
Gojo’s ownership: 76.9%
Ananya’s mission is to create sustainable and inclusive impact by serving as a bridge
between potential investors and the underserved population of India. They provide
wholesale lending and capacity-building support to MFIs, agrifinance providers, andother SMEs. Through their subsidiary called Prayas, they reach micro-borrowers
through retail loans.

3 Gojo’s ownership is non-diluted basis

12 | Gojo Impact Report

July 2018
SATYA MicroCapital, India
1,710 thousand client (including SATYA Micro Housing)
Gojo’s ownership: 70.7%
SATYA is one of the fastest growing MFIs in India and our largest group company interms of number of clients and GLP. They provide group and individual loans, as well
as loans for WASH (water, sanitation and hygiene), energy, and education. SATYA
obtained their Client Protection Certificate in 2023, receiving a Gold level certificationfrom M-CRIL.

August 2019
AVIOM India Housing Finance, India
87 thousand clients
Gojo’s ownership: 19.9%
AVIOM’s mission is to empower women and provide them with financial independence.
They specialise in affordable housing finance, offering home loans to families insemi-urban areas helping them realise their dream of owning a home. They also
provide finance for home upgrades, extensions, and sanitation.

December 2019
Loan Frame Technologies, India
1,142 SME clients
Gojo’s ownership: 26.3%
Loan Frame is a supply chain finance platform serving the ‘missing middle’ by aiming
to build the largest SME lending marketplace in India. A high-tech startup, they
developed their own cutting-edge proprietary scoring and risk assessment algorithms
that process traditional and alternative data, and has full automation of lending flows
enabling same-day disbursals.

September 2021
CSJC MDO Humo, Tajikistan
302 thousand clients (Aggregate of lending, saving, cards, online banking clients etc.)
Gojo’s ownership: 97.0%
Humo is one of the leading microcredit deposit organisations in Tajikistan, serving
the rural population and SMEs across the country. They offer individual and SME
loans, deposit and remittance services, and a mobile wallet called Humo Onlinethat facilitates quick access to online payment and banking services. Humo has
demonstrated their commitment to client protection by completing an SPI5 audit inMarch 2024.

May 2022
MyShubhLife, India
21 thousand clients
Gojo’s ownership: 19.9%
MyShubhLife is a full-stack financial services platform catering to the underserved‘next half billion segment’, who are not yet part of the formal credit system. They offer
a wide range of financial products from loans to e-filing taxes via their Android app,available in six Indian local languages.

Business Overview | 13

Establishment of
UNLEASH Capital Partners

UNLEASH Capital Partners (“UNLEASH”) is a venture capital fund
focused on early-stage inclusive fintech startups in India, and was
jointly established with our former employee in October 2023. The
initiative is part of a strategy to engage with early-stage tech-enabledstartups to further explore financial inclusion in forms other than
microfinance. By December 2023, UNLEASH raised USD 30 million
from various investors in Japan, with Gojo and Sumitomo Mitsui
Banking Corporation being the anchor investors for its first fund. We
also deputed one of our Executive Committee members as a coGeneral Partner. While the target companies are different from Gojo’s,
UNLEASH’s vision is aligned with the Gojo Group.
Vision: Enable a world where everyone can determine their future.
Mission: Extend financial inclusion by unleashing boldentrepreneurs’ potential.
As of April 2024, UNLEASH made two investments: (1) AyeKart
Fintech, an agriculture-focused fintech platform which reaches
out to an active customer base of over twelve thousand including
farmers, Farmers Producers Organisation, and MSMEs (Micro Small& Medium Enterprises) in the agri-value chain; and (2) CredRight,
a tech-enabled, MSME-focused lender in tier-2/3/4 towns of India,
serving approximately nine thousand MSMEs.

14 | Gojo Impact ReportStories
From the
Field

Fruit seller rebuilding her business
One Burmese client previously ran a prosperous fruit stall at a
popular local pagoda and was able to make between MMK 40,000- 100,000 a day, until Covid-19 and the coup changed everything.
During the pandemic, she was forced to shut down her fruit stall for
long periods, and political instability in the local area put a stop to
the once steady stream of visitors to the pagoda. Initially hopeful thatthings would start to improve after the first wave of Covid-19, shetook a loan of MMK 500,000 from MIFIDA to restart her business.
However, she was soon forced to close again during the second
wave, and had to spend the remainder of the loan on medicines forher family when they caught Covid-19.
At the time, she was looking after her elderly parents, aged 91 and 93.
Her long lack of income meant that, after the loan had all been spent,she had only enough money to buy medicine for one parent at a time.
Unfortunately both parents eventually passed away in the extreme
heat of summer in 2023, with constant power outages and no way tocool down.
She has now restarted her fruit stall in a small way, but says that she
cannot sell much as she does not have enough money to buy shop
stock. When we visited her in June 2023, she was able to earn onlyaround MMK 4,000-5,000 a day, but was hoping that things would
improve in upcoming months with important religious ceremonies,
when more visitors might start coming to the pagoda again.

Stories From the Field | 15

Stakeholder Impact
Our commitment to stakeholder impact
Gojo is committed to improving clients’ circumstances by extending
financial inclusion. At the same time, long-term positive impact forclients is only possible in the context of thriving employees and local
communities, environmentally-sustainable activities and deliveringon our promises to investors. We therefore also focus on bringing a
positive impact to our People, Environment, Community, and Investors.

Theory of Change

Ensure sustainability

Environment

Neutralize harm andsupport adaptation
Long term
profitability

Gojo GroupLess harmLong term
profitability

SupportInvestors
Funding

PeopleClientGood service

Maximised
ImpactSupportSupportEnsure sustainability

Our materiality
Gojo’s materiality takes into account expectations from various
stakeholders to define our priorities for achieving sustainability andimpact, in line with our mission. This assessment enables us toallocate resources to the various issues identified and to predict
long-term risks and opportunities for our operations.

16 | Gojo Impact Report

Community

More inportantGojo Group’s materiality map4

C

Stakeholders

I

F
K

E

J

D

H

G

Less important

B

A

Less importantMore important

Management

A

Environmental impact through our activities

B

Environmental and social impact through ourclients’ activities

C

Impact on our community

D

Commitment to Client Protection Standards

E

Well-being of our clientsF

Health and safety of our employees

G

Happiness of our employees

H

Mission alignment

I

Risk management of environmental /social impact on our businessJ

Business adoption to environmental andsocial changes

K

Business ethics and corporate governance

Gojo therefore prioritises the Client Protection Standards andemployee well-being to maximise impact and realise our vision,building on a foundation of strong governance and business ethics.
Gojo Group’s materiality

Create a world where everyone can determine their future
through financial inclusion

Client Protection Standards• Fair treatment of clients

Employee Well-being• Avoid over-indebtedness• Satisfaction & happiness• Transparency• Health & safety• Client privacy & data security• Diversity & inclusion• Complaint resolution• Fair labour practices• Affordable & accessible product

Strong corporate governance + High level of integrity & business ethics as foundation• Non-tolerance stance towards fraud, corruption, harassment, discrimination, money laundering• Group corporate governance with transparency and accountability

4 We conducted a survey of key stakeholders from February 15 to April 13, 2022, in which respondents were asked to rate the materialityof each issue from 1 (relatively important) to 5 (significantly important). The graph’s x-axis and y-axis starts from the value 3. Respondents
include 3 board members, 8 Executive Committee members, 12 External (investors, advisors, and NPOs), 6 Gojo members, 6 CEOs of groupcompanies, and 4 SPM leads of the group.

Stakeholder Impact | 17

What Is Financial Inclusion?
The definition of financial inclusion is having access to useful andaffordable financial services.

Households with access to financial
services are more resilient to financial
shocks compared to those without.
People with savings accounts are lesslikely to be over-indebted during an
economic crisis.

People with access to digital financial
services such as mobile money accounts
are more financially stable as they areable to save or transfer funds at a lower
cost and quickly making them morefinancially stable.

Effects offinancial access
Access to financial services enablefinancial independence and strengthen
economic empowerment for women. For
example, women who are encouraged tosave are more able to influence decision
making in household, which often resultsin household expenditure being spent on
more useful things.

The receipt of payments such as
wages and government support directly
into an account in combination withother forms of deposit such as direct
deposit makes it easier for more people
to make deposits.

Source: Global Findex Database 2021

Accessamount of cash in a short time, being forced to rely

For years, the primary goal of microfinance hason relatives and friends, or the opportunity loss

been to provide vulnerable and marginalisedof not expanding your business. According to thepeople such as the low-income people in rural

Global Findex Database 20215, financial access

communities with access to financial services,can have several positive impacts on households.

particularly loans, so that they could expand their

The success of access to financial services isbusinesses and improve their quality of life. If you

measured in the percentage of an institution’s

are excluded from financial services, you may faceclients accessing loans for the first time, or in theunexpected risks especially when you have an

overall proportion of people in the country who

emergency and need to come up with a certain

have a bank account at a financial institution.

5 https://www.worldbank.org/en/publication/globalfindex/Report18 | Gojo Impact ReportAccount ownership at a financial institution or with a mobile money service provider (% of population ages 15+)

Tajikistan
39%

Myanmar

3%
2011

48%

2021
23%
2011

India

Sri Lanka

78%

Cambodia

89%
69%

35%

4%
2011

2011

2021

33%
2021

2021
2011

2021
Source: Global Findex Database 2021

Quality and affordability

The number of companies willing to offer loans

Over time, the original problem microfinance set

matters very little if the interest rates are soout to solve has become less prevalent. The Global

exorbitantly expensive that (in the words of one

Findex Database 2021 found that 71% of peopleof our financial diarists6) “it kills your business”,

in developing economies had an account with aor if the repayment channels and schedulesbank, mobile money provider or other financial

are so inconvenient as to be almost unusable.

institutions, compared to just 42% in 2011. Thanks

Gojo’s long-term goal, “To enable the provision

to the global success of microfinance as well asof high-quality affordable financial services in 50

the increasing availability of smartphones andcountries”, thus also reflects this importance ofmobile money services, the proportion of people

thoughtful and realistic product design.

around the world who can truly be said to befinancially excluded, in the sense of not having

Removing “unfreedom”

access to any formal financial services, is smaller

Financial inclusion is fundamentally about

than ever. As access to financial services haveequity — ensuring that everyone has fair andbecome widespread, the quality and affordability

equal access to a variety of high-quality optionsof financial services have come to matter just asthat enable them to achieve their goals. In

much as their availability.

Development as Freedom, Nobel prize-winning

6 Financial diaries are Gojo’s primary source of quantitative data about how low-income people live and manage their money. We record daily
inflow and outflow of money and analyse this to gain insights. As of March 2024 we have conducted financial diaries in Cambodia and Sri Lanka.

What Is Financial Inclusion? | 19

economist Amartya Sen defines poverty andtiny businesses in rural villages are different

deprivation as the lack of social, political andfrom what works for salaried employees in well-economic freedoms. It is not that people in poverty

connected urban centres. With a typical bank loan,necessarily make bad choices, but more often that

repayments are debited monthly from the client’s

the choices available to them are limited and notbank account. This model works because banks’favourable. For example, they may have to choose

typical clients have a bank account, into which they

between selling a precious piece of jewellery atare paid a monthly fixed salary, and the repayment

short notice for a less-than-ideal price or forgoingis made soon after their salary payment so that they

medical treatment for their child or their parents.

can be sure of having enough money to cover it.

Or they may have to choose between letting achild drop out of school to find work or continuing

However, microfinance clients, who are usuallyto struggle on their own with back-breaking labour

low- or middle-income microentrepreneurs, tend

to feed their family.

to earn varying amounts at irregular intervals,
and often do not have or do not actively use bank

Gojo aims to remove one of these “unfreedoms”—

accounts. This means that repayment cannot be a

the lack of access to quality financial services.

passive process but needs to be actively managed

Having good options for financial services should

by both the client and their lender— by the client,provide opportunities for people to preserve

because they need to save and move money soassets such as livestock and jewellery to buildthat they have a lump sum for the repayment on

wealth, or freely decide when to sell them, instead

the appointed day, and by the lender, because theyof being forced to sell them for emergencies.

need to collect payments and establish behavioural

They will have the choice to accumulate cash

norms, relationships and reminders which will help

savings, and to keep their businesses running at aensure that the client gathers a sufficient amountreasonable cost year after year through affordable

for repayment at the right time.

loans. This is why we say that our work primarily
targets three SGDs (Sustainable Development

This more flexible and active management on

Goals): Goal 1: End poverty in all its forms

the part of the lender is also key to managing theeverywhere, Goal 8: Decent work and economic

higher credit risk of the microfinance segment.

growth and Goal 10: Reduced inequalities.

Sudden shocks, such as an illness in the family, or
storm damage to property, tend to set microfinanceclients back further than wealthier people because
they and their communities have fewer resources
to fall back on in times of unexpected financial
outlay or income loss. A great deal of the work
done by microfinance loan officers is relationship

Microfinance business modelbuilding, to help ensure that repayment to their

Micro-sized financial services are needed

institution continues to be on the client’s mind evenbecause the repayment schedules, channels

when they struggle with money management.

and loan amounts that work for people who run

20 | Gojo Impact ReportFor this reason, microfinance tends to be a labour-

Many farmers, for example, tend to use loans

intensive, high-touch business with high personnel

not to purchase assets that generate additionalcosts and high credit costs. Interest rates on

income, but rather as working capital for

microfinance loans can seem high. For example,

large purchases of seeds and fertiliser at thein India, the average microfinance interest rate is

beginning of the season. In addition, manyaround 23.5-25.5% according to Micrometer . Gojo

microentrepreneurs, particularly women, operate

has been working to improve the affordability of

their businesses as a way to complement their

our loan products (and thus their inclusiveness)household’s other sources of income, and may

over time by sourcing cheaper funds for groupscale their businesses up or down to respondcompanies and investing in operation excellence

to their household’s needs. For instance, aand innovation to reduce operating costs.

woman whose child has recently had a baby

7

may temporarily shut down her business for
The outcomes of microfinanceseveral months in order to help look after her new

One of the longest-standing narratives about

grandchild. There are many such factors in the

microfinance is that it should contribute to poverty

lives of microfinance clients that can easily reduce

alleviation. The narrative goes that, by using a loan

the likelihood of seeing increased income as a

to invest in an income-generating asset, a client

result of taking a loan.

can make enough money to sustainably increase
their income, and thus improve their quality of life

Yet microfinance continues to be extremelyin the long term.

popular among low- and middle-income people.
Since increased income cannot necessarily be

However, reality is often not so straightforward.

an expected outcome of borrowing for all clients,

Some, but not all, clients may be able to increase

we need a different framework that articulates

their income thanks to microfinance, but thisthe benefits that microfinance can and shouldincome increase may not be sustained overrealistically be expected to provide to the millions

the long term. Whether income increases asof clients who consider it an essential service.

a result of borrowing and investing dependson (1) whether the borrowed funds are used

In 2020, we created a financial well-being

for purchasing income-generating assets, (2)framework in a first attempt to express and list

whether the client chooses to continue running

the outcomes which we hoped to help clients

their business at the same or a larger scale overachieve through Gojo Group’s products andtime, and (3) whether any other circumstances

services. This framework is a living document thatintervene to increase a client’s expenses or

we will continue to develop and update as our

reduce the demand for their business.

understanding of clients and outcomes evolves.

7 https://mfinindia.org/Resources/micrometer

What Is Financial Inclusion? | 21

Gojo’s Client-Centric Framework

Earn andAccess tofinance(Inflow)

Spend(Outflow)

Money-management Needs(Households)

Business Needs(MSMEs)

Earning Capacity“I have the capacity and skills to earna decent income”

Revenue growth“I grow my revenues because I have accessto customers and market, and know
my customer needs”

Access to finance“I can borrow the amount or withdraw
savings I need instantly when I need it”

Necessities“I have enough to spend on life’s necessities(Food, Shelter, Clothes)”

Daily expenses“I have enough to run day-to-day operations(labor, inventories, utilities etc)”

Wants fulfilled“I have enough to spend on what I want,
not only what I need”

Larger expenses“I have enough to spend on expanding
my business”

Convenience“I can store money safely andconveniently”

Preserve(Save/Invest)& Protect

Access to finance“I have access to reliable financial services toborrow whenever business needs arise”

Savings“I can grow my savings to cover spending onlife goals and times of need”
Protection“I have enough to protect myself andmy family from life’s emergencies”

Know my money“I know my financial status and can manage
my money wisely”
Support dreams“I can support my family’s andmy own life wishes”

Manage &ControlStress free
“I don’t need to worry about my retirement or
my family after my death”

Liquidity“I have enough cash to get my businessthrough unexpected events.”
Investment“I can invest in tangible and intangible assets
for future growth”
Protection“Key business risks are insured”

Know my financials“I know my past financial statements andfuture projection”
Support dreams“I can achieve my company’s goals”
Stress free
“I can go to sleep peacefully withoutworrying about business”“I determine my own future”= Gojo’s mission where everyone can determine their own future

22 | Gojo Impact ReportMIFIDA client in Yangon who boughta sewing machine /Taejun Shin

The primary output that we expect from Gojo’s

we expect to increase clients’ ability to accessservices are increases in access and utility — ourfunds in the quantity they need and at the times

services need to reach those who are in need,when they need them, and to gather lump sums toand also must be useful and beneficial to improve

cope with emergencies or achieve their goals. The

their quality of life. In other words, the expectedsustained ability to do this over time should leadoutcome of Gojo’s services is an increase in

to clients having an increased sense of their own

high-quality options for our clients when managing

agency and increased confidence in their ability

their money and achieving their present and future

to manage changing circumstances and achievegoals. By providing loan, saving and remittancetheir goals.

services to underserved and unserved groups,

What Is Financial Inclusion? | 23

How Clients Experience Our
Products and Services

Gojo Group conducts two internal surveys, one

Satisfaction scoresfor current clients (client satisfaction survey)

The average client satisfaction score acrossand another for clients who finished paying

Gojo Group for FY2024/03 is 95%9. The ease ofoff their loans (exit survey), to understand ourapplying for a loan and the speed of obtaining

clients’ experience of products and services.

it were appreciated by clients across the board.

Gojo developed an exit survey template and best

However, when asked for the top two thingspractice guidelines that can be implementedclients disliked, they mentioned that they would

across the group, and the template was piloted

prefer lower interest rates and fees as well as

by MAXIMA. The exit survey helps us understandhigher loan amounts.

the reasons behind client exits8, positive andnegative, and gather feedback from clients. Client

Resiliencesatisfaction surveys have been implemented for

The financial resilience of clients can bea few years and were implemented by MAXIMA,

understood as their ability to cope with

Sejaya, MIFIDA, and SATYA in FY2024/03.

emergencies. Clients’ ability to cope withemergencies and the options they have to cope

Learning from client exits

with the emergencies are two impact indicators

The majority of the MAXIMA client exits (55%)

we measure through surveys. The question wewere because clients had enough money andask is, “Imagine that you have an emergency

did not need another loan, while only 4% of

and you have to pay [1/20 GNI per capita in local

the exits were due to clients being dissatisfied

currency] within the next month. How easy orwith MAXIMA’s products or services. The

difficult would it be to come up with this money?”.

major requests we received from the clients

38% of MIFIDA clients, 72% of MAXIMA clientswere to lower interest rates and to revise write-

and 43% of Sejaya clients said it would be “veryoff conditions. To address these, MAXIMA’s

difficult” to come up with this amount in 30 days.

Operations team intends to conduct a market
survey to understand client preferences better.

8 Gojo defines a ‘exited client’ as a client who has not renewed their loan within 3 months
9 Weighted average of overall satisfaction scores for participating group companies, calculated against number of clients as of March 2024

24 | Gojo Impact ReportA MIFIDA client in Yangon, running a small restaurant /Taejun ShinA reliance on informal networks continues to be a

emergency by borrowing from their workplace,strong coping mechanism in the face of financial

friends and family, or an informal money lender. In

emergencies for our clients. Most of them said

contrast, 33% of MAXIMA clients said they would

they would come up with money during an

use their savings to cope with the emergency.

Client satisfaction survey results (FY2024/03)

MAXIMA

SejayaMIFIDA

SATYA

94%

92%

95%

95%

n = 247n = 374

n = 590n = 2,400

How Clients Experience Our Products and Services | 25

Sejaya’s client in rural Sri Lanka who
produces crafts for tourists /Taejun Shin

Understanding
Over-Indebtedness
In this impact report, we not only showcase

aggressively selling loans that clients do not need.

positive impact, but strive for a balanced

Yet, despite rigorous checks, clients become

assessment by studying the negative impact as

unable to repay loans from time to time.

well. Over-indebtedness is one of the outcomesa client can experience as a result of borrowing.

Over-indebtedness, or debt distress, is theThis section aims to shed light on the complex

condition where one’s debt obligations exceed

causes of over-indebtedness, how debt stressone’s capacity to repay them. No responsible

affects clients’ lives, and what Gojo Group is doing

lender enters into a lending agreement where ato prevent and respond to over-indebtedness.

borrower’s repayment capacity is less than their
combined debt obligations from the outset.

Many MFIs and banks, including Gojo’s groupcompanies, have an array of routine processes

One’s ability to repay debt is a function of two

and internal controls based on a solid credit policy

things: one’s present and future resources, andto ensure that clients do not borrow beyond their

one’s total financial obligations. Neither factor

capacity to repay, and that loan officers are notis static, but as long as resources for repayment

26 | Gojo Impact Reportcontinue to exceed financial obligations forMoreover, even if there are no issues at the timethe duration of the loan, the borrower is able toof loan assessment, if a borrower decides tomanage. The trouble starts when, for whatevertake additional loans post disbursement fromreason, a borrower’s resources decrease or theirirresponsible lenders, there is not much a lenderfinancial obligations increase such that they

can do to stop the borrowers from being over-no longer have enough money to cover all theindebted. The borrower’s lack of financial literacy

payments that need to be made.

can further add to this situation.

Any number of circumstances can intervene toOnce over-indebted, both the borrower and themake what seemed like a manageable debt atlender are forced to make unpleasant and difficult

the time of signing a loan agreement spiral out

choices: the borrower needs to decide what not toof control. To begin with, a borrower’s income isspend their limited resources on, while the lendertypically volatile and difficult to grasp accurately

needs to judge how best to encourage borrowers

due to its informal nature. Even if there is ato repay — so that the borrower will continue tostringent loan assessment process, it is often

keep repaying, while not feeling pressured to flee

challenging to predict the repayment capacity ofor make long-term or unacceptable sacrifices.

borrowers in the long run. Lenders rely on credit
bureau information when and where possible, but

How lives are affected

not all countries have a well-functioning credit

Borrowers feel pressured and stressed whenbureau, and even when they do, the bureaus doover-indebted. Most borrowers consider repaying

not cover lending from informal lenders suchtheir loans an important obligation, and try to

as local moneylenders, relatives or neighbours,

make ends meet even when they are in financial

making it difficult to have a full picture of a

distress. There are many tactics that can beborrower’s debt situation.

considered, starting with increasing workload,tapping into other sources of funds such as

On top of that, there are always risks ofrelatives and savings, or selling assets such

emergencies arising. An illness in the family, an

as jewellery. Then there is an effort to reduceargument with a previously generous relative,

expenses, such as cutting down on food, ora pandemic, natural disasters, an economic

delaying other important expenses. If this is notcrisis resulting in loss of income, or even theenough, borrowers consider making long-term

appearance of an attractive new lender offeringsacrifices such as selling land or pulling children

quick and easy credit can place strain on aout of school.

borrower’s resources and lead to distress.

Understanding Over-Indebtedness | 27

Stories
From the
Field

Making tough sacrifices
A woman in Cambodia used to run a successful grocery stall andsewing business, providing a stable income for her family of four.
Her husband’s driving job added to their financial security. However,illness forced her to stay home, and the economic downturn left her
husband jobless. Now, his fishing income barely covers their basic
needs, bringing in only USD 5-10 per day.
A difficult choice had to be made. Due to mounting debt, she couldn’t
afford to send both children to school. Their son, the elder one,
continued his education, but his younger sister had to drop out. She
had initially taken a USD 3,000 loan from MAXIMA to improve theirhome and buy a vehicle for her husband’s business. She took an
additional USD 1,500 loan to further support her needs. Although she
managed to repay that initial loan, the additional loan became toomuch to handle after her illness. She ended up taking a USD 1,500
group loan from another MFI that’s currently in arrears, although she
has successfully negotiated a temporary delay.
There is a glimmer of hope, though. The staff at MAXIMA has been
understanding. When she requested a reschedule on her loan, they
were open to working with her. While they send reminders twicea month and conduct occasional visits, they support looking for asolution, not just collecting the debt. Her situation shows us thechallenges of over-indebtedness, where families have to make toughsacrifices to survive on a limited income.

28 | Gojo Impact ReportPrevention of over-indebtedness

repay the loan at the time of the loan assessment,

Preventing over-indebtedness is one of themonitoring loan officer incentives and the risk

priorities for most lenders and the cornerstoneof aggressive sales, and setting PAR (Portfolio

around which loan assessment and monitoring

At Risk) thresholds for portfolio monitoring at aprocesses are built. MIFIDA, Gojo’s groupmanagement level.

company in Myanmar, for example, follows afeasibility and capacity assessment process for

Financial service providers can conduct

every new loan application received, collects

assessments of their client protection practices

credit bureau records and a wide variety ofusing Cerise+SPTF’s SPI audit, of which the Client

documents from household members, andProtection Standards are a subset, or through theconducts in-person visits to verify home

Client Protection Assessment questionnaire. Byownership, household members’ income, andengaging an approved rating agency to conduct

the existence of a genuine functioning business

the Client Protection Assessment, financial

operated by the client. Loan decisions are madeservice providers can seek to obtain certification

not only on the basis of guarantees or clients’ pastof their practices, which builds their credibility

repayment behaviour, but also on the basis of aand provides assurance to impact-focused

fresh repayment capacity assessment conductedinvestors. Gojo requires group companies toat the time of the new loan application.

complete the commitment step of the Client
Protection Pathway11 and to obtain and maintain

The eight Client Protection Standards,

Client Protection Certification as soon as they area framework managed by the non-profit

able. All consolidated group companies except

Cerise+SPTF , set out a series of guidelines forfor Ananya have already completed the Client

the delivery of financial services to microfinanceProtection Pathway commitment. Even thoughclients, who are often marginalised or vulnerable

the certification process is intensive and requires

people. The second of these standards isa significant time commitment, four of the group“Prevention of over-indebtedness”, and includes

companies have obtained Client Protection

best practices such as conducting a thoroughCertification as of March 2024.

10

cash flow analysis to review the client’s ability to

10 Cerise+SPTF is a joint venture of two nonprofit organisations which are global leaders of social and environmental performance
management in the field of financial inclusion. https://cerise-sptf.org/aboutus/
11 A roadmap provided by Cerise+SPTF, defining steps that a financial service provider can take to implement the client protection practices
necessary to avoid harming clients and communicate this progress to investors.

Understanding Over-Indebtedness | 29

MAXIMA Microfinance Plc.,
Cambodia

Milan, Novembre 2023

MIFIDA, Myanmar

Milan, December 2022

Measurement and monitoring

Some MFI clients who are repaying their loans

PAR (Portfolio at Risk) is the main indicatoron time month after month do in fact find loan

financial service providers look at to monitor debt

payments difficult to manage and have to makestress and over-indebtedness among clients.

small sacrifices to meet their monthly obligations.

PAR is a measure of the value and percentage of

For instance, respondents from our Sri Lankaa loan portfolio that is overdue, typically divided

financial diaries project tell us that “Our quality of

into brackets such as PAR1 (more than one day

life is depressing since there won’t be any drastic

overdue), PAR30 (more than 30 days overdue) andchanges until we settle our loans”, and “It is

so on.

challenging to settle loans with the uncertainty oflife and business. Although it is doable with time,

The problem with PAR as an indicator of over-having loans is a constant mental burden for us.”indebtedness, however, is that clients’ struggles
with debt stress often start some time before

Given that loan payments can feel stressful andthey first begin to repay late. Rather than renege

burdensome even to clients who repay on time, iton their regular commitment to repay their loans,

is important for lenders to identify clients who aremany clients will sacrifice spending on food,seriously struggling and to respond appropriately

clothing, medicine, or sell small assets such as

before clients slip into PAR. Tomohiro Isozaki, CEO

jewellery before they ever miss a payment. So PAR

of MAXIMA, says, “Early identification of potential

can at best be thought of as a lagging indicator of

problems is always very important. If detection isdebt distress.

delayed, clients may face severe difficulties, such

30 | Gojo Impact Reportas borrowing from illegal lenders to repay debts or

MIFIDA said, “Some clients are in dreadfulsacrificing their own living standards to make ends

situations and don’t have any money. Threatening

meet. When clients are already in a challenging

words are not okay, we can only speak politely andsituation, we handle it on a case-by-case basis.

negotiate with the client. If you cannot convince

For example, if the difficulties are temporary, wethem by speaking politely, there’s no way they will

might consider restructuring the loan to reducegive you money when you threaten.”

repayments for a period, before returning to
the normal payment schedule. In cases like a

Collection strategies employed vary depending

divorce, where the original loan was taken by bothon how late the payment is and on the client’s

husband and wife, we might split the loan into

ability and willingness to repay. In the early days

separate obligations for each individual.”of a missed payment, companies’ call centres
contact clients to remind them of the due date

Collection practices

and loan officers visit clients to check on them.

Over-indebtedness is also undesirable andWhen payment continues to be late, higher-

uncomfortable for lenders. Once clients’ranking employees such as the branch manager

repayment difficulties have been identified, lenders

and the regional manager start visiting the clients.

must exercise judgement as to the root causes

These visits also serve the purpose of enablingof the clients’ situation, the extent to which these

the company to thoroughly assess the clients’drivers of over-indebtedness are likely to affectdifficulties as well as their ability and willingness

the rest of the portfolio, whether they need to taketo repay.

action to prevent similar cases in future, and mostimmediately, how they will respond to the over-When payment is more than a month late andindebted clients.

it starts to become clear that the process ofrecovery is not going to be straightforward, theGojo’s SPM team has worked to increase our

key strategy employed by group companies

visibility into debt recovery practices at groupis to maintain consistent contact and a goodcompanies to better assess and address client

relationship with the client by visiting regularly

protection risks. In collaboration with Gojo’s

and politely reminding clients of the overdueInternal Audit team, they have visited andbalance. One common tactic that helps loancollected observations from almost all majority-

officers strike a balance between holding clients

owned companies about how they manage theaccountable for payment and accommodatingcollections process.

their financial struggles is to ask for a promise ofwhen they might be able to repay and to visit theWe found that loan officers responsible forclient again on the agreed date. For clients facing

collections spend a great deal of time visiting

genuine medium-to-long-term difficulties suchand consistently following up with over-indebted

as serious health issues or major crop failure,clients. They tend to understand clients’companies offer solutions such as restructuringsituations well and display a good understandingor rescheduling loans on a case-by-case basisof collections practices. One loan officer fromfollowing internal policies and regulatory

Understanding Over-Indebtedness | 31

guidelines. Where clients are able and unwillingMarket-level risk management

to repay, group companies apply firmer pressure

The causes of over-indebtedness are complex.

by warning of and initiating legal proceedings

Regulatory and market-level factors such as thepast a certain number of days overdue. However,existence of a well-functioning credit bureau,

the process of settling a legal claim in court could

the proliferation of unregulated or informal

be long and expensive compared to the actual

lenders which are not registered, and the overall

amount due, so it is quite rare for lenders to enter

performance of the country’s macroeconomy

into litigation with their clients.

can seriously impact client credit quality and theenvironment in which lenders operate.

Although loan officers tended to have a good
general understanding of appropriate andIn such an environment, small MFIs which areinappropriate collections practices, not allserious about responsible lending face challenges

companies had written policies or specific training

in finding relatively unsaturated client segments

about collections practices yet, and loan officers

with a genuine need for microfinance and goodin some companies did not fully understand what

repayment capacity. According to Gojo’s COO

the Client Protection Standards were. Gojo’s

Gürol Michael Sari, “The way to go in overheated

SPM team is now working with the Operations

markets is to come closer to the client.” Weteam to develop and disseminate more specificbelieve it is important to engage with the local

collections guidelines which can be helpful forcommunities to gather high-quality client dataclarifying practices that may fall into grey areas.

on the micro level. On the macro level, we will

The collections guidelines will address questions

continue the dialogue with industry associations

such as: What is the maximum number of loan

and regulatory authorities while closely monitoring

officers who should visit the client at any one time?

the trend of the market and other microfinance

What is the maximum amount of time loan officers

institutions. As a responsible financial service

should wait outside a client’s house, if the client isprovider, we recognise that it is our responsibility

not at home?

to continue updating our client protection andrisk management frameworks, and to ensure theireffective implementation in the field.

32 | Gojo Impact ReportBoat driver in Ayeyarwady Region. The region isfull of rivers so people use boats like buses. /Taejun Shin

Social Performance
Management
The role of SPM is even more important in the

The USSEPM encompass seven dimensions offace of over-indebtedness. Prevention of over-a financial service provider’s operations, ranging

indebtedness is one of the key components offrom Dimension 1: Social Strategy to Dimension

Client Protection Standards, which is an integral

7: Environmental Performance Management.

part of SPM. Gojo promotes SPM across group(Dimension 7 was newly added in 2022 due to thecompanies following industry frameworks. The

increasing interest in climate change and how it

USSEPM (Universal Standards for Social andcan affect clients who are typically vulnerable.)

Environmental Performance Management) are a

Financial service providers, investors and rating

set of best practices developed by Cerise+SPTF

agencies can use a range of freely available tools

to establish a common definition of responsible

to assess an organisation’s practices for thefinancial services across geographies. They are

purposes of due diligence and improving practice.

12

a key industry framework used by regulators,
impact investors and financial service providers.

12 https://cerise-sptf.org/universal-standards/

Social Performance Management | 33

Gojo applies the USSEPM framework in every
phase of our operations. In the pre-investment
phase, Gojo’s SPM team conducts social due
diligence using Cerise+SPTF’s ALINUS tool13 toassess client protection and SPM practices inpotential investees, alongside standard business,financial and legal due diligence processes.
Post investment, Gojo requests the new groupcompany to appoint a designated SPM Lead,if not yet done already. Gojo SPM team works
closely with the SPM Lead of the new groupcompany to (1) complete the commitment stepof the Client Protection Pathway and obtain
Client Protection Certification, and (2) conduct

Source: Cerise+SPTF website

SPI audits accompanied by a qualified auditor atleast once every three years. Once the gaps are

MIFIDAidentified through these initiatives, SPM action

MIFIDA’s overall score in the audit was 60%, whichplans are defined and implemented. Typicallyis below the global benchmark of 64% and theactions include setting up an SPM Committee atSouth and South-East Asia benchmark of 76%.

the board level, setting social goals and targets
annually, introducing or improving data collection

MIFIDA as a business and its clients have faced

through surveys, and conducting SPM trainings

many difficulties in the aftermath of Covid-19 andfor the board, management and other employees.

the coup in Myanmar. Many long-standing clients’Gojo SPM team supports these initiatives throughbusinesses have been severely impacted, withstandardisation of survey manuals, policies andclients becoming much poorer than before andprocedures across the group together with theunable to repay their loans. Despite the challenges

group company SPM Leads, usually meeting

which loan officers and clients have grappled withweekly or bi-weekly.

in the past few years, the audit found that there isa strong ethical culture and adherence to Client

SPI audits conducted in FY2024/03

Protection Standards among MIFIDA loan officers,

SPI audit, which measures the progress of SPM

and that loan officers display deep sympathy andpractices at financial services providers, wasrespect for struggling clients. The repayment

conducted by MIFIDA in Myanmar and Humo

capacity assessment process is well-documented

in Tajikistan, accompanied by qualified SPI

and followed, and the implementation of a new

auditors14 from Gojo. This was the first time either

call centre and complaints mechanism with theorganisation had undertaken an SPI audit.

support of Gojo Operations team has provided

13 ALINUS is a tool developed by Cerise+SPTF supporting robust social and environmental investor due diligence.
14 SPI auditors are qualified by Cerise+SPTF upon a series of training and SPI audit experience in the field.

34 | Gojo Impact Reporteasier access to complaints channels and morein board meetings, financial issues haveefficient complaints handling for clients.

tended to overshadow discussions of social
performance in the past few years. To address

Human Resources policies were comprehensive

these issues, MIFIDA has implemented regularand well-documented, with regular on-the-job

client satisfaction and exit surveys, as well as an

training for employees, leading to a high score

employee satisfaction survey, and has set up a

in Dimension 5 of the audit. However, the audit

board-level Social Performance Committee, which

also found that many employees were feelingmeets quarterly to discuss key social performance

demoralised and isolated due to the political andinformation such as employee turnover data,

economic challenges of recent years, and thatsurvey results and complaints reports.

more could be done to provide opportunities
for employees to share feedback, exchange

MIFIDA implemented an E&S (Environmental

knowledge and have fun as a team.

and Social) policy and an environmental risk
assessment process for large loans in 2022, but is

The gaps in Dimension 1 (Social Strategy) andstill at the beginning of its environmental strategy.

Dimension 2 (Committed Leadership) can

Gojo is now supporting MIFIDA to calculate thelargely be attributed to the findings that MIFIDAGHG (greenhouse gas) emissions of its operations

has not had the capacity to collect or analyseand to explore possible green finance products fordata on outcomes and that, at discussions

climate adaptation.

Universal Standards Scores by Dimensions

53

Social Strategy

Overall Score

60%

Global Benchmark: 64%
South and South-East Asia Benchmark: 76%
Qualified Auditor Cheriel Neo
PeriodMay - October 2023

Field Visit

June 2023

57

Committed Leadership
Client-centred Products
and Services

68

Client Protection

78

Responsible Human
Resource Development76

Responsible Growthand Returns
Environmental Performance
Management

62
27

Social Performance Management | 35

Women in a market of Yangon, selling incense trees,
which smell good when you burn them /Taejun Shin

Humo

Development (ClimAdapt, Green Economy

Humo received an overall score of 67%, which

Financing Facility, etc) to issue green loans andis higher than the global benchmark of 64%,

conducting relevant client training. In FY2025/03,

but lower than the Europe and Central Asia

Humo aims to further enhance their efforts bybenchmark of 80%.

conducting a GHG emissions calculation withsupport from Gojo.

Humo displays excellent performance inDimension 6 (Responsible Growth and Returns),

Other notable areas of performance are inwhich can be attributed to their responsible

Dimension 4 (Client Protection) and Dimension

pricing of products. For instance, Humo does not

5 (Responsible Human Resource Development).

charge any fee for the use of deposit accounts

To prevent over-indebtedness, Humo deploys

which makes it an affordable choice for low-

a thorough repayment capacity assessment

income clients.

process and includes PAR in the performance
evaluation criteria for loan officers to mitigate

Humo has also been making considerable

the risk of aggressive sales. Humo has a well-progress towards ensuring good environmental

detailed collections policy that places particularperformance covered under Dimension 7,

emphasis on respectful treatment of clients andby adopting an E&S policy, conducting E&S

Humo’s complaints management system works

risk assessment for loans, and partneringwell to address client concerns. Although a risk

with international organisations such as theof aggressive sales was not found, Humo canWorld Bank, International Finance Corporation,

strengthen its mechanisms to prevent aggressive

Asian Development Bank, KfW Bankengruppe,

sales by setting a threshold for the number of loan

and European Bank for Reconstruction anddisbursements per branch, the number of loans

36 | Gojo Impact Reportdisbursed per loan officer, and the number ofSimilar to MIFIDA, while the Humo management

clients per loan officer.

and board were found to be socially-minded andcommitted to the social mission, the relatively low

Employees received sufficient training to performscores in Dimensions 1, 2 and 3 (Social Strategy,

their duties well and were found to be committed

Committed Leadership and Client-centredto Humo’s social mission. Although employees

Products and Services) may be attributed to thewere found to be satisfied at work, a specific arealack of systematic collection and analysis ofof inquiry is the extent to which employees aresocial performance data and the absence ofsatisfied with their salaries. As a first step, Humoa board-level SPM Committee to take prompt

aims to understand the level of salary satisfaction

actions on SPM matters. To address these points,

amongst employees through the employee

Gojo is actively working with Humo to implement

satisfaction survey in FY2025/03 and takea client satisfaction survey and client exit survey

additional steps as needed.

in FY2025/03 as well as ensuring a regular board
committee discusses SPM matters.

Universal Standards Scores by Dimensions

54

Social Strategy

Overall Score

67%

Global Benchmark: 64%
Europe and Central Asia Benchmark: 80%
Qualified Auditor Arya Murali
PeriodMay 2023-March 2024

Field Visit

August 2023

60

Committed Leadership
Client-centred Products
and Services

69

Client Protection

78

Responsible Human
Resource Development77

Responsible Growthand Returns
Environmental Performance
Management88
43

Social Performance Management | 37

Stories
From theField

A business-minded first-time borrower
During our field visit for MIFIDA’s SPI audit in Myanmar, we met avery business-minded and entrepreneurial farmer in Shan State.
He had recently taken his first loan of MMK 300,000 from MIFIDA tobuy fertiliser for his crops. He explained that he had not previously
needed to take any loans for his business, but recently, due to therising prices of inputs such as seeds and fertiliser, he decided to takea loan from MIFIDA for working capital.
To ensure a profit in spite of the increased costs, he is now focusing
on managing the quality of his tomatoes, chillies and cabbages
so that he can eventually sell as many crops as possible for thehighest prices possible. He works with an agent who buys all his
crops from him and sells them in a market further away. In order to
get the largest possible profit from his land, he plants fast-growing
crops such as tomatoes in an agile manner — before deciding which
vegetables to grow, he regularly calls his agent and researches
market prices of various crops on the internet to ensure that hechooses vegetables which fetch the highest prices.
He told us that he started farming in 1997 with just one acre of his
own land, and gradually bought surrounding plots of land with theproceeds from his sales. He now owns and farms eight acres of land.
Not content with just one income source, however, he also has a job
as an employee of a nearby mining company and manages a further
15 acres of land locally for a wealthy landowner who lives far away inthe capital.

38 | Gojo Impact Report

Family in a village in Ayeyarwady,attending an event held by a Buddhism temple /Taejun Shin

Innovation
on business skills and digital tools including acommunity platform.
A digital finance innovation program to reach

We are providing these young entrepreneurs the

young entrepreneurs

opportunity to boost their financial and digital
literacy to contribute to their economic growth.

In FY2024/03, Gojo launched a new initiative

Our digital tools also assist clients in creating theirin digital financial inclusion called the “Pasio

digital storefronts to sell their products in the online

program” in partnership with Silatech. Based inmarkets. Ninety percent of the clients are women,

Doha, Qatar, Silatech is an international social

and all female clients have reported Pasio being thedevelopment non-profit that promotes large-

first digital solution they try.

scale job creation and entrepreneurship for youth
worldwide. Based on our shared goals, the program

The program is implemented with Gojo’s grouptargets young entrepreneurs aged between 18

companies in Cambodia, India, and Sri Lanka to

and 35 years old by providing income-generating

service the local communities’ needs. In Augustloans and easy loan management functionality

2024, the Pasio program managed to reach 63

at their fingertips, combined with education

thousand clients.

Innovation | 39

Client Stories
Saving for a dream
A 28-year-old woman in Sri Lanka wasunemployed and distant from realising her dreamof studying pharmacy. She was inspired by her
cousin’s success and secured a loan throughSejaya, Gojo’s group company in Sri Lanka, andstarted a mushroom business from home. In
four months, she managed to grow her businessand produce ten packets daily, and significantly
increased her monthly income. With businessinsights from the Pasio community, she is
now expanding her venture and saving for her
pharmacy degree. She uses the Pasio app toconnect with the community and view her financialtransactions with efficiency and transparency.

Career shift to an independent
entrepreneur
A 31-year-old woman in Sri Lanka decided tomake a significant career shift from working in afactory to starting her own textile shop. Driven by adesire for financial independence, she began her
entrepreneurial journey with a loan from Sejaya.
Her initial success in textiles led her to explore
further opportunities within the Pasio community,
where she discovered the potential of additionallyselling handcrafted wooden culinary items. Today,
she is thriving with her businesses, thanks in partto her decision to embrace new opportunities
and to use community-driven insights forentrepreneurial growth.
Top/bottom: Pasio clients demonstrating their products during
a field visit

40 | Gojo Impact ReportImpact and challenges

changer. Not only were we able to launch digital

In April 2024, Gojo and Silatech conducted a fieldloans in Sri Lanka itself, but to pair microfinancevisit to evaluate the program in Sri Lanka. The

with educational training for our clients is a unique

team concluded that the Pasio program is theimpact we are creating.

first of its kind in the country, with the following
benefits to the clients:

Our clients are mostly located in rural areas andlack access to digitised markets. By creating• Affordable pricing

access to these markets with our Pasio program,• Transparency, no hidden or additional fees

we are boosting their livelihood and economic• User-friendly app, client business website andgrowth. They are acquiring the capacity to upload

community

their products and services online by elevating
their knowledge and skills in digital literacy, andWe also identified some challenges: the hardshipare able to reach a wider market with ease ofof accessing clients in extremely rural areas

access to the Pasio communities. We are also

and the low ownership of mobile phones inproud to announce that the majority of our clientsthe community. Mr. Ernest Dube, Monitoring

are young women between the ages of 18 andand Evaluation Senior Specialist of Silatech,

35; through the Pasio loans they are supporting

commented, “Silatech is implementing overtheir households and are empowered to promote

100 projects globally but through this field visit I

further gender balance in their community. We will

was able to assess and recognize that the Pasio

continue to sustain our efforts in the near future toprogram is one of the most successful projects

increase the exposure of the Pasio program and tothat we are currently funding.”

be able to assist a higher number of clients.”

Gürol Michael Sari, COO of Gojo and supervisor

The Pasio program will continue to evolve throughof the program, commented: “The rapid growth

the continuous improvement of its services,of the Pasio program and its unique proposition

expanding into new regions and addressing rising

to distinguish Gojo’s mission in the microfinancechallenges. To learn more about this initiative,

industry through this digital program is a gameplease visit our website at: Pasio.io.

Innovation | 41

SCalligraphy workshop during a Group offsite in Tokyo /Charm Cai

PeopleAs Gojo has grown, the number of employees

improve employee well-being by valuing diversity

across the group has also significantly increased inand creating an enjoyable work environment

the past few years, with ten thousand employees

where everyone can feel motivated to achieve

in Gojo’s consolidated group companies as ofGojo’s mission. In order to understand and improve

March 2024. In the business of financial inclusion,

our impact on employees, we have collected data

which is built on frequent face-to-face interactions

on various indicators which help us to measurewith clients, the well-being of employees affects

diversity and satisfaction across the group.

the quality of service provided to clients. We aim to
Number of employees in Gojo’s consolidated group companies (k)
10.3

7.2
5.3

6.1

3.5
0.5
2018

2.1
2019

42 | Gojo Impact Report

2020

2021

2022

2023

2024

Diversity of Gojo holdco members
Nationalities

France 2

China 1

Germany 1

Taiwan 1
Japan 12

Stateless 1
Philippines 1
Total 36
members

Indonesia 1
Singapore 1
Myanmar 1
India 14

Gender15

Non-management
Members

13

1
Management
7

4
Directors
3

FemaleMale

Building a diverse team

In terms of gender as of March 2024, four out

Diversity has been a key value for Gojo fromof seven of Gojo’s directors are women. The

the beginning. At the holding company level,

percentage of women members in Gojo has

11 nationalities are represented among our 36

increased significantly to 44% from 31% in

members, with Indian members making up the

FY2023/03. Gojo has made significant efforts

single largest group. While Gojo originally started

in diversity-oriented hiring, resulting in a morewith a majority of Japanese members, we havebalanced gender ratio among its members.

undergone a natural shift toward increasing hiring

However, the company’s eight-member Executive

from India as the majority of our clients are also

Committee remains predominantly male, with only

based there.

one woman serving in the group. This has resulted

People | 43

in a concerning gender imbalance in Gojo’s seniorconsidered to be dangerous for women. However,management, which we are working to remedy.

some group companies started to hire female loan
officers, taking safety measures. This makes sense

Across Gojo Group, women make up only 13%

not only from a gender equality perspective but

15of employees. The primary reason for this is that

also because many of our clients are women andin some countries such as India and Sri Lanka,

it will be easier for them to familiarise themselvesloan officers, who make up the majority of ourwith female loan officers. Furthermore, 29%15

employees, tend to be men. This is typicallyof senior managers in group companies arebecause the job of a loan officer requires a lot of

women, and in each company there are women in

travelling on motorbikes carrying cash, which is

influential management positions.

Employee satisfaction survey results (FY2024/03)

Gojo

MAXIMA

Sejaya

96%

72%

72%

MIFIDA

Ananya

SATYA

84%

97%

93%

Providing an enjoyable workplacecollaboration across departments,” “Executive

In Gojo’s employee satisfaction survey, conducted

Committee members are well aligned on strategy

in FY2023/03, respondents showed strong

and priorities,” and “Sufficient opportunities topositive feedback on statements such as “I enjoy

attend training” compared to last year. The overall

working with Gojo members,” “Gojo is maintaining

happiness rate at Gojo increased dramatically tofocus on its vision,” “I’m proud to work at Gojo,”

96%, up from 71% in the last year, reflecting theand “I am given enough autonomy to decidecompany’s focused efforts on previously low-

how to do my work.” Additionally, the survey

scoring areas. However, satisfaction with “work-life

conducted in FY2024/03 revealed significant

balance” has declined since the last survey.

improvements in areas like “I feel there is sufficient
15 Employees of consolidated group companies (excluding SATYA Micro Housing and Prayas Financial Services).

44 | Gojo Impact ReportIn FY2024/03, we prioritised fostering

companies and create knowledge-sharing

collaboration among Gojo members by creating

platforms. With this in mind, we initiatedmore opportunities for interaction. Alongsidebi-monthly HR calls where HR representatives

initiatives like Fun@Work, where members

from all group companies are invited to discussgather to play games, and Power of One, which

various topics and share best practices. We havehighlights members’ life-changing experiences,focused on topics which will improve overall

we also placed a strong emphasis on training andemployee well-being, such as training, employee

upskilling. Members were encouraged to create

motivation strategies, worker safety measures, andtheir individual development plans and selectpromoting physical and mental health.

external training programs that they wanted topursue, funded by Gojo. Additionally, numerous

In June 2023, we organised a group offsite incorporate training sessions were conductedTokyo for all Gojo members, directors and CEOs

on topics such as workplace safety, the use ofof our group companies. This event, including

artificial intelligence, diversity and inclusion,

the shareholders’ party, provided an excellent

prevention of sexual harassment, anti-money

opportunity for members and other stakeholders

laundering, and managerial skills.

of Gojo to connect with the CEOs. As part ofthe event, we conducted a calligraphy exercise

Sharing best practices across the groupfocused on the five values of Gojo, reinforcing

We have been focusing on increasing

our group culture. The offsite helped us develop

opportunities to connect with our groupalignment on our Guiding Principles.

People | 45

Stories
From theField

A helping hand for an elderly businesswoman
We met a 70-year-old woman who sells textile cloth materials to makefurniture, cushion covers and kurpacha (traditional thick cotton/wool mattress used for seating) in the Korvon market in Dushanbe,
Tajikistan. When she decided to start this business ten years ago,
she tried approaching several banks, but was turned away by thembecause of her old age. She finally found respite in Humo, the only
company willing to lend to her. She has been a Humo client for the
past ten years.
She has both credit and deposit accounts with Humo. Although she
is aware of Humo’s mobile app and digital loan product, she says hereyes are too weak to use her mobile phone and enjoy these offerings.
Every year she takes a loan of TJS 250,000 for a period of one year topurchase raw materials from Uzbekistan, which she then stitches andsells in the market. With the profits from her business, she opened
five other sales points, two of which she eventually sold to buy twohouses for her family.
While she is not able to recall how much she earns or spends
because she does not maintain a book, she says she tries to saveevery week. She visits the nearest Humo branch almost every otherday and deposits at least TJS 60,000 on each visit. Now she is able
to use her savings to further expand her business. She has two
sons, one daughter, and her husband at home. Her children are all
educated and she has opened a savings account for them as well.

46 | Gojo Impact ReportMain road reaching to Ayeyarwady /Taejun Shin

Environment

Mapping the road towards environmental

as droughts and floods can result in reduced

sustainability

agricultural productivity leading to food insecurity

The climate is changing at an unprecedented

and income loss. Landslides, flooding, andpace. All around the world we see news headlines

extreme storms can also lead to the collapse ofabout how summers are getting hotter, weather

houses and the displacement of our clients.

conditions are changing, and natural disasters
are increasing in frequency. Unfortunately, theWe try our best to be environmentally responsible.

climate crisis is an unfair one — in the next five

In March 2023, Gojo adopted the Environmental

to ten years, those who will suffer the most from

Policy and Roadmap. They consist of three focus

it are rural people in developing countries, whichareas: (1) controlling our GHG emissions anddescribes approximately 80% of our client base.

reducing them to a minimal amount, (2) including

Climate change affects our clients in various ways.

environmental considerations pre- and post-

For example, the increased variability in rainfall

investment, and (3) offering green products andpatterns and temperatures impacts crop yields

services to help reduce negative impact on thefor the majority of our clients who are working

environment, as well as help our clients adapt

in agriculture. Extreme weather events suchto the climate crisis. In FY2024/03, we have

Environment | 47

continued progressing in these focus areas,

this tool. For FY2024/03’s calculation, we

moving towards an environmentally responsible

have included emissions from MAXIMA and

Gojo Group.

Humo’s head offices. Additionally, Ananya has
expanded their scope of calculation from head

Quantifying our environmental impact

office emissions to also account for branch-level

In FY2024/03, we continued to monitor ourbusiness travel. This expanded scope provides

GHG emissions, collecting both Gojo and groupus with better visibility into our environmental

company data. In August 2023, we conducted an

impact throughout the operation. We will continue

online Gojo Group SPM Conference where wecollecting emissions data from group companies

covered various topics, including how to use theand cover major areas of operations to improve

Gojo GHG calculation tool. Following this training,

visibility and establish our emissions targets.

MAXIMA and Humo have started implementing

FY2024/03 GHG emissions (kg CO2eq)
Scope 1

Scope 2

Scope 30

4,821

84,808MAXIMA (head office)

961

5,346

37

Ananya (head office andbranches)

209

4,200

43,641

Humo (head office)

675

778

127

Gojo

The GHG Protocol16 defines Scope 1 emissions

emissions from client activities in our calculation

as direct emissions from owned sources. As

at this point, as the sheer number and variety ofsuch, we include emissions from travel byclient activities make it difficult to standardise

company-owned vehicles in our calculation.

and measure emissions accurately. Instead, we

Scope 2 emissions are indirect emissions from theencourage our group companies to assess andconsumption of purchased energy, so emissions

monitor environmental risks by incorporatingfrom electricity usage are accounted for. Scopeenvironmental and social screenings in the loan

3 emissions encompass business travel using

assessment process.

non-company vehicles, employee commuting, andoffice consumables like paper. We do not include

16 Greenhouse Gas Protocol (GHG Protocol) was jointly convened in 1998 by World Business Council for Sustainable Development (WBCSD)
and World Resources Institute (WRI). It was created as an international standard for corporate accounting and reporting emissions.

48 | Gojo Impact ReportFarmers in rural Uttar Pradesh in harvest season /Taejun Shin

In November 2023, we provided training toperformance, both at the institutional and portfolio

Gojo members on the Environmental Policy

level, aligns with the SDGs. The AFISAR rating

and Roadmap. We encouraged company-widecommittee highly evaluated SATYA’s Social andcollaboration in tracking our GHG emissions via

Environmental Policy for being comprehensive. It

our expense reimbursement system. We also

effectively engages all stakeholders in achieving

discussed green work practices for both officeenvironmental sustainability through measures likeand remote work, such as turning off electronic

including risk assessments in the loan assessment

equipment and energy sources when not being

process and providing environmental awarenessused and changing light bulbs to LEDs to reduce

training for all employees. SATYA also extends

energy consumption. Our members also inspired

climate risk mitigation by adopting businesseach other by introducing non-work-related green

continuity and disaster preparedness plans in theactions that they’ve taken, such as eating lessevent of extreme weather events. The committee

meat and mending damaged clothes.

recommended that SATYA set specific targets
for reducing the impact of SATYA’s operations

Environmental initiatives at Gojo Groupon the environment. In response, Gojo plans to

In FY2024/03, Gojo Group continued to makecollaborate with SATYA to establish these targets.

strides in protecting the environment by engaging
with different stakeholders in the value chain.

Our group companies also offer products withenvironmental objectives in their portfolio.

In September 2023, SATYA received an A rating

MAXIMA collaborates with Water.org, a global

from Agents for Impact using their AFISAR

non-profit aiming to empower people with access(Agents for Impact Sustainability Rating) tool. Thisto safe water and sanitation through affordable

tool evaluates how well a company’s sustainability

financing, to provide WASH loans to their clients.

Environment | 49

These loans help clients build latrines, pumping

economic stability for both our clients and Gojo

wells, water storages, and other water or sanitation

Group. Recognizing the gravity of this issue, Gojo

materials to improve their living conditions andaims to address this issue by supporting ourprovide access to efficient water usage, whichclients to build financial resilience.

reduces water wastage. These facilities can also
help manage waste better, reducing environmental

In collaboration with an independent consultant,pollution. As of December 2023, MAXIMA has

we initiated a project to explore effective

disbursed over 400 WASH loans. SATYA alsointerventions for helping our clients with climate

offers a wide range of environmental products,

adaptation. Currently, we are in the first phaseincluding loans for e-rickshaws that enable accessof the project, where we are analysing Gojo

to clean energy, loans for clients to purchaseGroup’s portfolio characteristics, client needs, andenergy-efficient home appliances such as LED

organisational strengths to pinpoint a critical focus

bulbs and induction cooktops, as well as WASH

area. Given that our clients live in various regions

loans. In Tajikistan, Humo partnered with GEFF

with diverse environmental issues, we have

(Green Economy Financing Facility) to further

conducted climate risk assessments at both the

expand Humo’s product offerings with green

country and company levels with Sejaya, SATYA

finance products, and to support their efforts

and Humo. These assessments involve examining

in developing climate change mitigation andpast climate events and trends in each country,

adaptation technologies. GEFF provided a USD 3

ranking the top climate risks for each company,

million loan, the third loan following the pilot loan

and identifying the vulnerabilities of eachsigned in 2019 and the second facility in 2022.

company branch to these identified risks. Moving
forward, we will enter the second phase of the

From mitigation to adaptation

project, where we aim to determine the specificClimate hazards pose a threat to our clients and,interventions that can help our clients adapt toby extension, to Gojo’s vision in the mid-to-long

upcoming climate hazards based on our findings

term. These environmental challenges can disrupt

from the first phase.

livelihoods, increase financial risks, and undermine

50 | Gojo Impact ReportShareholders’ event in June 2023

Environment | 51

Closing Remarks From the Chair of
the Impact Committee

Ignacio Mas-Ribo, Gojo’s outside director,

The quest for social impact is a long journey, andsucceeded Impact Committee chair Stuart

I would place empathy as the key fuel. Impact

Rutherford who retired in June 2023. Ignacio

is unlikely to be achieved, much less sustained,

is an expert in financial inclusion and digital

if we see it as a set of numerical dials that canfinance, having co-founded the Digital Frontiers

be expertly turned. We must retain the humility

Institute, a not-for-profit that develops professional

to challenge our assumptions and routinely go

development training courses around digitalback to check how clients view things and whatmoney and payments, and served as its executive

inspires and concerns them. We are on the pathdirector from 2015 to 2020. Previously, Ignacio

to impact when we begin to understand, without

held positions in the Bill and Melinda Gates

judgement, how people who live in very different

Foundation and CGAP.

circumstances to ours make their decisions andcope. If we judge the choices people make, we

Gojo strives to create social impact throughprobably haven’t fully understood the reasons forfinancial inclusion, reaching 2.4 million clients astheir decisions, and that will take us down the pathof March 2024. What is special about Gojo is thatof paternalistic interventions. To me, this impact

the quest for social impact is a daily task. Therereport is first and foremost a good demonstrationis the doing part: coordinating across our groupof the pursuit of a truly empathetic understanding

companies to implement common policies to offer

of our clients.

our clients expanded choices, more opportunities
for expressing their voices, and a greater sense

I get to write these closing remarks asof protection. There is the measurement part:chairperson of the Impact Committee of theassessing realities on the ground, conducting

Gojo board of directors, which I had the honour

surveys and establishing benchmarks. And thenof taking over from Stuart Rutherford upon

there is the thinking part: connecting all this backhis retirement. As such, I wish to express myto our clients’ sense of empowerment and theappreciation first of all to the Gojo SPM / Impact

sustainability of the communities they live in.

team, led ably and inspiringly by Cheriel Neo, for

These three levers — good governance practices,

condensing Gojo’s activities and learnings soproper analytics, and thought leadership — arelucidly in this information-packed report. I wish towell demonstrated in this Impact Report.

thank our group companies for engaging with the
Gojo team and with each other in their persistent52 | Gojo Impact Reportpursuit to improve their social impact practices,

goals at the heart of the budgeting and financial

for they are the behind-the-scenes heroes ofcontrol process. The budgeting process is what

this report. And lastly I wish to acknowledge

gives plausibility and coherence to the planned

Stuart’s quiet but immense contribution in keeping

actions of our group companies, so the budgets

everyone in the Gojo family not only committed to

we agree with our group companies need to be

but also focused on issues of social impact.

designed to achieve specific financial and nonfinancial outcomes. On the research side, we need

Ultimately, social impact is achieved by balancing

to continue to find ways to assess realities on themultiple corporate objectives and decision time

ground, through both quantitative methods thathorizons. As an investor in MFIs, Gojo can only

create comparable data and qualitative methods

achieve impact indirectly, through our groupthat create the stories that make us understandcompanies. Indirect impact is frustratingly fraught

and connect empathically.

with problems of agency, measurement andattribution: what really is our unique contribution?

I hope this report inspires you in some personal

But it has the advantage of leverage: being able toway. It can serve as a reminder of why we do what

stretch over more people in more countries. Gojo

we do at Gojo and at so many other mission-

believes that the best way to manage this dynamic

driven microfinance organisations around theis to establish close, long-term relationships withworld. It reinforces the idea that financial andthe group companies. On the investment side,

non-financial goals are eminently reconcilable, forthis means taking majority positions and notthey both involve engaging clients, meeting theirturning around the portfolio even when there arepressing needs, and looking after their longer-term

lucrative exit opportunities. On the governanceinterests. And it ought to make us want to workside, our aspiration is to put our social impact

better together for a better and more just future.

Closing Remarks From the Chair of the Impact Committee | 53

Abbreviations

SPI = social performance indicator

AFISAR = Agents for Impact Sustainability Rating

SPM = social performance management

E&S = Environmental and Social

TJS = Tajikistani Somoni

GEFF = Green Economy Financing Facility

M&A = Merger & Acquisition

GHG = greenhouse gas

MMK = Myanmar Kyat

GLP = Gross Loan Portfolio

MSMEs = Micro Small & Medium Enterprises

GNI = Gross National Income

PAR = Portfolio At Risk

GRI = Global Reporting Initiative

USSEPM = Universal Standards for Social and

IPO = initial public offering

Environmental Performance Management

MFIs = microfinance institutions

WASH = water, sanitation and hygiene

SMEs = Small and Medium Enterprises

Data points presented in this report

Reporting Initiative) disclosure numbers, following

The data mapping process for this Impact Report

the microfinance industry standard by researching

involved creating a list of all impact indicators for

how other MFIs conducted their own data

each stakeholder and their corresponding location

mapping. A few of the indicators Gojo uses couldin the report. We then mapped the indicators

not be matched to any GRI disclosure numbers.

to their relevant SDGs goals and GRI (Global

Stakeholder

Indicators

Page

SDGs Target

GRI Standard

Clients

Number of lending clients8

1 / 8 / 10

203-2

Clients

Female clients as percentage of total lending
clients

8

1 / 5 / 10

203-2

Clients

Rural clients as percentage of total lending
clients

8

1 / 10203-2

Clients

Number of savings clients8

1 / 8 / 10

203-2

Clients

Voluntary savings clients as percentage of
total savings clients8

1 / 8 / 10

203-2

Clients

Clients accessing finance for the first time

8

1

203-2

Clients

Gross loan portfolio

9

1 / 8 / 10

201-1

Clients

Exit survey results

24

1 / 10Clients

Client satisfaction survey results

25

1 / 10Clients

SPI audit results

34

1 / 10People(Employees)

Number of Gojo Group employees

43

16

401-1

Stakeholder

Indicators

Page

SDGs Target

GRI Standard

People(Employees)

Number of female and male members at
Gojo

43

5

405-1

People(Employees)

Nationalities of Gojo members

43

16

405-1

People(Employees)

Female employees as percentage of total
Gojo Group employees

44

5

405-1

People(Employees)

Employee satisfaction survey results

44

16

People(Employees)

Programs for employee upskilling

45

16

404-2

Environment

Direct (Scope 1) GHG emissions

48

13

305-1

Environment

Energy indirect (Scope 2) GHG emissions

48

13

305-2

Environment

Other indirect (Scope 3) GHG emissions

48

13

305-3

Contributors
Gojo Group: Arisa Oba / Arya Murali / Cheriel Neo / Dayan Edirisinghe / Gürol Michael Sari /Haruna Tanaka / Himanshu Kumar / Ignacio Mas-Ribo / Jessy Daccache / Jitendra Pal / Kusum KC /Mi Liu / Marco Giancotti / Mayu Ochiai / Mercyline Manoj / Monika Chopra / Rania Manayra /Ryo Satake / Saidkomron Najmiddinov / Shraddha Kumari / Sim Soupheakna / Soe Wai Aung /Sohil Shah / Taejun Shin / Takao Takahashi / Tomohiro Isozaki / Yoshinari Noguchi
Investor: Takuya Oyama
Design: Haruka Yamada
Contact:
Haruna Tanaka
info@gojo.co
Please reach out if you have feedback on this report or would like tocollaborate with us on impact measurement or SPM.
Gojo & Company, Inc. is headquartered in Japan, at
3-14-5 Sendagaya, Shibuya, Tokyo 151-0051
https://gojo.co/© Images: Gojo & Company Inc© Gojo & Company, Inc, 2024. All rights reserved.