Private Sector Investment Finance

Ex-Ante Evaluation Report
Private Sector Investment Finance Division
Private Sector Partnership and Finance Department
Japan International Cooperation Agency (JICA)
1.

Name of the ProjectCountry: Developing countries
Project: Financial Access Improvement Microfinance Project (hereinafter, the “Project”)
Signing Date: August 22, 2019
Investee: Gojo and Company, Inc. (hereinafter, “Gojo”)
2.

Background and Necessity of the Project(1) Current State and Issues of the Microfinance Sector
There are about 1.7 billion adults in the world who do not have accounts with financial
institutions (Global Findex 2017). Of these adults, roughly 1 billion are women, and the gender
gap is wider in developing countries. Improving access to finance is a major challenge fordeveloping countries. The Sustainable Development Goals (SDGs) also aim to “ensure accessto financial services, including microfinance” (Goal 1) and “improve access to financial services”(Goal 8). The objective of the Project is to improve access to finance in developing countries
by supporting microfinance institutions (hereinafter, “MFIs”) in those areas with their businessexpansion. With women accounting for 95% of MFI customers to which Gojo provides financial
support, the Project is expected to contribute to increasing women’s economic empowerment.
In India, Cambodia, Sri Lanka and Myanmar, the countries where Gojo is operating at present,
the governments are aiming to strengthen the financial sector and promote financial inclusion,
by developing microfinance-related policies and regulations. These countries have a large
market potential and there is a significant demand for microfinance.
(2) Japan and JICA’s Cooperation Policy for the Microfinance Sector
At the G20 summit in December 2010, the G20 member countries, including Japan, launched
the Global Partnership for Financial Institution (GPFI), which recognized “the criticalimportance of extending access to financial services to individuals and SMEs in the developingworld”. A communique issued at the G20 Finance Ministers and Central Bank Governors
Meeting in March 2017 announced a further commitment to supporting the work of the GPFI.
In June 2018, development finance institutions from the G7 countries, including JICA, adopted
the initiative “2X Challenge: Financing for Women,” which aims to mobilize US$3 billion by2020 for investment in women’s economic empowerment initiatives.
JICA’s Position Paper on SDGs Goal 1 (Ensuring access to financial services, includingmicrofinance) released in 2017 says that JICA will focus on promotion of the mainstreaming

of cooperation to eradicate poverty, strengthening of the perspective of financial inclusion andpromotion of collaboration with the private sector and various other stakeholders. The Projectis consistent with Japan and JICA’s policies, and is also expected to contribute to the 2X
Challenge.
3.

Project Description(1) Project Objective
The objective of the Project is to improve access to finance for the low-income classes indeveloping regions by supporting MFIs with their business expansion, thereby contributing
to raising their standard of living.
(2) Project Site
Developing areas (four countries, namely India, Cambodia, Sri Lanka and Myanmar,presently covered by the Project; other developing countries will be included in the future)(3) Project Description
Support MFIs in developing countries with their business expansion through investment inGojo.
(4) Schedule
Established in July 2014, Gojo currently operates in four countries.
(5) Project Implementation Structure1) Investee: Gojo and Company, Inc.
2) Project implementation schedule: Same as above3) Operating and Maintaining Organization: Same as above(6) Environmental and Social Consideration / Poverty Reduction / Social Development
1) Environmental and Social Consideration① Category: C② Reason for Categorization: The Project does not correspond with any sensitive
sectors, characteristics, and areas listed in the Japan International Cooperation
Agency Guidelines for Environmental and Social Considerations (published in April
2010; hereinafter, “JICA Guidelines for Environmental and Social Considerations”),and the adverse impact of the Project on the environment is considered minimal.
Accordingly, it is categorized as C.
③ Promotion of Poverty Reduction: Expansion of financial services for the poor by MFIs
and others to which Gojo provides financial support is likely to promote poverty
reduction.
2) Cross-cutting Issues: None
3) Gender Category: [Gender project] ■GI (P) (Project mainly benefiting women)<Description of activities and reason for classification>:
Gojo provides financing with MFIs whose customer is 95% women. The Project is
expected to contribute to increasing women’s economic empowerment.

4.

Targeted Outcomes(1) Quantitative Effects
Operation and Effect Indicators
・ Number of borrowers
・ Proportion of women in borrowers
・ Gross loan amount(2) Qualitative Effects
To improve standard of living by increasing access to financial services
5.

Evaluation Results

The project is consistent with the development issues and policy, and assistance policies ofJapan and JICA and will surely contribute toward SDGs Goal 1 (ensure access to financial
services, including microfinance) and Goal 8 (improve access to financial services).
Accordingly, there is a substantial need for JICA to support the Project.