Development 

Impact Performance 

Assessment for Financial 

Intermediary Projects

SUMMARY REPORT

APRIL 2022
Contents

EXECUTIVE SUMMARY

01. INTRODUCTION

Scope and methodology

Evaluated portfolio summary

Development outcomes

02. MAIN FINDINGS

Overall performance assessment

Loan structures that outperformed

Loan structures that underperformed

03. RECOMMENDATIONS

At origination

Loan approval and underwriting

Impact monitoring and results reporting

APPENDIXES

Appendix 1: Methodology

Appendix 2: Table of recommendations for DFC mapped to relevant FIs

ENDNOTES

03

05

09

17

21

26
Executive Summary 3

Executive Summary

AN INDEPENDENT PERFORMANCE ASSESSMENT REVEALED STRONG DEVELOPMENT 

OUTCOMES WITH AREAS FOR IMPROVEMENT

• DFC commissioned Dalberg to undertake an independent performance assessment of the

development results, compliance, and financial sustainability of its $2.3 billion Latin American

financial intermediary loan portfolio.

» Loan structures that outperformed had narrower target customer focus, offered longer tenors or lower

rates that were passed to end-beneficiaries, were able to demonstrate performance against multiple

development objectives, or leveraged on the ground partnerships to provide technical assistance to

development objective aligned borrowers.

• Yet some areas for improvement remain to ensure impact is more consistently achieved as more

than 30 percent of the financial intermediaries are underperforming or could not be assessed because

they did not provide the necessary information and evidence to demonstrate compliance with DFCs

stated development results objectives.

» Loan structures that underperformed were made through origination facilitators, did not intentionally

take actions to serve target customers, lacked clear additionality at origination or did not provide data.

• Overall DFC has achieved its development objectives: Nearly 70 percent are achieving their

intended development outcomes supporting ~110K microenterprises, SMEs and low and low-middleincome housing borrowers to gain access to finance of which 66 percent were 2X aligned

Overall

Development 

Outcomes1

Compliance

Financial 

Sustainability

OVERALL PERFORMANCE OF DFC LOANS TO FIS IN LATIN AMERICA IS SATISFACTORY, 

YET SOME AREAS FOR IMPROVEMENT REMAIN

21%(6)

21%(6)

14%(4)

10%(3)

10%(3)

10%(3)2

10%(3)

21%(6)

38%(11)

38%(11)

72%(21)

52%(15)

31%(9)

31%(9)

3%(1)

17%(5)

Outperforming Satisfactory Underperforming Indeterminate
Executive Summary 4

Approve and underwrite loans with strengthened IMM requirements:

Screen and identify loans considering impact-first:

Assess intentionality of the FI management to grow target customer segment 

through differentiated product offering particularly for 2X loans

Incorporate climate and sustainability into the assessment and value the FIs that 

are takings steps to improve the impact of their operations and that of their portfolios.

Increase additionality by targeting FIs that serve client segments that are not being 

served by commercial banks, and ensuring that favorable loan terms are passed 

onto FI customers 

Use origination facilitators more strategically and selectively 

Strengthen development related loan covenants to penalize borrowers for lack of 

cooperation or insufficient reporting of development impact data

Enforce the target loan sizes provided by FIs to ensure that the impact of the 

loans is achieved

Combine loans with technical assistance on IMM data collection and reporting 

good practices 

Monitor and report results with client voices:

Support FIs to increase their ability to report impact on targeted populations 

through more realistic definitions of target customers (such as 2X or SME) 

given country context

Consider adding a “underperforming” category when performing ex-post 

evaluations using IQ

Use third party service providers or work with FIs to systematically collect end 

borrower perspectives on client satisfaction

ORIGINATION PROCESSING EXIT AND REPORTING

MOVING FORWARD DFC SHOULD IMPROVE DEVELOPMENT OUTCOMES BY INTEGRATING 

IMPACT MEASUREMENT AND MANAGEMENT (IMM) ACROSS LOAN LIFECYCLE
Introduction

CHAPTER 1
Core 

Assessment 

Criteria

Indicators 

used to

do the

Assessment

Dimension

Potential

Score

DFC COMMISSIONED DALBERG TO UNDERTAKE AN INDEPENDENT PERFORMANCE 

ASSESSMENT OF ITS LOANS TO FINANCIAL INTERMEDIARIES (FIS) IN LATIN AMERICA

Scope and Methodology

Scope and Methodology 6

SCOPE

ASSESSMENT METHODOLOGY

Review 36 loans, totaling US$2.3 billion, made to a broad and diverse range 

of 29 financial intermediaries (FIs) across nine countries and six distinct DFC 

development objectives: low-middle income housing, microenterprise, SME, 2X/

gender, agriculture SME and WASH. The objective was to provide a comprehensive 

view of performance against development objectives and to identify lessons 

learned for future DFC lending activities.

Have the development 

objectives been achieved, 

or will they likely to be 

achieved? 

• DFC’s Development

Impact Quotient

(IQ) three pillars of

Development Results:

Economic Growth,

Inclusion, and

Innovation2

Compliance

Is the FI compliant with 

DFC’s “use of proceeds” 

loan requirements? 

• Ratio of loan to

DFC outstanding

balance

• Compliance with

E&S covenants

• Reach to intended

Sustainability

• Non-performing loan

(NPL) ratio

• Year-over-year (YoY)

portfolio growth

• Management intention

of growing the relevant

portfolio in the future

What is the likelihood 

that the positive impacts 

will be sustained after 

the DFC loan matures?

Development Outcomes

Outperforming

Financial institutions 

are in compliance 

with DFC loan 

requirements, and 

demonstrated 

that they have 

exceeded the original 

development targets, 

and demonstrated 

the likelihood 

for sustained 

development impact.

Satisfactory

Financial institutions 

are in compliance 

with DFC loan 

requirements and 

demonstrated 

that they were 

meeting DFC’s 

developmental targets 

and demonstrated 

the likelihood 

for sustained 

development impact.

Underperforming

Financial institutions 

are not in compliance 

with DFC loan 

requirements and/

or are not meeting 

developmental targets 

and are unlikely 

to sustain existing 

positive impacts.

Indeterminate

The financial 

institution did not 

provide the data 

necessary to assess 

performance. 
DFC’s investments analyzed broken down by country3 (USD million)

DFC’s investments analyzed broken down by theme4 (USD billion)

Less activity More activity

15 9 7 6 4

SME5 Housing 2X/Gender MSME5 Other Includes WASH and 

Agriculture loans

WE REVIEWED LOANS TO 29 FIS IN NINE LATIN AMERICAN COUNTRIES, ACROSS FIVE 

IMPACT THEMES CORRESPONDING TO USD 2.3 BILLION IN DFC FINANCING 

Mexico $92M (4%) 

9 FIs (9 Loans)

Guatemala $400M (18%) 1 FI

Nicaragua $18M (1%) 2 FIs

El Salvador $161M (7%)

4 FIs (5 Loans)

Costa Rica $375M (16%) 5 FIs 

Panama $141M (6%) 2 FIs

Ecuador $342M (15%) 2 FIs 

Colombia $523M (23%) 3 Fls

Paraguay $232M (10%) 2 FIs

Evaluated Portfolio Summary 

Evaluated Portfolio Summary 7

# of FIs

Share (%)

37%

25%

9%

1%

28% $1.3B

$1.0B

$0.9B

$0.3B

$0.04B
Portfolio value and total number of clients served6,7

14,017 SMEs 

Reached8

32,606 Individuals 

Reached8

73,140 2X Aligned 

Borrowers Reached8

63,947 Individuals 

Reached8

%Δ Disbursement – 2021:

Disbursement 2021 Disbursement 2021 Disbursement 2021 Disbursement 2021

Clients served: + 11% +35% +23% -7%

Portfolio value: + 12% +9% +24% +45%

SME

Low-Middle 

Income Housing 2X Aligned Microenterprise

50,000

100,000

150,000

200,000

250,000

300,000

#

THROUGH THESE LOANS DFC HAS INCREASED ACCESS TO FINANCE FOR ~110K6

SMES, LOW-MIDDLE INCOME HOUSING PROJECTS AND MSMES. 2X ALIGNED LOANS 

REPRESENTED 66% OF ALL CLIENTS REACHED

Development Outcomes

Development Outcomes 8

6.75B

7.57B

4.96B

5.39B

1.26B

1.56B

2.66B

3.85B

Clients served (#)

Portfolio Value (USD)

Collectively, the loans evaluated have contributed to a net increase of 19 percent in total debt 

financing available and reached more than 110 thousand customers. More specifically, thanks to 

the DFC loans, the portfolios of financial intermediaries serving 2X (gender) classified borrowers 

reached more than 73 thousand 2X-aligned borrowers and supported FI growth to reach more than 

14 thousand SMEs (including 403 agricultural SMEs), approximately 64 thousand microenterprises, 

more than 32 thousand mortgages to low or low-middle-income homebuyers, and 17 water service 

providers. While these numbers relate to clients directly supported by DFC financing, fungibility of 

funds prevents specific attribution.
Main Findings

CHAPTER 2
Overall Performance Assessment 

OVERALL PERFORMANCE OF DFC LOANS TO FIS IN LATIN AMERICA IS SATISFACTORY, 

YET SOME AREAS FOR IMPROVEMENT REMAIN

Overall Performance Assessment 10

Performance assessment summary with breakdown by development objective of loans:

Overall 29

Loans (#)

SME 15

Housing 9

2X

 Gender 7

31 38 10 21

20 53 13 13

22 55 11 11

71 14 14

Outperforming Satisfactory Underperforming Indeterminate

MSME 6

Other 4

67 33

50 50

Nearly 70 percent are achieving their 

intended development outcomes, 

increasing access to finance for 

microenterprises, SMEs, low-income 

housing, and 2X aligned businesses across 

Latin America.

Ten percent of the financial intermediaries 

are underperforming and another 21 

percent of the FIs could not be assessed

because they did not provide the necessary 

information and evidence to demonstrate 

compliance with DFCs stated development 

results objectives. 
139

136

126

125

121

121

121

120 

116

104 

103 

97

93

92

89

83

82

80

33

71

31

0

49

19

11`

-3

68

25

FI 1

FI 2

FI 3

FI 4

FI 5

FI 6

FI 7

FI 8

FI 9

FI 10

FI 11

FI 12

FI 13

FI 14

FI 15

FI 16

 FI 17

FI 18

FI 19

FI 20

FI 21

FI 22

FI 23

FI 24 

FI 25

FI 26

FI 27

FI 28

FI 29

0

Development Impact Quotient (IQ) score summary by financial intermediary evaluated9:

USING THE IQ TO ASSESS DEVELOPMENT OUTCOMES WE FOUND A WIDE DISTRIBUTION 

BUT 83% OF FIS WERE RATED AS HIGHLY DEVELOPMENTAL OR DEVELOPMENTAL

Overall Performance Assessment 11

High Developmental Developmental Indeterminate
• Outperforming loans tended to be larger but sharply focused on inclusion through narrower,

country-specific definitions of underserved customers. For example, FI 1 management hope to serve

more than 2 million unbanked women-led microenterprises in Country A.

• The financial intermediary passed down DFC’s longer tenors and lower interest rates to their

borrowers. FI 2 in Country B increased the tenor of its loans to SMEs from 60 to 96 months during

the pandemic thanks to the longer tenor of their DFC loan.

• Some loans scored higher on the IQ because they demonstrated performance against multiple

development objectives. FI 5 in Country C outperformed thanks to a large DFC loan that served and

grew its portfolio for 2X-aligned borrowers, microenterprises and low-middle-income housing

borrowers.

• FIs such as FI 8 in Country B leveraged on-the-ground partnerships to provide technical assistance to

development objective–aligned borrowers.

• Other FIs benefited from DFC’s flexibility to maintain position and even grow during the COVID crisis.

FI 27 in Country D drew on this flexibility to restructure its loan and weather the crisis.

Average IQ score broken down by DFC’s loan size, length of tenor and number of development 

objectives10:

≤ USD 50 

million

>USD 50

million

< 8 years Single Development 

Objective

Multiple Development 

Objectives

≥ 8 years

20

0

40

60

80

100

120

LOAN STRUCTURES THAT OUTPERFORMED HAD NARROWER TARGET CUSTOMER FOCUS, 

OFFERED INNOVATIVE PRODUCTS/SERVICES AND BENEFITED FROM DFC FLEXIBILITY

Loan Structures that Outperformed 

ALL ELSE EQUAL LARGER, LONGER TENOR LOANS WITH MULTIPLE DEVELOPMENT 

OBJECTIVES HAD HIGHER IQ SCORES

Loan Size Tenor Number of Development 

Objectives

Avg. 

IQ score

Loan Structures that Outperformed 12

66

109

70

91

73

94
Loan Structures that Outperformed 13

FI 1 IS EXAMPLE OF A HIGHLY DEVELOPMENTAL LOAN DUE TO STRONG MGMT. 

INTENTIONALITY, DIFFERENTIATED PRODUCTS AND TECHNICAL ASSISTANCE

women-owned/led MSMEs served and reach client segments that usually don’t have 

access to financial tools. Currently it has 78.4K loans to women-led MSME’s with an 

outstanding loan value of $600M. The management goal is to give access to banking 

services to 2M of unbanked women clients, thus it is still has a long way to go to achieve 

that important goal. 

The 2X aligned loan to FI 1 outperformed for the following reasons:

Three years ago, FI 1 developed a specialized product to serve women-owned/led 

MSMEs. These products do not require a spouse to co-sign a loan for women or require 

collateral and offer longer terms, up to 36 months. 

women microfinance borrowers have access to a microenterprise platform, personal

finances, financial security, effective investments, banking products, and financial 

literacy training. FI 1 has served 35,935 clients through this training, and 85% were 

women. Recently, FI 1 won an industry prize due to the breadth and depth of its nonfinancial services and the volume of loans granted to women and businesses led by 

women.

Management focused on intentionally growing loans to women-led MSMEs:

« FI 1is intentionally looking for strategies to keep growing the number of 

Passed along better terms to offer differentiated financial services for targeted

borrowers:

« FI 1 has differentiated products to support women-owned/led enterprises. 

Benefited from non-financial technical assistance programs:

« FI 1 offers non-financial services to its MSME women-owned/led clients. The 
• Five of the eleven loans made through origination facilitators did not share data during the

assessment and consequently were scored as indeterminate. The origination facilitator did not

adequately engage or monitor the financial intermediaries it originated, such as FI 28 in Country D,

where underperformance during the COVID pandemic was not detected or reported in a timely

manner to DFC. Many transactions issued by the origination facilitator were guarantees, which may

have been a factor behind the FIs taking the data requests less seriously.

• DFC loans were relatively small in these FIs’ overall lending portfolio. Because FIs like FI 24 in

Country E receive a $10 million loan guarantee that was small fraction of its loan portfolio.

• Where FIs lacked clarity on the development objectives or DFC’s impact reporting requirements,

these went unfulfilled. FI 23 in Country E, for example, was unaware of the goal of reaching lowmiddle income clients, and it refused to report data during our evaluation.

• Some FIs did not take specific actions to intentionally serve customer segments, a stated purpose of

the loan. FI 19 in Country F for example, decreased the value and volume of loans to 2X-aligned

borrowers during the loan period and thus did not meet the development objective of increasing

access to new women borrowers.

Average IQ score broken down by facilitated by originator, level of additionality and time 

to share data10:

Origination facilitator Additionality Data sharing

Used Origination 

Facilitator

Direct <80% of project 

cost & no other DFI 

lender

>80% of project cost

&/or additional DFI 

lender present

<2 months to 

share data

>2 months or never 

shared data

0

20

40

60

80

100 95

49

97

71

92

63

LOAN STRUCTURES THAT UNDERPERFORMED WERE MADE THROUGH 

ORIGINATION FACILITATORS, DID NOT INTENTIONALLY SERVE TARGET 

CUSTOMERS, LACKED CLEAR ADDITIONALITY AND DATA

Loan Structures that Underperformed 

ALL ELSE EQUAL FACILITATED ORIGINATIONS, LOWER ADDITIONALITY AND SLOWER 

DATA SHARING HAD LOWER IQ SCORES

Avg. 

IQ score

Loan Structures that Underperformed 14
2018

100 %

31 %

22 % 

37 %

2019

91 %

29 % 

10 % 

31 %

94 %

2020

29 %

10 %

32 %

95 %

2021 32 %

55 %

37 %

Percentage share of women clients by type of financial institution (2018–2021)

• FIs have not increased the share of women in their portfolios over time

On average, between 2018 and 2021, the supported FIs experienced no growth

• The lack of improvement in the share of women served is partially explained by the fact

that most FIs are not intentional in attracting, serving, and meeting women clients’

needs

• The 2X classification did not generate incentives to move the needle in increasing

women’s economic empowerment”

• 2X is still not widely (1) understood by FIs, or (2) applied by DFC

2X FIs still have trouble applying the 2X criteria, and as such are predominantly utilizing

criteria 1

There is an opportunity to clarify the definition of 2X borrowers (i.e., definition also includes

enterprises that serve women’s needs)

MOST FIS HAVE NOT INTENTIONALLY TARGETED WOMEN BORROWERS

Loan Structures that Underperformed 15

MFI BANK NBFI Total
Loan Structures that Underperformed 16

FI 24 IS EXAMPLE OF A INDETERMINATE LOAN DUE TO LACK OF RESPONSIVENESS, 

LACK OF GROWTH AND LOW ADDITIONALITY COMPARED TO OUTSIDE SOURCES OF 

The SME loan guarantee to FI 24 underperformed for the following reasons:

more well-established SME borrowers that already had access to finance in Country E. 

According to data collected through the FAR average assets of its borrowers were >$2M. 

In addition, only a small percentage (8%) has gone to women-led or women-owned 

businesses compared to the 17% projected at origination.

had a total credit portfolio of USD 222 M. Given that the DFC $10M loan guarantee was a

relatively small proportion of overall lending and thus the additionality of the DFC-backed

loan, in this case, was relatively low.

Originated through a loan facilitator:

« This loan guarantee was originated through a loan facilitator and was unresponsive to 

multiple interview and data requests over the four months of the performance 

assessment. 

Did not intentionally target and grow loan portfolio to target customer segment:

« FI 24 did not grow its lending portfolio to SMEs and tended to provide loans to larger 

Was not additional to given small size and access to outside sources of funding: 

« FI 24 was a well-established institution in Country E at origination. FI 24 in 2015 
Recommendations

CHAPTER 3
18

ORIGINATION

FOR MORE CONSISTENT SUCCESS IN ACHIEVING THE DESIRED DEVELOPMENT 

OUTCOMES FROM THEIR LOANS TO FINANCIAL INTERMEDIARIES, THE DFC 

TEAMS COULD CONSIDER INTEGRATING IMPROVED IMPACT MEASUREMENT AND 

MANAGEMENT (IMM) PRACTICES ACROSS LOAN LIFECYCLES.

Recommendations

 Use the following techniques for an impact-first mindset when 

screening and identifying loans:

ORIGINATION

Assess the intentionality of the FI management to grow the target 

customer segment through differentiated product offerings. Many 

financial intermediaries evaluated reach a high number of women 

and women-owned or -led businesses but are not increasing the 

share of women served. Few intermediaries proactively design 

products and services to better serve this segment.

Incorporate climate and sustainability into the assessment 

and value FIs taking steps to improve their operations’ and 

portfolios’ impacts. Some FIs implement practices to improve 

their environmental performance, and this could be given more 

consideration during screening.

Increase developmental additionality by:

• Targeting segments not served by commercial banks; e.g., FI 4

provides loans of <$1M to Agri-SMEs, and FI 10 and 15 provide lowincome housing guarantees to customers without access to

housing loans.

• Ensuring that DFC’s offerings, such as longer tenors, are passed on

to end borrowers. Many FIs made good use of longer DFC loans to

extend the tenor of their own loans to end borrowers.

• Making loan sizes relevant to the total size of the FI’s portfolio.

Small financial institutions showed more evident signs of financial

additionality from DFC loans, including attracting other foreign

investors and improving liquidity.

Use origination facilitators strategically and selectively to 

effectively identify and engage financial intermediaries that can 

reach targeted populations. Origination facilitators should be able 

to demonstrate (and be evaluated on) the ability to communicate 

development objectives to financial intermediaries, collect the 

impact data used to measure development performance, and ensure 

compliance with development policy data reporting requirements. 
Recommendations 19 ORIGINATION

These techniques can help strengthen IMM requirements and 

increase the focus on inclusion and innovation.

LOAN APPROVAL AND UNDERWRITING

Strengthen development-related loan covenants to penalize borrowers 

for lack of cooperation or insufficient reporting of development impact 

data or to reward those that adequately report impact data. The current 

loan agreement template does not consider legally binding clauses on 

sharing information on development objective performance and compliance or create incentives for FIs to share development objective performance and compliance information with DFC

Monitor and enforce the target loan sizes provided by FIs to ensure 

they achieve the intended loan impact. Several FIs average loan sizes were 

much higher than projected at origination, indicating they had favored 

larger, more established businesses, thus reducing their portfolios’ inclusiveness.

Combine loans with technical assistance on IMM data collection and reporting good practices to address knowledge identified during the assessment gaps in FIs’ skills and expertise.
Recommendations 20 ORIGINATION

DFC teams can use these techniques to enhance clients’ voices. 

IMPACT MONITORING AND RESULTS REPORTING

Support FIs to increase their ability to report impact on targeted 

populations by defining target customers (such as 2X or SME) 

according to the specific country context. For example, several 

FIs reported that IFC MSME definition thresholds included firms 

considered large by national indicators. Reconcile DFC-specific 

definitions to adapt information to the FIs’ situations and needs.

To address DFC and FI capacity constraints in directly monitoring 

loan impact, collect FI-generated customer satisfaction data 

and selectively use third-party data collection services to gain 

enhanced perspectives from end borrowers on the impact of the 

financing on their livelihoods.

Add an Underperforming category to ex-post evaluations using IQ 

for loans not demonstrating growth in the target customer segment 

aligned with development objectives or failing to meet all development 

objectives despite a high IQ score due to the quality of the loan design.
Appendixes
Appendix 1: Methodology 22

Appendix 1: Methodology

Between October 2021 and March 2022, Dalberg reviewed 36 loans across 29 financial intermediaries 

in nine countries to attain a comprehensive view of their performance against development objectives

and to identify lessons learned. The loans, ranging from US$5 to $250 million and with tenors from five 

to 30 years, originated over the last decade and were provided either directly to commercial banks, 

microfinance institutions, and non-bank financial intermediaries or indirectly through origination 

partners to assess and synthesize results from this diverse portfolio, we used as a unifying theme DFC’s 

overall development objective of growth in its Latin American target portfolio(s): underserved 

populations and enterprises.

To assess the loans’ performance against this objective, the Dalberg team evaluated the

performance of financial institutions and their relevant portfolios across three dimensions: 

(1) development outcomes, (2) compliance, and (3) sustainability. To ensure consistency and

practicality, the performance assessment leveraged the DFC’s Development Impact Quotient (IQ)

methodology to assess the scale, inclusion, and innovation of the development outcomes. The

compliance dimension aimed to understand whether financial intermediaries were complying

with DFC’s “use of proceeds” loan requirements and its environmental and social requirements.

The sustainability dimension aimed to understand whether positive impacts in the specific

portfolios were likely to be sustained after the DFC loan matures.

To ensure consistent and standardized performance measurements across the 29 financial 

intermediaries, four categories were used to score the overall performance of each financial 

institution on the three dimensions of development outcomes, compliance, and sustainability.

Outperforming

Satisfactory

Underperforming

Indeterminate

Financial institutions are in compliance with DFC loan requirements; 

demonstrate they have exceeded the original development targets; and 

have achieved development impacts that are likely to be sustained. 

Financial institutions are in compliance with DFC loan requirements 

and demonstrate that they meet DFC’s developmental targets and their 

development impact is likely to be sustained.

Financial institutions are not in compliance with DFC loan requirements 

and/or are not meeting developmental targets and are unlikely to sustain 

existing positive impacts.

The financial institution did not provide the data necessary to assess 

performance. 
Appendix 2: Table of recommendations for DFC mapped to relevant FIs 23

Appendix 2: Table of recommendations 

for DFC mapped to relevant FIs

At Origination Relevant FIs for recommendation:

Assess the intentionality of

the FI management to grow

the target customer segment

through differentiated

product offerings,

particularly for 2X loans.

• FI 19 does not have policies to reach women and did not meet the

2X target.

• FI 7 was not aware of being a 2X loan or even of what 2Xmeans.

• FI 9 does not have differentiated products to address the unique

needs of 2X entrepreneurs.

Incorporate climate and

sustainability into the

assessment, and value the FIs 

that are takings steps to

improve the impact of their

operations and that of their

portfolios.

Increase additionality by

targeting FIs that serve client

segments that are not being

served by commercial banks

and by ensuring that

favorable loan terms are

passed on to FI customers.

• FI 29 expressed interest in exploring green investments.

• FI 17 is expanding its climate-smart portfolio to individual and small

business borrowers.

• FI 5 recently issued a Green Bond for renewable energy,

greenbuilding, energy efficiency, and cleaner production subprojects

for SMEs in Country C.

• FI 4 is providing loans of <$1M to Agri-SMEs.

• FI 10 and 15 are providing low-income housing guarantees to

customers without access to housing loans.

• FI 16 was also able to offer longer tenors due to DFC financing.

• FI 2 raised the tenor from 60 to 96 months due to DFC’s loan.

• FI 7 provides home improvement loans to underserved low-income

borrowers.

• FI 19 increased the tenor of their loans from 50 to 58 months to 79

months.

• FI 21 increased the tenors from a range of 40 to 48 months to 60

months; however, the FI had access to other DFI financing at the time

of the DFC loan.

• FI 24 developed a leasing product with lower transaction costs and

interest rates for SMEs than their traditional loan products.

Use origination facilitators

more strategically and

selectively.

• FI 27, managed by a loan origination facilitator, is not reaching the

loan objectives.

• FI 22, a loan manged by an origination facilitator, did not provide any

of the requested data and was unresponsive to requests for

interviews with staff and clients.

• FI 25, a loan managed by an origination facilitator, does not monitor

compliance with use of proceeds requirements.

• FI 28 performed poorly, and the origination facilitator did not

monitor the loan to detect this issue early on.

• FI 24’s SME portfolio appears to be decreasing over time.
Appendix 2: Table of recommendations for DFC mapped to relevant FIs 24

At Loan Approval and

Underwriting

Strengthen development-related 

loan covenants to penalize 

borrowers for lack of cooperation 

or insufficient reporting of 

development impact data.

Enforce the target loan sizes 

provided by FIs to ensure that the 

impact of the loans is achieved.

Combine loans with technical

assistance on IMM data collection 

and reporting good practices.

• FI 25 was unresponsive and did not provide sufficient data for the

evaluation, despite indicating that it placed high value on its

relationship with DFC.

• FI 22 did not provide current information to enable a determination

on its compliance with covenants.

• FI 23’s management questioned whether reporting the information

requested was legally binding.

• FI 4’s average loan size was US$1 million, larger than DFC’s target of

US$667,000.

• FI 11 has an average loan size of US$856,000, larger than DFC’s target

of US$755,000.

• FI 8’s average loan size for the project has risen to ~US$170K,

compared to the estimate of US$50K established at origination.

• FI 25 could benefit from technical assistance to standardize impact

measuring and monitoring across all Member Entities and to develop a

consolidated impact management and measurement system.

• FI 24 required technical support to improve its environmental and

social plan.

• FI 1 requires support to develop a strategy to aggregate these

indicators and present them in an easy-to-read format.

Relevant FIs for recommendation:
Appendix 2: Table of recommendations for DFC mapped to relevant FIs 25

At Monitoring and 

Reporting

Provide more specific definitions 

of target customers (such as 2X or

SME), specific to the country

context.

Collect customer satisfaction

information and selectively

use third-party service

providers selectively to

collect additional end

borrower perspectives on the

transformative impact of

financing.

Add an “underperforming” 

category to ex-post evaluations 

using IQ to indicate loans that do 

not demonstrate growth in the

target customer segment aligned 

with the development objective.

• FI 19 had data for locally defined SMEs, but had issues submitting

data for IFC-defined SMEs.

• FI 24 tracks its SME portfolio using the local definition of an SME, 

which does not coincide with the IFC SME definition used by DFC.

• FI 16 reported that its contract capped annual sales at US$10 million,

when federal law defines an SME enterprise as having sales up to US

$1.1 million.

• FI 7 measures customer satisfaction through surveys when the term of the 

loan ends.

• FI 9 uses a platform that sends a short satisfaction survey to any person who 

has interacted with the bank to measure clients’ satisfaction.

• FI 13 is currently implementing a survey through 60 Decibels to send to end 

beneficiaries.

• FI 1 is currently implementing a survey through 60 Decibels to send to end 

beneficiaries.

• FI 2 is currently implementing a survey through 60 Decibels to send to end 

beneficiaries.

• FI 19 was rated as underperforming, as its overall portfolio is shrinking

and it did not reach the targeted number of women clients.

• FI 26 no longer provides housing loans to middle-income clients.

Relevant FIs for recommendation:
26

ENDNOTES

1. To score the development outcomes dimension, per guidance of and request from the DFC team, we used the IQ

tool at the evaluation stage, scoring using the following logic: Highly Developmental on IQ = Outperforming for our

assessment; Developmental on IQ = Satisfactory for our assessment; and Indeterminate on IQ = Indeterminate in

our evaluation.

2. To score the development outcomes dimension per guidance and request from the DFC team we used the IQ

tool at evaluation stage and scored along the following logic for our evaluation: “Highly Developmental” for IQ =

“Outperforming” for our assessment, “Developmental” on IQ = “Satisfactory” for our performance assessment; and

“Indeterminate” on IQ = “Indeterminate” in our evaluation. However, there are three exceptions to this scoring logic

which were rated as ‘underperforming’ and is explained on page 9 and 10.

3. The sum of financial intermediaries is 30, rather than 29, as FI 2's loan focuses on both Country B and Country E.

Also, the sum of loans is 37 rather than 36, again because FI 2’s loan focuses on Country B and Country E.

4. The sum of DFC’s investments exceeds USD 2.3 billion, as one FI could focus on more than one theme.

5. MSME includes loans that the FI provide to microenterprises only or both microenterprises and SMEs; while SME

only provides loans to SME end borrowers

6. The estimate of total number of DFC clients reached includes only the Fis where data was reported, and the

relevant loan portfolio grew. This number sums the SME, housing and MSME loans as 2X aligned loans would

double count since they are both 2X aligned and MSME, SME or housing.

7. Growth of the relevant portfolios assessed for each FI was calculated by estimating the change in the value/

volume of outstanding loans at disbursement to value/volume in 2021

8. The number of clients reached through DFC’ loan was calculated by adding the total number of DFC supported

clients served from 2018-2021 reported by each financial institutions in the Data Request Tool used by the

evaluation team. For the cases where the FI did not provide the information, the Dalberg team calculated the

numbers of clients reached by dividing DFC’s loan size by the average loan size per client of the relevant target

portfolio.

9. To score the development outcomes dimension, per guidance of and request from the DFC team, we used the IQ

tool at the evaluation stage, scoring using the following logic: Highly Developmental on IQ = Outperforming for our

assessment; Developmental on IQ = Satisfactory for our assessment; and Indeterminate on IQ = Indeterminate in

our evaluation. Two FIs were exceptions to this scoring logic: FI 19 was rated Developmental on

the IQ but as Underperforming on our assessment of development outcomes as its target portfolio (as stated in

their development objectives) has been shrink ing since origination; and FI 24 is rated Indeterminate in the IQ but

Underperforming in our assessment of development outcomes as it was able to share data, but its impact

performance did not pass the 37.5 threshold to be considered developmental.

10. oan si L ze, loan tenor length and number of development objectives were all statistically significantly correlated

with IQ scores with 90% confidence interval.