2020 was a year marked by widespread uncertainty and adaptation. For many of the micro and small businesses served by our portfolio of Responsible Financial Institutions (RFIs), both COVID-19 and the economic consequences of combatting it saw incomes reduced as businesses were forced to hibernate and people were ordered to stay home. For MicroVest, this new environment brought on accelerated learning, adaptation, and new ways of navigating the new normal. For our portfolio companies, the pandemic brought the need to strike a balance between continuing essential operations, customizing new financing terms for borrowers, and managing through a highly variable health crisis.
Turning the same lens on ourselves, we drew upon our experience navigating past crises to react constructively and proactively with our RFIs.
Over the course of 2020, many of our portfolio companies enacted pandemic-specific frameworks that helped them preserve liquidity, conservatively lend where appropriate, and manage their balance sheets prudently. To provide a buffer for RFIs throughout the pandemic, players across the microfinance investment sector rallied to collaborate on extending liquidity support, which allowed borrowers to focus on providing extensions of principal repayments to their most affected clients.
In normal times, funding from RFIs to underserved micro and small businesses helps broader segments of the population pull themselves out of poverty, earn a living wage and provide better opportunities for their children. During COVID-19, RFIs play an even more important role, helping communities retain the resources necessary to smooth out shocks.
As authorities started reopening economies in late May and early June, reporting from our portfolio companies revealed that most were poised to bounce back, as many of these businesses remained essential to their local communities. We are now seeing continued normalization of investment, as well as a high demand for financing growth in 2021.
The COVID-19 pandemic has highlighted the need to strengthen financial inclusion initiatives for underserved global communities. Our RFIs remain an invaluable resource for micro and small businesses worldwide, and we remain committed to banking these institutions so that their end borrowers can grow their businesses and support their livelihoods once again.
A few notable achievements for MicroVest in 2020 are below.
New Senior Leadership Appointments
In 2020, MicroVest appointed two new members to the senior management team by way of internal promotions and added one new member to its Board of Directors. These changes have led to MicroVest increasing the gender diversity of both our senior management and Board to greater than 33%.
Renee Della Ratta and Nathan Horst joined the senior management team following promotions and will be integral to enhancing our management’s capabilities going forward; Ms. Della Ratta was named Manager of Credit Underwriting and Mr. Horst named Director of Investments. Both Mr. Horst and Ms. Della Ratta have made significant contributions to MicroVest’s investment, portfolio and firm capabilities over the last ten and five years, respectively.
Laura Petrucci, CEO of the Winthrop Group, was nominated to the Board of Directors in March 2020. Ms. Petrucci brings decades of experience as a growth adviser for Fortune 1000 companies and will be invaluable to the firm as we work toward our next phase of growth. Prior to founding The Winthrop Group, Ms. Petrucci held executive positions at HBO, American Express, and Chemical Bank and has served on numerous boards, including I Have A Dream Foundation, Marlborough School (at large), Harvard Business School Association (LA), and Fashion Group International.
Operationalizing Diversity, Equity & Inclusion Practices
In 2020, MicroVest established a Diversity, Equity & Inclusion (DEI) working group to lead initiatives that systematize and foster an inclusive, equitable, and sustainable culture and work environment. With Yonathan Eyob as Chair and Kristy McKain as Vice Chair, the group will seek to further align our firm’s operations with the same DEI standards that we hold our borrowers and stakeholders to. Target outputs for the working group will include benchmarking surveys, the incorporation of diversity best practices across operating guidelines, diversity training and educational programs, volunteer opportunities, mentorship programs, leadership development, and more.
Verifying our Impact Procedures with the Operating Principles
In the second half of 2020, MicroVest’s impact management procedures and policies received independent verification by Luminis Advisors for its alignment with the Operating Principles for Impact Management. In 2019, MicroVest became among the first signatories to the Operating Principles, which were developed to serve as a common framework for the design and implementation of investors’ impact management systems. View our verification report here.
Fostering Continuous Improvement in Our Social Mission and Impact
In August 2020, MicroVest earned a B Corp Certification from the nonprofit B Lab, with an overall B Impact score of 103.2 — eight points above the overall median score awarded. With this designation, MicroVest joined growing community of more than 3,700 corporations from 150+ industries across 70 countries that have met the highest verified standards of social and environmental performance, transparency, and accountability. As a B Corp company, we are working to further integrate B Corp values into our own culture to foster continuous improvement in our social mission and impact. Our priority is to continue to set a positive example that emphasizes MicroVest’s commitment to promoting a healthy, vibrant, and ethical financial sector in the markets where we invest.