An Inclusive and Sustainable Future
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Measuring what really matters An inclusive and sustainable future SOCIAL PERFORMANCE REPORT 2020 Executive summary Introduction Macroeconomic context Impact on entrepreneurs Our response to COVID-19 Speeding up digitalization Women's empowerment Environment Displaced people & migrants > Information on the graphic resources used in the Report Start BBVAMF Social Performance Report 2020 2 • Executive summary Introduction Executive summary Macroeconomic context Impact on entrepreneurs Our response to COVID-19 BBVA Microfinance Foundation (BBVAMF or the Scale and reach Foundation) —a non-profit institution created Speeding up digitalization within the corporate social responsibility framework Women’s empowerment of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA)— 2,612,144 Clients % o/total Total clients Environment is the majority shareholder of six microfinance institutions across five countries. Displaced people & migrants Dominican They are united by a shared purpose: the Republic sustainable development of vulnerable Banco entrepreneurs through productive finance. Their Adopem 381,746 15 methodology is based on knowledge of individual microentrepreneurs and their needs. This enables Panama them to support their clients financially so that they Microsern 14,468 1 generate sustainable economic surpluses over time, Colombia enabling them to improve their financial health Bancamía 1,422,185 54 and wellbeing, as well as that of their families and communities. Peru Financiera The commitment to the client’s optimal (financial) Conanza 683,166 26 lifecycle is reinforced by the social impact produced. The impact measuring system is transversal, so proposals can be looped back and the Group’s activity aligned to the maximum with its mission to promote the sustainable economic and social Chile progress of vulnerable entrepreneurs. Fondo Esperanza 106,583 4 Emprende Micronanzas 3,996 BBVAMF is the majority shareholder in these six micronance institutions Start BBVAMF Social Performance Report 2020 3 • Executive summary Introduction Including vulnerable populations financially Macroeconomic context Impact on entrepreneurs Our response to COVID-19 Serving vulnerable entrepreneurs Encouraging inclusion Speeding up digitalization Women’s empowerment In the economic sphere In the social sphere Environment Displaced people & migrants 19 Banked in 2020 81 50 60 32 33 Vulnerable + poor: Women Rural entrepreneurs Total clients generating incomes less than 3 x their country’s monetary poverty line 13 20 Older Young (> 60 y.o.) (< 30 y.o.) Migrants & refugees 31 21 44,144 Clients generating income 38 Primary education below the poverty line entrepreneurs at best 10 Ext. poor Poor Vulnerable Others Start BBVAMF Social Performance Report 2020 4 • Executive summary Introduction Towards sustainable multidimensional development Macroeconomic context Impact on entrepreneurs Our response to COVID-19 Protecting their nancial health Tracking their progress Backing welfare and the environment Speeding up digitalization Women’s empowerment Environment Displaced people & migrants clients clients 48,536 Savings 52 of entrepreneurs take out products to upgrade 2,399,909 clients raise their income their homes & sanitation +22 from 2019 64 of entrepreneurs 82,069 clients Nº people receiving take out more than 3 loans take out healthcare & nancial education medical attention insurance 401,648 16 of entrepreneurs employ others in 2,993 clients their businesses take out educational loans for their children 2,023 clients take out green loans 4,473 clients have climate-change insurance Start BBVAMF Social Performance Report 2020 5 • Executive summary Introduction With solvent and responsible microfinance institutions Macroeconomic context Impact on entrepreneurs Our response to COVID-19 Robust nancial gures Diverse employee base Speeding up digitalization Women’s empowerment Gross portfolio Total disbursal 7,609 BBVAMF Entities Environment 980 +3 944 −30 employees Displaced people & migrants 30 48 Average loan Client funds Female 1,235 +10 635 +25 directors Diverse alternative channels Caring for the environment Carbon footprint Non-indep. 49,185 201 2,462 96 Total 583 branches transaction t CO eq t CO eq t CO eq & express oces points 2,759 t CO eq 62% 19% 90% 0.34 t CO eq 189,835 per employee 643 own registered users banking agents on the mobile app Scope 1 Scope 2 Scope 3 Land-based Electrical Air fuel & transport energy travel Start BBVAMF Social Performance Report 2020 6 • Executive summary Introduction With independent & equitable corporate governance Macroeconomic context Impact on entrepreneurs Our response to COVID-19 Independence Speeding up digitalization Women’s empowerment BBVAMF Bancamía Financiera Conanza Banco Adopem Microsern Fondo Esperanza Environment Board of Trustees Board Board Board Board Board Displaced people & migrants Non-indep. Independent 50 50 Non-indep. Independent Non-indep. Independent Non-indep. Independent Non-indep. Independent Non-indep. Independent 14 86 14 86 37 63 40 60 71 29 Diversity BBVAMF Bancamía Financiera Conanza Banco Adopem Microsern Fondo Esperanza Board of Trustees Board Board Board Board Board Women Men 63 37 Women Men Women Men Women Men Women Men Women Men 43 57 43 57 38 62 20 80 – 100 Start BBVAMF Social Performance Report 2020 7 • Executive summary Introduction An unprecedented economic and social reverse Macroeconomic context Impact on entrepreneurs Our response to COVID-19 In 2020, the COVID-19 pandemic affected the entire The immediate response to the pandemic, both in planet, accounting for around 10,500 cases and scale and reach, was unprecedented. Governments To tackle the fall in activity and the Speeding up digitalization 225 deaths for every million people. adopted a series of monetary and fiscal measures backward steps in wellbeing, the Women’s empowerment to mitigate this deep impact, while the private sector Environment This has posed huge challenges for healthcare has also set in place a range of actions with the creation of small enterprises, in systems, in both developed countries and emerging same purpose. Even so, these countries as a whole Displaced people & migrants economies. To tackle the virus and minimize the have suffered their sharpest fall in economic activity which access to finance is key, was speed of its spread, mobility restrictions were and the greatest reverse in welfare in recent history. seen as a potential solution adopted, and a multitude of economic activities were locked down, which had a seriously prejudicial effect on the earnings capacity of many low-income people and those in vulnerability across the world. The countries where we operate have been at the epicenter of the epidemic. It has manifested itself in the harshest terms, revealing the vulnerability suffered by most of the population in our footprint. It is hard to control mobility in surroundings where Increased urban settlements live in precarious conditions, unemployment with high population densities and informal Individual Requires employment. This has been a catalyst in spreading initiative as access to infection, causing greater stoppages to economic activity, which not only has not succeeded in a driver the nance slowing the virus, but has increased poverty levels of change: channel: and inequality, widening the gender gap, since it has had more impact on activities traditionally done by High levels of Microenterprises Micronance women. informal working Start BBVAMF Social Performance Report 2020 8 • Executive summary Introduction Impact of COVID-19 on the economy of our footprint Macroeconomic context Impact on entrepreneurs Our response to COVID-19 Real GDP growth Monetary poverty Monetary poverty % of companies at risk of closing Real GDP growth VariationReal GDP growth Variation Variation permanently due to the crisis Speeding up digitalization Variation Variation 3.8 Women’s empowerment 3.4 29.7 29.7 3.8 2.8 3.8 0.8 3.4 3.4 2.3 2.5 27.4 27.4 1.9 Environment 2.8 2.52.8 1.7 2.5 26.4 26.0 26.4 26.0 3.1 2.3 2.3 25.2 25.2 1.9 1.7 1.9 1.7 0.8 24.8 24.8 Displaced people & migrants 0.4 0.8 0.8 0.4 0.4 0.3 9.3 0.3 0.3 When the restrictions on mobility disappear and the currently hidden unemployment becomes apparent, the informal sector may return to being the labor market’s shock absorber Unemployment Unemployment % of the economically active population % of the economically active7.9 population 23.4 8.7 7.9 Unemployment7.9 8.7 8.7 17.8 2015 2016 2017 2018 2019% of the2020 economically17.8 active population 2015 2016 2017 20182015 20192016 20202017 2018 2019 2020 = 70 Base Footprint Latam 2015 2016 2017 20182015 20192016 20202017 2018 2019 2020Large Medium Small Microenterprises Footprint Latam Footprint Latam 17.8 13.7 13.7 11,6 5.7 M people11,6 fell into poverty The slump in activity has been in 2020. Due to the combined 13.7 9.2 so extreme that incomes per 9.2 effect of the measures adopted, Microenterprises have suffered 8.0 8.5 8.0 8.5 11,6 person have fallen to their levels 7.4 a further 4.9 M avoided doing 7.4 6.5 6.8 6.5 the6.8 most, experiencing greater of 7 years6,0 ago so, in6,0 the short term 5,4 5,5 9.2 5,4 5,5 8.0 8.5 difficulties with remote working and 7.4 6.5 6.8 6,0 5,4 5,5 in adapting & implementing health protection measures Mujeres Hombres Mujeres Total Hombres Total 2017 2018 2019 2020** 2017 2018 2019 2020** Mujeres Hombres Total 2017 2018 2019 2020** Start BBVAMF Social Performance Report 2020 9 • Executive summary Introduction Impact of COVID-19 among our microentrepreneurs