Social and Inclusive Business

Social & Inclusive Business is driven by private- and public-sector stakeholders whose raison d’être is to make a positive social and environmental impact, from start-ups to local businesses, multinationals and not-for-profit organizations. They do this by coming up with innovative models and developing internal structures that are in line with their objectives.

To help grow the sector, AFD Group takes measures that strengthen the entire ecosystem, involving stakeholders such as businesses, support organizations, funding bodies, advocacy groups, governments and political decision-makers. Our initiatives target:

• Social businesses that have a clear social and/or environmental purpose and sustainable business model, whose internal structure reflects their objectives (e.g. their governance, use of profits and HR policies).
• Inclusive businesses that incorporate the most disadvantaged groups–those at the “bottom of the pyramid”–into their value chain, whether as customers, distributors or suppliers.

We are therefore helping to bring about development that adds greater social, economic and environmental value, one that tackles inequality through entrepreneurship.

From education to the health-care, food, energy and water sectors, promoting the inclusion of the most disadvantaged groups offers major economic prospects for those seeking customers or business opportunities. It is also a way of establishing a fairer, more inclusive economy.

AFD Group supports Social & Inclusive Business projects that make it easier for such groups to access basic goods and services. For example, we are helping to reduce infant malnutrition in Madagascar by supporting the Nutri’zaza initiative and improving access to clean drinking water through our work with operators such as the Phnom Penh Water Supply Authority (PPWSA) in Cambodia.

We also support those working in microfinance who are helping disadvantaged groups achieve greater financial independence. For example, AFD Group’s private-sector financing arm Proparco has invested in the Tunisian microfinance organization Enda Tamweel.

As part of its Social & Inclusive Business strategy, AFD group is promoting integration through economic activity. How? By facilitating the recruitment of persons remote from the labor market and providing them with the necessary conditions for a lasting improvement in their professional and personal situation.  

The primary components for qualifying an integration project through economic activity project are:

• targeting persons remote from the labor market according to the local context (Bottom of the Pyramid, migrants, people with disabilities, single mothers, etc.)
• integrating the latter, temporarily or long-term, in an economic activity coupled with an offer for training and/or apprenticeship and with working conditions adapted to their situation.

In Vietnam and Burma for example, AFD supported la Boulangerie française. Under the auspices of the Institute for Economic Cooperation and Development (IECD), this project enables young people to receive training while also working in manufacturing to learn different aspects of the bakery profession. They can then obtain a formal job and a decent wage. 

We help young economic stakeholders (including start-ups, VSEs, SMEs, incubators and funding bodies) get off the ground, primarily by backing support and funding organizations. 
We do this in a number of ways:

• Investments via funds. For example, in 2015, the Investment and Support Fund for Businesses in Africa or FISEA, which is advised by Proparco, invested in the Novastar East Africa fund, which supports entrepreneurs in East Africa who are developing basic services for the very poorest in the education, health-care, food and water sectors.
• Grants. Each year, AFD Group puts out a “call for initiatives” with the aim of identifying and supporting social and inclusive start-ups in a range of countries and helping to fast-track their entrepreneurial work. The first project to win AFIDBA (AFD for Inclusive & Digital Business in Africa) funding kicked off in 2019.
• Our Social and Inclusive Business Camp (SIBC), a networking programme for entrepreneurs that places particular emphasis on promoting gender equality.

AFD Group supports inclusive businesses, mature businesses with the potential to be more inclusive and funding organizations with the aim of guiding them towards a more inclusive approach and helping them to grow.

AFD and its subsidiary Proparco, which focuses on private-sector financing, make full use of all the financial tools at their disposal:

• loans,
• guarantees,
• investments,
• technical support.

A suitable institutional framework is key to ensuring that Social & Inclusive Business initiatives can be developed sustainably. AFD Group promotes the implementation of a framework that fosters Social & Inclusive Business (e.g. legal and tax frameworks, the adoption of common definitions or the establishment of labels), primarily by helping to structure advocacy channels in the countries in which it operates.

Our initiatives are targeted at public-sector stakeholders, such as legislators, political decision-makers and advocacy groups, who benefit from AFD loans.