Efforts for SDG 8: Decent work and economic growth
In 2015 member states of the United Nations (UN) adopted the Sustainable Development Goals (SDG’s). Implementing the SDGs will facilitate basic human needs and will be an investment towards a more equal future with increased global welfare and wellbeing. However, financing the SDGs is an enormous task that could never be completed without global cooperation. This month, special attention is drawn to SDG 8: Decent Work and Economic Growth. This goal is well-grounded in DGGF’s investment strategy.
Link between SDG 8 and DGGF’s investment strategy
Since its inception, DGGF has aimed to increase access to finance for the “missing middle”, those female or young entrepreneurs in underserved markets and fragile states that are too large for microfinancing, but too small or risky for conventional banking solutions. Recently, DGGF added priorities with a focus on supporting inclusive employment and products and services, meaning we aim to provide labour opportunities especially for vulnerable groups and low-skilled workers in society. This ties in well with SDG 8, as it promotes inclusive and sustainable economic growth, full and productive employment and decent work for all.
COVID-19 impact on SDG 8
However, working towards reaching these goals in underserved markets posed challenges to our fund as the pandemic resulted in widening inequality gaps worldwide and less potential for fair jobs creation. Under the current circumstances, certain local value chains remain disrupted, entrepreneurs face lockdowns and sectors must remain closed for business.
A recent report by the UN World Economic Situation and Prospects (WESP) showed that despite a generally improved economic outlook, entrepreneurs in underserved markets and fragile states, and especially women, are largely paying the price of unequal wealth distribution and the pandemic’s economic consequences. These conclusions underscore the importance of DGGF’s impact thesis as we target populations that suffer from a financing gap and aim to add value to markets where the financial infrastructure is fragile.
To minimize the negative impact of COVID-19 and keep moving towards reaching “decent work and economic growth”, the DGGF acknowledges the importance of sustainable and inclusive investments. These investments will have a crucial role for developing the underserved markets in the years to come, as also mentioned in the WESP report.
In this context, DGGF has aimed to support investees by providing additional capital, such as the Cambodia-Laos-Myanmar Development Fund II (CLMDF II). The fund operates in Southeast Asia and has invested in several SMEs that serve marginalized communities. The pandemic resulted in revenue losses, market disruptions, and the drying up of debt facilities. However, due to CLMDF II’s effort in raising additional liquidity from investors such as DGGF, their SMEs could continue their operations.