Japan International Cooperation Agency (JICA) is an incorporated administrative agency in charge of administering Japan’s Official Development Assistance (ODA). It contributes to healthy socioeconomic development in Japan and other countries through supporting socioeconomic development, reconstruction, and economic stabilization in developing regions, etc.

Gojo and Company, Inc. delivers financial services, with a particular emphasis on microfinance, aiming to provide financial services in developing regions.

JICA invested JPY 1.0 billion in Gojo and Company, Inc. in 2019, with the aim of improving access to finance and standard of living for low-income classes, and helping women’s empowerment in developing regions.

Gojo and Company strengthened its microfinance business in several developing regions where it operates with financing including investment by JICA.

Investment Overview

Gojo and Company, Inc. delivers microfinance in Cambodia, Sri Lanka, Myanmar, and India through its seven local subsidiaries and affiliates (as of October 2020).

In this project, JICA utilized an overseas investments and loans scheme to invest in Gojo and Company, Inc. In addition to JICA, several organizations including The Dai-ichi Life Insurance Company, Limited and JAFCO Group Co., Ltd. have invested in Gojo and Company, Inc.

Stakeholders

• 1) Contribution toward achieving the SDGs

The SDGs target “ensuring financial services, including microfinance” to achieve “Goal 1: No Poverty” and “improving access to financial services” to achieve “Goal 8: Decent Work and Economic Growth.”

In developing regions, improving access to finance is a major issue. In developing regions with a big gender gap, more than half of those adults who do not have accounts in financial institutions are women.

JICA actively supports improving access to finance and promoting women's empowerment in developing regions. As women make up 99% of the customers of Gojo and Company (as of October 2020), this project is considered to have positive implications in terms of both improving financial access and enhancing women's empowerment.

In this project, when making investment decisions, quantitative objectives were set in the examination stage such as proportion of women in borrowers and the number of people whose access to financial services is improved. Those objectives are also utilized in ongoing monitoring.

2) Evaluating efforts to minimize negative social impact

Gojo and Company is taking measures during the loan screening stage not to cause multiple debt problems through microfinance business and working on improving the financial literacy of borrowers. It has also formulated a group governance policy and advised all group companies to obtain Client Protection Principles certification as soon as practicably possible. In addition, it has an in-house social performance manager to work on impact measurement that captures changes in customers’ lives.

These are attempts to minimize potential negative impact generated by microfinance business by formulating policies and developing systems.

In this project, JICA actively valued efforts made by Gojo and Company, Inc. and decided on the investment. This is the case where not only positive impact but also the efforts to reduce negative impact, created by the business, were qualitatively confirmed and utilized in making an investment decision.

3)Stimulating flows of fund of private investment

This project is one of the examples of JICA’s active participation in impact investing. As an organization in charge of administering Japan’s Official Development Assistance, JICA has supported pioneering initiatives conducted by private companies through microfinance projects for the poor and investments in the JAPAN ASEAN Women Empowerment Fund. As international and development assistance organizations are accelerating their efforts to promote impact investing to achieve the SDGs, JICA’s entry into the impact investing market is a thought-provoking initiative to stimulate further flows of fund of private investment.