Norfund’s investees contribute to reducing poverty by creating jobs in developing countries
Jobs are vital to reducing poverty. They provide income and benefits to people and offer opportunities to improve knowledge and skills. Jobs are created directly in our portfolio companies, in their supply chains, and through the goods and services the companies provide.
Each year, Norfund collects and monitors data on the key development effects of our portfolio companies. In 2017, we collected data from more than 700 companies. Over 80 percent have reported data for two years or more, and this enables us to monitor their progress.
By the end of 2017, 292,000 people were employed in the companies in which we have invested, either directly or through funds. Women accounted for 39 percent of those employed.
In the companies with two consecutive years of reporting, the total number of permanent jobs increased by 28,000 between the end of 2016 and the end of 2017. Over 40 percent of these enterprises increased the number of people they employed in this period.
By buying goods and services from other enterprises, Norfund’s investee companies contribute indirectly to business growth and job creation. In 2017, our investee companies purchased goods and services worth NOK 16.8 billion from local suppliers. More than half of the enterprises reported increased local purchases in 2017, compared to 2016.
Enabling local smallholder farmers to deliver produce to larger businesses can be beneficial to both local communities and companies. Ten of our agribusiness investments have such engagements and 12,000 smallholders are now linked with these investees. 35 percent of these smallholder farmers are women.
Reducing obstacles for enterprise growth
Norfund’s investments also contribute to growth by reducing critical obstacles to the development of other enterprises. Unreliable access to electricity, for example, is a major obstacle to growth and job creation in the poorest countries. Surveys conducted by the World Bank report that 79 percent of enterprises in Sub-Saharan Africa experience regular electrical outages. The lack of a stable electricity supply is a major operational constraint for 40 percent of firms in this region. The energy companies in Norfund’s portfolio are helping to reduce this obstacle and, in 2017, produced a total of 14.7 TWh of electricity.
Providing access to finance also helps us to support enterprise growth. By December 2017, the financial institutions in which we have invested had issued 12.4 million loans to customers, including 9.4 million loans to microfinance clients, 2.3 million loans to retail clients, and 400,000 loans to SMEs.
Institutions with two consecutive years of reporting increased the total number of issued client loans by 7 percent.