BIO shows strong growth in its investment portfolio and confirms its healthy financial position

13.07.2009
BIO, the Belgian Investment Company for Developing Countries has published its 2008 annual report. Its investment portfolio has increased significantly and net profits have reached 2.900 million Euros. On 31st December 2008, BIO net commitments stood at 172.9 million Euros, which represented an increase of 31% compared with 2007 (125.5 million Euros) at a constant USD/EUR rate.

Portfolio evolution

In 2008, BIO signed contracts amounting to an accumulated value of 41.6 million Euros, which represents a growth of 25%. Outstanding investments were up 38% over the course of the financial year. They rose from 87.2 million Euros to 120.4 million Euros. The proportion of direct investments in businesses also increased. All direct finance contracts concerned businesses present in partner countries of the Belgian Development Cooperation. From the geographic point of view, investments were spread as follows: Africa 27%, Asia 20%, Latin America 20%, others 33%.
“Despite the intensification of global challenges, 2008 was a year for rapid progress. By considerably reinforcing its portfolio, BIO reiterated its will to undertake solid investments which particularly accelerate development in target regions”, highlighted Alain De Muyter, Chief Financial Officer, BIO.

Impact on development

For the third consecutive year, BIO engaged the GPR© assessment tool as developed by DEG, its German counterpart, to measure the effects of its new development commitments. Independently, the GPR© tool assesses the impact of each new project on development, in addition to the strategic role of BIO in this framework. Overall, the new commitments taken by BIO in 2008 deliver a “good” development effect. On a scale of one to six, one being the highest, BIO reached a grade of 2.4 across all projects. In 2008, each BIO project was identified as making a contribution directly, or indirectly via investments in financial institutions, towards the financing of Micro, Small and Medium Enterprises. This is a positive result, fully in line with BIO’s mission, notably that of contributing to sustainable development and poverty reduction in developing countries.

Financial Results

Net profits stand at 2.900 million Euros (compared to 2.942 million Euros in 2007), and operational costs in relation to available means remained at 1.87%.

Significant facts

  • Completion of the first full review by the Belgian Government
    Published in February 2008, the review concluded that BIO remains an appropriate vehicle for applying state funding to private sector development
  • New internal organisation
    Ensuring BIO is best organised to fulfil future investment needs of all clients and stakeholders, in all types of organisation
  • Diversification of targets
    Financing of larger enterprises in addition toSMEs and new focus on the commercial banking sector
  • Doubling investment in SMEs
    From 6.9 million Euros at the end of 2007 to 11.4 million Euros at the end of 2008
  • Strengthening risk-bearing capacity
    Thanks to a new categorisation of risks and the corresponding mitigating actions that can be deployed when necessary
  • Raising awareness of best practices
    Through the first ever internal training session on incorporating International Labour Organisation (ILO) standards in development finance

Objectives for 2009

  • Playing a specific role amongst the key players of the development community in Belgium by helping to oversee the development of a solid private sector.
  • Remaining consistent by optimising long-term financial stability continuously supporting clients and partners.
  • Implementing a new strategy for the commercial banking sector through encouraging key players to extend financing to SMEs in developing economies.
  • Enhancing risk orientation by formalising and implementing risk assessment procedures based on peer-group best practices.
  • Increasing partnerships to raise awareness of BIO and capitalise on shared resources and experiences.
  • Continuing its collaboration with the DFI community by working together to further progress activity in the industry and its impacts on development.
  • Driving advances in corporate governance via continued internal awareness and by promoting good governance among clients.
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