At the time of writing, not all projectshave been able to provide the updated impact report forthe final year 2020. Nonetheless, it is clear that the effectsof the COVID-19 pandemic were felt across the entire CFCportfolio. Several projects have faced a scenario of lowerdemand, logistics challenges and falling prices. Still, mostprojects were able to keep providing the necessary supportfor their network of smallholder suppliers, with someof them even expanding the number of farmersreachedin 2020. However, in most cases the income level of the farmers was negatively affected. Also, some projects had to lay off people or postpone expansion plans, leading to a decrease in the number of jobs created and in the additional land under cultivation. On a portfolio level, including the new projects recently receiving CFC support, it is expected that CFC operations will overall show a higher impact in 2020 when compared to previous years, once all reports from projects are received.
A brief analysis of the main indicators corresponding to the SDGs framework is presented below:
SDG 1 - No poverty
In total, around 410,000 people stand to benefit from the loan-based interventions currently financed by the CFC. These beneficiaries are in most cases smallholder farmers, living below the poverty line of USD 1.90 a day, as defined by the World Bank. Through the initiatives supported by the CFC, these people will benefit from an income increase, helping many of them to step out of the poverty line. Although not all projects have reported the data, the additional annual net income for the beneficiaries is estimated to range from USD 100 to USD 833 per annum. For the year of 2020, the number of people directly benefiting from the projects supported by the CFC reached 59,000. The additional net income for these beneficiaries goes up to USD 677 per year.
SDG 2 - Zero hunger
The additional income received by the beneficiaries can have a great impact in achieving food security, contributing to the SDG 2. Also, several projects supported by the Fund help to increase the area of cultivating land and the productivity levels of the crops being cultivated by the smallholder farmers, which could also positively impact the SDG 2. In total, it is expected that 59,306 hectares of additional land will be cultivated from the interventions financed by the CFC. For the year of 2020, 5,414 hectares of new land were cultivated. This represents a decrease when compared to previous years, which is conspicuously attributable to the effects of COVID-19 pandemic.
SDG 5 - Gender Equality
The CFC encourages its projects to give special attention for vulnerable groups. In particular, several projects supported by the fund contribute to women empowerment, providing them training, employment opportunities, access to new markets and others. The projects are expected to report the percentage of female beneficiaries on their projects, the total jobs created for women, share of women in senior positions and of women ownership, among other gender-related metrics. In the current portfolio, we can observe that the female representation among the total beneficiaries varies among the projects, ranging from 13% up to 80%.
SDG 8 - Decent work and economic growth
The projects supported by the Fund expect to create 5,472 new jobs, giving employment opportunities to people living in vulnerable conditions. The annual income per job created ranges from USD 900 to USD 8,283. For the year of 2020, the projects supported by the fund have directly created 148 new jobs. The rate of job creation is below that of previous years, explained by the effects of the COVID-19 pandemic.
SDG 10 - Reduced inequalities
The CFC supports interventions in developing countries, giving special attention to projects targeting vulnerable regions and countries, such as the Least Developed Countries (LDCs). On the current portfolio, the Fund has 10 projects operating in LDCs, contributing to the economic growth, more value chain upgradations and/or productivity diversification and exports increase of these countries. The Fund also targets interventions impacting vulnerable groups, such as people living below the poverty line, indigenous/tribal/ethnic communities contributing to greater equality within the countries.
SDG 13 - Climate Action
CFC is committed to incorporating climate action into its investment strategies, focusing on the most vulnerable regions. CFC's projects are designed to foster climate resilience and promote low-carbon development pathways. By investing in sustainable commodity value chains, CFC is not only contributing to the mitigation of greenhouse gas emissions but also enabling communities to adapt to changing climate conditions and secure their livelihoods.
Surely measuring impact matters but we need to be realisticabout the constraints. It requires a level of research expertise,commitment to longitudinal study, and allocation ofresources that are typically beyond the capabilities of animpact investor like CFC. It is crucial to identify when it makes sense to measure impacts and when it might be best to stickwith outputs — especially when an organization’s controlover results is limited, and causality remains poorly understood. Overcoming these obstacles will require investors andfront-line organizations like IFC, IMF, and the likes have tomake a long-term commitment to research and collaborationto alleviate as many people as we can from the pit of povertyand share those with the likes of CFC for weighted impacts. We all can do well and do good at the same time.