Impact finance

Impact finance is becoming increasingly central to development cooperation. It not only facilitates access to financial services for marginalised communities but also channels funding into projects that generate social and environmental benefits alongside financial returns. By doing so, impact finance promotes economic inclusion and poverty reduction.

By aligning investments with the Sustainable Development Goals, this sector fosters inclusive and sustainable growth, while attracting private capital to complement public funding. Impact finance is a key driver in the transition towards a fairer, more environmentally responsible economy, addressing global challenges such as social inequality and climate change.

Luxembourg Cooperation strategies, "The Road to 2030" and "Inclusive and Innovative Finance", support impact finance initiatives to expand access to financial services for vulnerable populations and enable small and medium-sized enterprises to grow. 

LuxDev’s work in this sector focuses on creating economic opportunities for all, especially women and young people, strengthening community resilience, and driving innovation.

Impact finance is a powerful tool for directing financial flows towards initiatives that support the SDGs. It plays a crucial role in engaging the private sector to ensure quality financial services are accessible to all, including the most vulnerable.

LuxDev’s interventions cover various themes, including:

• financial inclusion;
• entrepreneurship financing for women and youth;
• agricultural finance;
• climate finance.

We also support financial institutions and promote innovation in this field. 

These initiatives provide individuals and small businesses with the resources they need to invest, manage risks, and improve their livelihoods.

Our approach is integrated and locally adapted, ensuring that financial solutions are innovative, sustainable, and participatory. We build strong partnerships with local financial institutions, governments, international organisations, and both public and private impact investors. These collaborations ensure long-lasting positive impacts and financial sustainability.

Additionally, LuxDev invests in impact-driven financial instruments and investment funds. We seek to leverage private investment and establish technical assistance facilities to support financial institutions and beneficiaries in our partner countries.