FMO, the Dutch entrepreneurial development bank, invests in businesses and financial institutions in developing and emerging markets to foster inclusive and sustainable prosperity. Through the MASSIF fund, FMO provides capital and support to local financial intermediaries, enabling them to extend financial services to MSMEs, which are key drivers of economic growth and employment in Sub-Saharan Africa.
Our role
We are leading an independent evaluation of FMO’s MSME funding (via financial institutions) and its employment outcomes, generating robust evidence on what works (and for whom) and highlighting opportunities to strengthen future strategies for inclusive growth.
Despite the recognised link between MSME investment and economic growth, the evidence on how such funding translates into employment outcomes, especially job creation and job conditions, remains mixed.
This evaluation seeks to address this gap by examining the pathways through which FMO’s support to financial institutions impacts employment within supported MSMEs and their supply chain, with a focus on both the quantity and conditions of jobs created.
Methods and approaches
To achieve our goals, we use a structured, flexible, and participatory approach, including:
- Theory-based evaluation to map the impact pathways from MSME funding to employment outcomes, considering both direct and indirect effects.
- Contribution analysis that assesses the degree to which FMO’s support contributes to observed changes in employment, while accounting for external factors and alternative explanations. The evaluation has two rounds of data collection and regular stakeholder engagement to refine findings, update the contribution narrative and adapt.
- A literature review synthesising global and regional evidence on MSME finance and employment, with a focus on Sub-Saharan Africa.
- Portfolio analysis to examine the characteristics and outcomes of MSME portfolios across a sample of FMO clients.
- Primary data collection, including conducting interviews and surveys with MSMEs, employees and key informants to gather real-world evidence of job creation and improvement.
Outcomes and impact
As the evaluation is ongoing, the anticipated outcomes and impact include:
- Clear, actionable findings on how FMO’s MSME funding supports job creation and improvement, including for vulnerable groups.
- Practical recommendations to inform the revision of the MASSIF strategy and enhance FMO’s impact on inclusive employment.
- Enhanced understanding and capacity among FMO clients to leverage financial and non-financial services for better employment outcomes.
