Development Report 2022
The promotion of local corporate financing is an important driving force in creating skilled jobs, income and prospects on the ground. The safeguarding and further development of qualified jobs are of the utmost importance, as vocational training and employment, in particular, pave the way out of poverty. Jobs not only provide monetary income. They are the cornerstone of development by boosting living standards, raising productivity and fostering social cohesion. This is also recognised in SDG 8 (Decent Work).
In 2022, DEG’s portfolio companies employed around 3.02 million people. The number of employees at these customers has risen by almost 811,000 since DEG invested in them.
The approximately 1,000 companies that DEG invests in via funds offer employment to approximately 1.9 million people. 500,000 of these jobs are newly created.
* Middle East and North Africa
When it comes to creating jobs, it is not just the number of jobs that counts. Ensuring that they meet certain standards is equally important. For this reason, DEG requires its customers to comply with the International Labour Organization’s (ILO) core labour standards and basic terms and conditions as well as the International Finance Corporation (IFC) Performance Standards and to implement good HR and occupational health and safety management systems. Committing to better working conditions pays off for companies as better conditions increase motivation and productivity and reduce staff turnover and absenteeism.
86% of all DEG’s customers provide decent jobs. The remaining customers are working to improve their employment situation with the support of DEG. In addition, DEG is committed to promoting employee training among its customers. This is a key factor in companies’ further development, as they are often unable to find qualified staff to fill these vacancies.
A total of 78% of companies invest in the further training of their employees, meaning that they contribute to lifelong learning in line with SDG 4 (Quality Education).
DEG supports its customers by offering promotional programmes – financed using both funds made available by the German Federal Ministry for Economic Cooperation and Development (BMZ) and DEG’s own funds – in areas such as the further development of labour standards, training programmes or improvement of HR management.
DEG is committed to promoting women in the workplace and is a supporter and founding member of the 2X Challenge – an initiative of the G7 countries’ development finance institutions (SDG 5, Gender Equality) for gender-lens investing. This means mobilising capital for companies that are owned by women, are managed by women or specifically promote women as employees and customers. DEG contributed over USD 716 million to the 2X Challenge initiative in 2021 and 2022. A corresponding study commissioned by the Development Bank of Austria (Österreichische Entwicklungsbank, OeEB) and DEG shows how development finance institutions (DFIs) can provide concrete support to their customers.
Around 950,000 women were employed by DEG’s existing customers in 2022. Some 16% of portfolio customers employ more women or have more female managers than the industry average.
Name: BRAC Bank Ltd.
Invested volume (in EUR): 38.7m
Country: Bangladesh
DERa-category: Decent jobs
% achieved of DERa category: 50
Decent jobs are a high priority for BRAC Bank. In 2021, it created over 612 new jobs, bringing the total number of employees to 7,619, for which BDT 9 million was spent on training. An important aspect of DEG’s support for BRAC Bank is the advancement of women. As part of a “Gender Action Plan”, financing offers for female entrepreneurs are to be improved and the share of women in BRAC Bank’s workforce and at all management levels is to be increased.
Name: African Development Partners III, L.P.
Invested volume (in EUR): 8.4m
Region: Africa national
DERa category: Decent jobs
% achieved of DERa category: 71
For African Development Partners’ private equity fund ADP III, job creation and good working conditions are of great importance. In 2022, the portfolio companies employed 30,246 people, of whom around 85% are considered permanent employees and 31% are female. In addition, approximately 27% of all employees received training in the reporting year. Since the investment by ADP III the portfolio companies have created 12,842 jobs. In all ADP III companies every employee receives wages above the subsistence level. In addition each portfolio company offers at least three types of social benefits, such as government or private healthcare, profit sharing or retirement benefits.