Integrating the Principles for Investors in Inclusive Finance (PIIF) into the Principles for Responsible Investment (PRI)

As the provision of financial services to the world’s poor has grown, the Principles for Investors in Inclusive Finance (PIIF) have, since their inception in 2011, sought to protect the interests of people that are often lacking the financial knowledge, power and influence enjoyed by the financial institutions that they are dealing with.

The PIIF have been a distinct set of principles within the Principles for Responsible Investment (PRI) for investors working in inclusive finance, and while the PRI remains fully committed to the values espoused by the PIIF, it has become increasingly clear that addressing inclusive finance through a bespoke set of principles within the already principles-based PRI was unclear for signatories, and having distinct reporting processes was unhelpful in surfacing trends and progress – despite the additional reporting demands involved.

The PRI board, in consultation with PIIF signatories, has therefore decided to integrate the PRI’s approach to inclusive finance with the rest of its work across ESG incorporation, active ownership and systemic issues, bringing an end to the PIIF as a distinct entity.

The move to integrate inclusive finance into the PRI’s core work streams includes producing guidance on inclusive finance – as the PRI does across other asset classes – and folding the previously distinct inclusive finance reporting into the primary PRI reporting framework. This will then be built on to roll out outcome-based reporting beyond inclusive finance to other thematic/impact investments in the reporting framework, based on areas covered by the Impact investing market map.

One important role the PIIF has played has been in establishing a civil enforcement dynamic within the industry, whereby asset owners have increasingly required their inclusive finance investment managers to be signatories to the PIIF, and have reflected the importance of this in investment management agreements. In line with the PRI’s wider belief in the critical role that asset owners play at the top of the investment chain, the PRI’s work on inclusive finance will continue to focus on manager selection and investment management agreements as key areas of good practice in inclusive finance.

The PRI is proud of the role that the PIIF and its signatories have played in driving responsible inclusive finance, and is excited about further progress in the years to come.

History of the Principles for Investors in Inclusive Finance (PIIF)

In January 2011, 40 global investors became the first to sign the Principles for Investors in Inclusive Finance (PIIF). The PIIF was the initiative of this core group of investors and Her Royal Highness Princess Máxima, the UN Secretary-General’s Special Advocate for Inclusive Finance for Development. The group developed the Principles together with the PRI and in consultation with Consultative Group to Assist the Poor (CGAP), as well as several other key industry players.

By signing the principles, investors stated their commitment to fair treatment and protection of the interests of the ultimate clients in inclusive finance – low-income households and small and medium-enterprises. Signatories asserted the goal of supporting and investing in those financial service institutions that offer responsible micro-finance.

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    Practical guide for investors in inclusive finance

    February 2019



Practical guide for investors in inclusive finance