Arthur Arnold has no affinity with scepticism about the commitment of Southern money lenders to principles of social responsibility. "It is completely up to the South to determine its norms and values. As it is up to us to determine what we will do about it. But I am much more positive than others about the willingness of countries like China to adhere to international standards. Of course it will take time. In my view, China really has a point in saying that it took the West more than a century to attain its present standards." Neither does Arthur Arnold join the choir of critics, worrying about the rapid economic expansion of China on the African continent. "We have always been calling for more investments in Africa. Now it is finally happening. What is wrong with that?"
For FMO the increasing South-South investments are a reason to concentrate on innovative services. One trend for the coming years is the expansion of local currency financing. This is essential to companies that earn their income in local currency and have a hard time paying back loans in hard currencies. Another trend will be housing finance. Arthur Arnold: "The demand for housing in emerging markets is enormous. But the risk in financing these projects is very high, as there is hardly any experience with matters like mortgages. Commercial banks will only step in when it has been proven that the risks are low."
FMO was founded some 20 years ago to creates access to finance and knowledge for private companies and financial institutions in developing countries. Since 2005, when the Dutch government made its final financial contribution to the capital base of FMO, the bank is self-supporting. 2006 has been an unprecedented success for the bank. With a portfolio of 2.5 billion Euro in some 80 countries, net profits rose by 84%, reaching 134 million Euro. The expectations for 2007 are lower. FMO reckons with declining economic growth in the majority of regions in which the bank is active. Arthur Arnold: "Also, continuing high liquidity levels, increasing competition and our strategy to seek investments with higher risk profiles, will all put pressure on our results."
P+ webtip: FMO