“Concerns related to FMO’s proposed and existing investments in FICOHSA”, 20 May 2021

...On the 7th of July 2020, a public letter was sent to urge FMO not to provide a new loan to Banco Financiero Comercial Hondureño S.A. (“FICOHSA”), which has been signed by 39 organisations, of which 17 are Honduran organisations. In addition, on the 8th of July 2020, Oxfam Novib expressed its deep concern regarding the proposed investment supplemented with a number of questions relating to the proposed investment and the existing financial relationship of FMO with FICOHSA...Through this letter, we want to urge you again not to approve the loan to FICOHSA. We also request an update about FMOs process in relation to this loan. We consider the way of handling our concerns and questions not as good practice and conflicting with the intention of ex-ante disclosure; to actively seek input and perspectives from its stakeholders, including on potential environmental and human rights violations. FMO has been investing in FICOHSA since at least 2007. FMO seems to justify its investment on the basis of progress being made in improving impact as per FMO´s objectives. Since 2007 we find FMO´s accountability on this progress has been limited and Honduran stakeholders have had little or no information on progress. After 14 years, this progress must be substantial to justify continuing. Furthermore, we see Honduras is a high risk context and FICOHSA as a high risk client in a high risk context. FICOHSA has been linked to a number of controversies including Dinant, DESA and breaking anti money-laundering rules in Panamá, as elaborated in our previous letter. FMO should communicate sufficiently detailed evidence to stakeholders on progress to date, and especially on: Improvements to FICOHSA´s due diligence as per the UN Guiding Principles – including human rights risk assessments and stakeholder engagement…[;]...How FMO monitors FICOHSA to ensure due diligence…[;]...How SMEs are being supported by FICOHSA...