In this interview Yvonne shares her insightful journey into the world of development finance, a sector where the pursuit of sustainability and social impact is as important as economic gain. Furthermore, she also shares advice for those looking to pursuit a career within financial development, as well as how she finds balance between an intense job and a private life.

Interviewed by Anna Marin

Please note that the views expressed in this interview are those of Yvonne Viktoria Mitschka and do not necessarily reflect the views of her employer, German Investment Corporation (DEG).

Your current role is, from what I understand, focused on promoting sustainable and inclusive financial systems in several countries in Africa by issuing loans to local financial institutions. Can you tell us how you became interested in finance that helps both people and the planet? And could you point out the big steps or turning points that got you to this point in your work?

I think I am characterized by two things: firstly, I am very mission driven. Whatever I am doing, there must be a mission. On the other hand, I am very pragmatic, and I am a doer. So, by reflecting on my passion of undertaking missions and executing tasks, I came to the conclusion that development finance could be something I could really thrive in. I got this mission I can run after, and I can achieve results.

However, given that development finance is a very “niche” thing, I bumped into a particular steppingstone that made me aware of this industry and that was a fellowship. After my studies in finance and economics I was granted a fellowship, founded by two foundations and supported by the German foreign ministry, which enabled me to work with sustainable cities in transition countries. Through this fellowship I got the opportunity to work with different international organisations, and one of these organisations was the European Bank for Reconstruction Development (EBRD). Via this organisation and fellowship, I found out about the world of development finance and ever since I have been working in this world.

By reflecting on my passion of undertaking missions and executing tasks, I came to the conclusion that development finance could be something I could really thrive in. I got this mission I can run after, and I can achieve results.

When looking at a new investments, you're involved from the start to the end. Can you describe in simple steps what you do from initiation to completion?

Every project has different steps, but in summary there are two milestones we are always working towards. First, we need to seek internal approval at DEG. This means that we need to assess the risks and convince several people that an investment into a particular financial institution is worth it. Second, we need to make sure that we, as an investment institution giving out this loan, and our client, the financial institution we are investing in, agree on the terms of the loan.

To make sure that the investment is a good investment, we always visit the client. Our clients are often banks and we usually visit them for several days, having intense discussions and conversations about everything the bank does and how our loan can help them. We need to understand their strategies, governance and different types of risks that the bank might encounter. I really like this part of my job a lot, I get to meet people and I learn so much more from talking to people compared to only reading about the bank in its financial statements.

After visiting the client, we write a report, present that internally and in the end get an approval that allows us to do business with the client. So, this is the first milestone, the second milestone is to negotiate and sign a loan agreement with the bank we are investing in. After that, we are able to disburse, and this is when tangible impact happens.

These two milestones might sound like they don’t take that long, but it usually takes between six months and one year from the first initial contact with a client to disburse the money to the client.

 I get to meet people and I learn so much more from talking to people compared to only reading about the bank in its financial statements.

But if we just circle back to the actual client a little bit, what makes a good client? How do you know that a bank is a good client and in what way does the initial contact commonly take place?

There are two ways that this often happens: the client might approach us, or we approach the client. With many clients we have longstanding relationships, and we help the client to expand their business over decades. This means that more often than not we have several deals with one client over time.

What all of our clients have in common is that they are very professional. A client is usually a large bank in the country  and that is good because that often means that we can have a big impact and achieve scale.

To have such long-lasting relationships with clients must be exciting, being able to follow them over a long period of time. Do you have any story about a client or an investment that has been particularly fulfilling?

Absolutely! So last year in December we signed a loan agreement with a client in Togo. That loan was a so-called sustainability linked loan which is a hot product nowadays in the development finance world and which constituted the first sustainability-linked loan with a banking group in West Africa. In the loan agreement, the client committed to achieving some sustainability-related targets that we previously had agreed upon. The agreement covered a climate action plan, including targets related to establishing a climate strategy and climate reporting.

In this specific project we also worked together with other development banks in Europe, and that is something we often do – working together. In this case, the French development bank was leading the deal, with the Dutch, Norwegian and German development banks participating in the loan among others. It is great that we do collaborate like this, not only to increase impact, but also for the team spirit and for learning how other development banks work. Therefore, this project with the bank in Togo was a successful project.

As a woman working as an Investment Manager at one of the world's largest private-sector development financiers, could you tell us about your experiences and perspectives on working within the finance industry? How do you see diversity and inclusivity playing a role in the financial sector's evolution, particularly in the regions you focus on?

As I said before, development finance is a niche within the finance world and what everyone in this business has in common is that we are all highly motivated and curious, and perhaps a bit adventurous. With this being said, diversity and inclusivity have been a part of the DNA for many development banks from the very beginning. But many development banks also promote diversity and inclusivity among their clients.

More often than not, when I travel to visit my clients, I do see women in senior management positions. Sometimes even more in Western Africa than in the middle of Europe, which is very cool to see.

Absolutely, and thinking about what you said before about your requirements when DEG invests in a new client – is diversity one of these requirements and something that a bank has to have some policy or similar around in order to become a client?

We are definitely looking at this, and we ask every client about information such as how many male and female board directors there are. Sometimes, when it comes to how the loan we issue is going to be utilised, we do ask our clients to utilise the loan proceeds to grow their lending activities with small or medium business managed or owned by women. So, we do not only look at our client, but also and especially at their lending activities. 

More often than not, when I travel to visit my clients, I do see women in senior management positions. Sometimes even more in West Africa than in the middle of Europe, which is very cool to see.

For many being interested in sustainable development finance, the journey to becoming an investment manager can seem daunting. What advice would you offer those aspiring to make a significant impact in this sector?

I think this is a very good question, because when I mention to people that I work in development finance, many people focus on the mission aspect of it. Indeed, it is important to look at what you do, but I think it is also important how you do it and with whom. For me it is important that my daily tasks also fit my strengths, I mean of course it is great to work with a mission that you believe in, but I think enjoying your daily tasks matters as much.

I also believe that having a great team is important and, as a piece of advice, I would suggest networking. Be interested in the people around you and the people you are working with. I also suggest to everyone who is interested in development finance to explore the different players and jobs  within the industry. Look around and see what works for you.

Also, two things that have helped me in the finance industry are the combination of radical curiosity and social fitness. The combination of these has helped me to gain and maintain respect. Radical curiosity means that I ask a lot, and I found that asking a lot of questions really helps you to lead. And when I talk about social fitness, I mean being interested in the people around you. Across all technical backgrounds and all hierarchies. I think it is important to listen to people and what they know, but also what drives them outside of work.

Be interested in the people around you and the people you are working with. I think this is as important as having a clear mission and enjoying the daily tasks.

Lastly, some say that life is a marathon and not a sprint. How do you keep up your energy level?

Indeed, the job is quite intense at times, but I do really enjoy it. But of course, it is important to be able to maintain a good energy level and re-energize from time to time.

What I do for my mind has to do with my interest in data visualisation. I am currently teaching myself a programming language on the side of my job and I do like it a lot. It requires a very different kind of thinking than my work does. So, my daily morning routine right now is a bit of coding as brain gymnastics, maybe similar to others’ yoga routine.

But as I said in the beginning, I am also a very hands-on person and a doer. I like to do practical things in my free time, as well as exercise. As an example, I really enjoy cooking and I work in a soup kitchen. In the soup kitchen,  I can see results of what I do quickly and I work with a team of people whose composition might vary from time to time.

Lastly, I am a Christian and I do practice my faith which is also a good opportunity to get in touch with people who have a different background from mine. This leads to some inspiration and when I get back to my job, I feel like I am better at thinking outside the box.

So, my daily morning routine right now is a bit of coding as a brain gymnastics, maybe similar to others’ yoga routine.