Published by the Economist Intelligence Unit, October 2008, available at:

http://a330.g.akamai.net/7/330/25828/20081014142739/graphics.eiu.com/marketing/microfinance/English_Microscope%202008.pdf

The Economist Intelligence Unit released a 62 page report that provides a framework of the microfinance business environment in Latin America and the Caribbean. The report was commissioned by the Inter-American Development Bank and the Corporacion Andina de Fomento and also looked at three major individual features that provide greater insight to the microfinance arena.  The three categories are as follows: regulatory framework, investment climate and institutional development.  The indicator scores are aggregated to produce an overall score ranging from 0 to 100 (note, 100 being the best score).  While these scores are provided, the report utilizes these figures in a “strengths” and “challenges” framework. Continue Reading »

In 2005, MicroCapital reported enthusiastically that Pierre Omidyar, founder of eBay, and his wife donated USD 100 million to their former school Tufts University, to be managed as a for-profit fund exclusively for investments into microfinance initiatives. At the time, the Omidyar-Tufts Microfinance Fund was the largest single for-profit microfinance fund in the world. Continue Reading »

The Mexican microfinance bank, Banco Compartamos, announced its audited financial results for the fourth quarter of 2008 (4Q08) in a conference call. The figures were announced in pesos and have been converted here to US dollars. The figures adhere to the requirements of the Comision Nacional Bancaria y de Valores (CNBV), the Mexican banking and securities regulator. Compartamos underwent an Initial Public Offering (IPO) in April 2007, and has since been publicly traded on the Mexican Stock Exchange. The webcast is archived and can be accessed through this link. The 4Q08 Financial Statement is available for download here. Continue Reading »

Developing World Markets (DWM) has closed its DWM Microfinance Equity Fund I with a commitment of USD 82 million from four large institutional investors. The fund provides equity capital to microfinance institutions (MFIs) around the world. The Fund Manager, DWM Asset Management Limited Liability Company (LLC), now controls a total of USD 200 million in microfinance-related assets: a pool, which it states, is the largest in the world dedicated solely to MFI equity investment. Acting as Advisor to the Fund Manager is major microfinance investor SNS Asset Management. After the closing, Theo Brouwers, Director of SNS Asset Management said, “The success of the fundraising at a time of global economic turmoil demonstrates the confidence of international investors in microfinance as a stable asset class and that institutional investors continue to search for good investment opportunities that contribute to social development.” MicroCapital has previously quoted Theo Brouwers in his argument that despite the controversy over for-profit microfinance, the key to microfinance succeeding in poverty alleviation is to funnel institutional capital to developing countries lacking funds. DWM’s new USD 82 million fund is a step in that direction. Continue Reading »

The Grameen Foundation, in collaboration with Oikocredit, has developed a set of guidelines to help ensure a social impact of investments in microfinance.  In a press release, the foundation stated that in 2006 over USD 663 million had been invested into microfinance by US-based investors, much of it by socially motivated investors looking for a “social return” as well as a financial return.  Measuring the size of the social return, however, has always proved more difficult than measuring its monetary counterpart.  Continue Reading »

Compartamos Banco Fourth Quarter 2008 Conference Call

February 26, 2009, 11:00 AM EST, http://www.videonewswire/event.asp?id=55283 Continue Reading »

The Consultative Group to Assist the Poor (CGAP), a policy and research center housed at the World Bank dedicated to advancing financial access to the world’s underprivileged, released a path breaking 40-page report in February 2009 entitled, “Shedding Light on Microfinance Equity Valuation – Past and Present,” produced with limited analytical support from banking firm JPMorgan Chase & Co. The white paper is notable in providing an empirically grounded analysis of how financial valuation methods are actually applied by external actors to MFIs and other lending institutions with poverty alleviation goals. This is made possible by CGAP’s collection of information on 144 private equity transactions, the largest such dataset gathered to date, as well as information on 10 MFIs and other low income focused lenders that have raised funds through the issuance of securities. The original report is available at: http://www2.cgap.org/gm/document-1.9.9021/OP14v3.pdf. Continue Reading »

The Consultative Group to Assist the Poor (CGAP), a policy and research center housed at the World Bank dedicated to advancing financial access to the world’s underprivileged, released a path breaking report in February 2009 entitled, “Shedding Light on Microfinance Equity Valuation – Past and Present,” produced with limited analytical support from banking firm JPMorgan Chase & Co. The white paper is notable in providing an empirically grounded analysis of how financial valuation methods are actually applied by external actors to MFIs and other lending institutions with poverty alleviation goals. This is made possible by CGAP’s collection of information on 144 private equity transactions, the largest such dataset gathered to date, as well as information on 10 MFIs and other low income focused lenders that have raised funds through the issuance of securities. The original report is available at: http://www2.cgap.org/gm/document-1.9.9021/OP14v3.pdf Continue Reading »

The Consultative Group to Assist the Poor (CGAP), a policy and research center housed at the World Bank dedicated to advancing financial access to the world’s poor, has released a path breaking report in February 2009 entitled, “Shedding Light on Microfinance Equity Valuation: Past and Present,” produced with limited analytical support from banking firm JPMorgan Chase & Co. The white paper is notable in providing an empirically grounded analysis of how financial valuation methods are actually applied by external actors to MFIs and other lending institutions with poverty alleviation goals. This is made possible by CGAP’s collection of information on 144 private equity transactions, the largest such dataset gathered to date, as well as information on 10 MFIs and other low income focused lenders that have raised funds through the issuance of securities. The original report is available at:

http://www2.cgap.org/gm/document-1.9.9021/OP14v3.pdf Continue Reading »

The World Bank Group and the German government intend to launch a 600 million USD “Microfinance Enhancement Facility,” according to a report from the New York Times. The fund aims to support microfinance institutions in developing countries facing difficulties as a result of wholesale credit tightening stemming from the recent turmoil in global capital markets. Continue Reading »

Published by Microfinance Information Exchange (MIX), 13 pages, available for viewing here.
The Microfinance Information Exchange, Inc. (MIX) has released its 2008 MIX Global 100 Composite: Rankings of Microfinance Institutions. The business results of 971 MFIs for the 2007 financial year were surveyed, from which 652 profitable MFIs were sampled to present the 100 leading MFIs. The ranking measures the balance achieved by an individual MFI of three key attributes: outreach, efficiency and transparency. Outreach is determined by the number of borrowers, the growth in borrowers, market penetration, deposit to loan portfolio ratio and the depositors to borrowers ratio. Efficiency is measured by the cost per borrower to GNI per capita ratio, profit to loan portfolio, the portfolio at risk greater than 30 days and the write off ratio. Transparency is measured by the annual reporting on MIX Market and audits on MIX Market. Continue Reading »

Incofin, a Belgian private social investment company that invests in MFIs, has signed an agreement with Asomi, an MFI operating in Assam, India.  Incofin’s Rural Impulse Fund, which makes debt and equity investments in rural MFIs, acquired 25% of the capital of Asomi for an undisclosed amount.  The investment represents Incofin’s first entry into India.  Continue Reading »

Source: MicroFinanza Rating. Continue Reading »

Written by Arthur D. Little and based on the firm’s previous industry research, released on November 13, 2008 as a “Financial Services INSIGHT,” 4 pages, available on November 26, 2008 at: http://www.adl.com/reports.html?view=329.

Arthur D. Little (ADL), an international management consulting firm, released on November 13 a report entitled “Microfinance on the Rise,” which analyzes the current factors broadly affecting the demand and supply of microfinance and outlines the core operational components of a good microfinance practice. The report is an interesting analysis of the industry’s state of affairs and a strong prediction that microfinance is poised to become a new asset class for traditional investors.

Established in 1886, ADL was founded in Cambridge, Massachussetts, by two MIT chemists and has since grown to become largely a management consulting firm that currently holds the 33rd spot on Vault’s list of the most prestigious management consulting firms. Today, the company employs about 1,000 people in 20 countries, and in fiscal year 2006 the company brought in USD 239 million in revenues. Although ADL does not claim any unique contributions to microfinance, the organization holds at least partial responsibility for developing a number of modern innovations, including operations research, word processing, synthetic penicillin, LexisNexis, and NASDAQ.

What follows is a summary of the report: Continue Reading »

Cygma, the new microfinance foreign exchange (FX) risk management group, believes that the current financial situation is driving people in the microfinance industry to use foreign currency hedging facilities. The organisation will be launching its FX hedging products for illiquid and difficult-to-hedge emerging markets currencies in the first quarter of next year. These will be executed directly by the firm without reliance on third parties, supported by its USD 50 million capital reserve fund. Continue Reading »

The Islamic Business and Finance Network (IBF Net), a global network of students, researchers, and finance professionals, and its Institute of Microfinance and Development together with Islamic Relief Worldwide, an international development and relief organization, held an international training program and workshop to discuss the nuances of Islamic microfinance was recently held in New Delhi.    The program was attended by over sixty participants from the corporate sector, NGOs, and academics from India, Bangladesh, Sri Lanka and Afghanistan. Continue Reading »

Forprofit microfinance rating company MicroRate has announced the completion of the following public microfinance institution ratings between January 2008 and September 2008: Continue Reading »

Written by Nimrah Karim, Michael Tarazi and Xavier Reille and based primarily on secondary research by the Consultative Group to Assist the Poor (CGAP), released in August 2008 as Number 49 of Focus Note, a publication of CGAP, 16 pages, available on October 27, 2008 at: http://www2.cgap.org/gm/document-1.9.5029/FocusNote_49.pdf. Continue Reading »