MICROFINANCE PUBLICATION ROUND-UP: e-MFP Survey of Investors in Tier 2/3 Microfinance Institutions; The Business of Doing Good; Benchmarking Inclusive Growth and Development

“Annual Survey 2014, e-MFP Action Group of Investors in Tier 2/3 MFIs;” prepared by Gabriela Erice, Daniel Rozas and e-MFP in collaboration with the e-MFP Action Group of Investors in Tier-2/3 Microfinance Institutions; published by the European Microfinance Platform (e-MFP); 2015; 22 pages, available at http://www.e-mfp.eu/sites/default/files/resources/2015/01/Annual%20Survey%202014%20-%20final.pdf

The “Investors in Tier 2/3 MFIs Action Group” of the European Microfinance Platform (e-MFP), a Luxembourg-based network of approximately 130 microfinance organizations and individuals, has released the results of its third annual survey detailing the analysis of investments of the action group members for the year 2013 [1]. Microfinance institutions (MFIs) with assets worth between USD 5 million and USD 50 million are categorized as tier-2 MFIs, and those with assets of less than USD 5 million are considered tier-3 MFIs. The survey reports that 23 percent of the total amount of investments made by the 11 participating action group members in 2013 were made in tier-2/3 MFIs, accounting for 58 percent of the total number of investments. Approximately 90 percent of the investments were made through debt instruments except in South Asia, where 30 percent were equity investments. Of the total value of investments made, Eastern European and Central Asian countries received 50 percent while Latin American and Caribbean countries received 25 percent. Of the investors that participated in the survey, five offered technical assistance to their investees.

“The Business of Doing Good: Insights from One Social Enterprise’s Journey to Deliver on Good Intentions;” by Anton Simanowitz and Katherine Knotts; published by Practical Action; 2015; 152 pages; available for purchase in electronic or paper format via the sources listed at http://www.thebusinessofdoinggood.co.uk/order-the-book.html

The authors of this book explore why microfinance institutions (MFIs) and other “social purpose organizations” that aim to improve lives of their constituents might fail to do so, or even exacerbate the very issue they seek to minimize. The book provides six “insights” to encourage MFIs and other organizations to find new approaches to deliver on their intentions: “don’t just offer products, respond to client needs;” “ask good questions, have good conversations;” “do what it says on the tin;” “motivate staff to do difficult work in an excellent way;” “own the dirt road;” and “adapt to the changing landscape” [2]. The book references the case of Angkor Mikroheranhvatho Kampuchea (AMK), a Cambodian MFI, as an organization that has “made radical choices and reached deep into rural villages, touching the lives of almost two million people living in poverty.”

“Benchmarking Inclusive Growth and Development, Discussion Paper;” by Richard Samans, Jennifer Blanke, Gemma Corrigan and Margareta Drzeniek; World Economic Forum Discussion Paper; 2015; 38 pages; available at http://www3.weforum.org/docs/WEF_Inclusive_Growth_Development.pdf

This discussion paper provides a framework comparing how various countries make use of policy incentives and other institutional mechanisms to expand socio-economic inclusion. Performance is evaluated across six policy domains or “pillars:” education and skills; employment and labor compensation; asset building and business investment; corruption and rents; fiscal transfers; and basic services and infrastructure [3]. The paper provides preliminary results from 17 high-, middle- and low-income countries across the six pillars as well as offers “best practices” based on the experiences of other countries. The authors stress, however, that there is no unique ideal policy and institutional mix that achieves inclusive growth and development, and hence the framework does not apply different weights to the pillars or the 14 subpillars. “Asset building and business investment” addresses how conducive the regulatory, cultural, infrastructural and financial environment of a country is to small business entrepreneurship. For this pillar, the high-income countries scored between 3.89 and 5.03 on a scale of 1 to 7; middle-income countries scored between 2.67 and 4.48; and the low-income countries scored between 1.99 and 3.22.

By Nisha Koul, Research Associate

Sources and Additional Resources:

[1] European Microfinance Platform, Annual Survey 2014

[2] The Business of Doing Good, Six insights on improving business to do good

[3] World Economic Forum Discussion Paper, Benchmarking Inclusive Growth and Development

European Microfinance Platform (e-MFP): https://www.microcapital.org/category/european-microfinance-week/

MicroCapital Story, October 2014, Over-indebtedness, Microfinance and Environment Award, Conflict Zones at e-MFP’s European Microfinance Week

MicroCapital Story, June 2014, Grameen Credit Agricole Microfinance Foundation (GCAMF) Loans $2m to Cambodian Angkor Mikroheranhvatho Kampuchea; Invests $546k in Equity in Palestinian Arab Center for Agricultural Development

MicroCapital Universe Profile, European Microfinance Platform

MicroCapital Universe Profile, Angkor Mikroheranhvatho Kampuchea (AMK)

MicroCapital Universe Profile, World Economic Forum

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

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