Background

Some 30 years ago, providing microloans to poor individuals to start businesses was principally the domain of non-governmental organizations (Opportunity International, Accion International), donor agencies (World Bank, USAID), and philanthropies. In the past decade, however, as microfinance has developed into a financial services delivery system and demonstrated financial performance, it has drawn the attention of individuals, wishing to support impoverished families, and institutional investors with a social mission combined with profitable returns.  The microfinance sector has accordingly responded with a variety of ‘investment’ offerings.  Individuals can now make loans online to targeted microentrepreneurs through Kiva or can invest through Microplace.

Institutional investors (e.g. pension funds) now have a range of investment options, from debt to equity to collateralized debt obligations, to guarantees, and public offerings.  These are typically bundled as Microfinance Investment Vehicles (MIVs).  MIVs have grown from USD 1.2 billion in assets under management in 2005 to over USD 7.7 billion at the end of 2009.   However, it is estimated that USD 250 billion is needed to meet the demand by the microfinance sector.

Analyses

Credit Ratings

Statistics/Data on Microfinance Investments