Microfinance Institutions (MFIs) around the globe are looking to national and international capital markets to fund their growth.
At a microfinance conference in
As the microfinance sector transforms from the segmented, non-profit market of 20 years ago into a more professional, profitable, transparent, and technologically-savvy industry, it is turning to capital markets to fuel growth, and investors are taking notice.
Since many MFIs lack banking licenses, they are unable to accept deposits, and must turn to commercial banks for funding. Because this route can be costly, some MFIs are exploring bond issuances. According to Fernando Alvarez Toca, chief financial officer of Mexico’s Financiera Compartamos, "Bonds provide us with cheaper funding…and we can use them to press our current lenders for better conditions."
For more information on this story, check out marketwatch.com.
Additional Resources
1) Microfinance firms make tentative move into capital markets, www.marketwatch.com , February 8, 2006
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