Microfinance investment as a stand-alone category made headlines in todays Wall Street Journal. While this article probably represents the culmination of a break-out year for microfinance investment, we still have a lot of work to do. The Journal describes the investment options as small change.
Quoting from the WSJ
Small Change
Here is a sampling of microfinance investment vehicles. Several Web sites, such as www.mixmarket.org and www.microcapital.org, also list a number of investments.
INVESTMENT |
MINIMUM |
COMMENT |
Calvert Foundation Community Investment Notes www.calvertfoundation.org |
$1,000 |
Investors can earmark the notes to be invested in microfinance initiatives. Notes can earn up to 3%, depending on the note term. |
Oikocredit USA Global Community Note www.oikocredit.org |
$1,000 |
The capital raised from the notes is used to help finance various microlenders. Investors can choose returns of up to 2%. |
MicroVest I Fund www.microvestfund.com |
$100,000. Only available to accredited investors. |
Fund makes both debt and equity investments in microlenders. Equity partners can expect to earn 7% to 9% annualized returns, while debt investors might earn 4.5% to 6%. |
Accion Investments www.accion.org |
$250,000. Only available to accredited investors. |
Makes equity investments in microlenders and expects to generate about 8% to 10% annual returns. |
Grameen Foundation USA Growth Guarantees www.gfusa.org |
$1 million minimum letter of credit. |
Guarantors do not contribute any money or get an upfront charitable deduction. Instead, they provide letters of credit which help guarantee loans by the lenders in developing countries. |
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