Integrating Social Performance Measurement and Microfinance Investment

Many socially-minded investors believe that integrating social performance into the investment process can help preserve the character of double-bottom line institutions. For Grassroots Capital, social and financial performance, rather than distinct or conflicting goals, are intertwined into the company’s day-to-day activities. In fact, they have created their own framework for evaluating the social impact of current and potential investee MFIs.

Grassroots Capital 2009 Global Economic Crisis Impact Report

The primary drivers of the investment case for microfinance are the reliability and individuality of microfinance clients, the low correlation with the formal economy exhibited by microfinance performance, and the high growth of MFIs. While these attributes will be threatened by the global crisis, strong microfinance institutions are capable of managing risks and emerging with solid fundamentals.

Major Characteristics and Future Trends of the Microfinance Market in Nicaragua.

How will the market of microfinance suppliers evolve? Who will be the major stakeholders? Are mergers, alliances or acquisitions possible?

Nicaragua makes an excellent case study for understanding the competitive implications of a microfinance market with high market penetration and for understanding how the different suppliers act in the market. The major findings and key aspects are detailed in this paper.

An Overview of Current Trends and Issues

The microfinance industry is growing rapidly, both in clients served and the volume and types of investment it attracts. This overview provides a brief summary of available information on the industry to help prospective investors orient themselves within the market, and further refine their expectations with respect to financial and social returns.

An Examination of Subsidy, Control, Growth, and Liquidity for Investors

The note draws on two sources: the 30 year experience of Shorebank Corporation, the oldest and largest community development bank in the U.S., and the results of a study of Liquidity for Investors in Community Development Finance Institutions, executed by Shorebank for the Ford Foundation in 1999-2001.

ProFund Plays a Unique Role in Integrating Microfinance into the Financial System

ProFund has served as a focal point in the maturation of the Latin America microfinance sector. ProFund has creatively and flexibly developed a number of sophisticated approaches to creating and supporting MFIs in such areas as mergers, bank collaborations, special purpose initiatives, and liquidity support which provide a roadmap for the initiatives that will continue to be necessary in the future.