Evaluation of ProFund

This paper describes the performance evaluation of the ProFund conducted in December, 2001.

The authors evaluate ProFund on the following parameters:

• Overall Accomplishments:
  • PRoFund has served as a focal point in the maturity of the Latin America microfinance sector;
  • ProFund has creatively and flexibly developed a number of sophisticated approaches to creating and supporting microfinance institutions (MFIs) in areas of mergers, bank collaborations and liquidity support.
• Portfolio:
  • ProFund has invested in larger, more mature Latin American institutions;
  • There is no evidence of the investees discouraging new entrants;
  • ProFund institutions are more efficient and productive than the industry as a whole.
• Execution of business plan:
  • The original business plan was a bit over ambitious and over simplistic. However, ProFund has achieved the key objective to sharpen and consolidate the identity of the microfinance industry;
  • ProFund was unsuccessful in engaging dedicated Small and Micro Enterprise (SME) institutions, as that requires its own focused resources and expertise.

The paper concludes that players like ProFund are required in the industry as:

• The end market for development finance remains significantly underserved;
• The sector will continue to need agile, engaged and sophisticated governance and advisory support.