Mobilising Investors Towards Microfinance

This paper presents an analysis of the existing trends in microfinance investment. As per the author, trends in microfinance investment can be broadly classified under risk profile and size of microfinance funds.

Some of the observations of the analysis are:

• Microfinance is moving towards greater commercialization, but it is not yet ready for true capital markets;
• If presented with the right microfinance investment fund and opportunity, private SRIs and commercial institutional investors are willing to invest;
• Subsidies and risk capital is required at the initial stage to make investment fund financially sustainable;
• Active distribution is needed;
• Investors need to focus on the risk profile.

As a conclusion, the author remarks:

• Investment funds are a collective tool to invest in a diversified pool of MFIs;
• The type and location of structure depends upon objectives of promoters and investors targeted;
• Interest of individuals in microfinance investment should be met with adequate structures.