International For-Profit Investments in Microfinance Institutions Equity

Rodríguez Monroy, Carlos and Huerga, Ángel (2013). International For-Profit Investments in Microfinance Institutions Equity. "Journal of Industrial Engineering and Management", v. 6 (n. 3); pp. 709-722. ISSN 2013-8423.


Title: International For-Profit Investments in Microfinance Institutions Equity
  • Rodríguez Monroy, Carlos
  • Huerga, Ángel
Item Type: Article
Título de Revista/Publicación: Journal of Industrial Engineering and Management
Date: 2013
Volume: 6
Freetext Keywords: Microfinance institutions, Micro-credits, Financial Institutions, Equity, Stock Exchange
Faculty: E.T.S.I. Industriales (UPM)
Department: Ingeniería de Organización, Administración de Empresas y Estadística
Creative Commons Licenses: Recognition - No derivative works - Non commercial

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Purpose: The purpose of this document is to review the funding options for Microfinance Institutions (MFIs), define the size of the holdings of international investors in MFI equity and in particular the MFIs listed in stock exchanges, analyze the characteristics of these subset of the financial world and study the stock exchange evolution of some listed MFIs amid the financial crisis. Design/methodology/approach: Since academic literature on listed MFI equity is virtually inexistent, most of the information has been obtained from the World Bank, annual accounts of the listed MFIs, stock exchanges and from equity research documents. Findings and Originality/value: Microfinance Institutions share several common characteristics that make them a resilient business and the few MFIs that are listed in stock exchanges seem to have performed better in the financial crisis. Microfinance can be considered as one of the new frontiers of the expansion of the global banking industry. Practical implications: Presently, international for-profit investors have very few ways of investing in microfinance equity. Most of the equity of the MFI equity is funded locally or thanks to the local public sector. The stock exchange listing of the MFIs should drive MFIs towards a more professional management, more transparency and better governance. Social implications: Microfinance Institutions provide credit to microenterprises in poor countries that have no other alternative sources of external capital to expand its activity. If global investors could easily invest in the listed equity of the MFIs these institutions would expand its lending books and would improve its governance, part of the population living in poor areas or with lower income could ameliorate its standard of living. Originality/value: The number of Microfinance Institutions that are professionally run like commercial banks is still scarce and even more scarce are the MFI listed in public stock exchanges. Therefore the published literature on the characteristics and performance of the listed equity of the Microfinance Institutions is extremely reduced. But microfinance assets are rapidly growing and MFIs will need to list their equity in stock exchanges to sustain this expansion.

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Item ID: 29393
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Deposited by: Memoria Investigacion
Deposited on: 17 Nov 2014 17:08
Last Modified: 17 Nov 2014 17:08
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