Microfinance and Socially Responsible Investment in Latin America
This report is based on the proceedings of the Microfinance and Socially Responsible Investment Workshop. The workshop aimed to discuss the current and future role of social investment in Latin American microfinance. It assessed:
- Microfinance in Latin America and social investment in the US;
- The potential for greater flows of social investment to Latin American MFIs.
The workshop concluded that:
- Likely investors include high net worth individuals and faith-based institutions;
- Institutional money managers and SRI mutual funds face regulatory constraints and a lack of variety in the types of MFI investments currently available;
- Community investor pools are a good conduit to reach the broader social investment community.
The workshop identified the following challenges:
- Socially responsible investors are uninformed about microfinance and inexperienced in emerging markets;
- It is difficult to determine the investment vehicles that best meet the requirements of both SRIs and MFIs;
- There is a need to redefine the role of donors.
The workshop recommended the following steps for better linkage between U.S. SRIs and the Latin American MFIs:
- Improved channels of communication;
- Increased awareness-raising about MFI investment opportunities;
- Better understanding of the types of capital that SRIs can deliver to MFIs;
- Research and strategy development;
- Clearer definition of the role of donors and other non-financial actors.