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State of Microfinance Investment: The MicroRate 2010 MIV Survey

Analyzing investment trends in microfinance
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This fifth annual survey from MicroRate examines microfinance investment vehicles (MIVs), which mobilize investments in rich countries and channel them to MFIs in the developing world.

The attractiveness of the microfinance industry’s social mission and strong MFI performance fuelled growth of MIVs over the last five years. Total MIV assets grew 22% in 2009 to over USD 6 billion. This was the lowest growth rate since MicroRate began tracking MIVs in 2007. Survey findings include:

  • Asset base has shifted from small MIVs to large ones over the last four years;
  • MFIs have preferred to borrow from low-rate local funds rather than MIVs since 2009;
  • Investor demand remained strong in 2009;
  • MIVs raised more money from investors than they were able to place with MFIs.

Finally, MIVs have built up unsustainable levels of liquidity and are now under pressure to relax their lending standards to reduce liquidity. MicroRate believes that the current cooling off period would help MIVs strengthen their operations and products. It is likely that, in 2010, the industry will continue to grow, at a slower, more sustainable pace than in the past.