A wide range of development agencies, philanthropies, and private investors, have committed billions of dollars in a global effort to advance financial inclusion. Public funders, which include multilateral organizations, bilateral agencies and development financial institutions (DFIs), offer a range of funding instruments such as grants, investments, and support in the form of technical assistance. Public funders support financial inclusion as a means to reach development outcomes, such as the Sustainable Development Goals. For private investors, the incentive is the return on investment, whether financial, social, or both. Investments are made using debt, equity, or guarantees and are typically directed to refinancing and strengthening the capacity of financial service providers, improving market infrastructure, and refining the regulatory environment.
Today, microfinance is one of the most advanced asset classes within the impact investing sphere. A diverse range of microfinance investment vehicles (MIVs) channel funding from investors to financial services providers, and increasingly, other types of business models that provide financial services for the poor. By the end of 2018, assets under management of MIVs were about $16.9 billion. While MIVs need to generate financial returns, asset managers have developed social and environmental metrics to measure the impact of their investments and are increasingly integrating sustainability and social responsibility norms into decision-making and monitoring processes and practices.
Many funders are now diversifying their investments to include not just microfinance institutions, but also other players in the market who are working on digital financial services, agent networks, and other market infrastructure initiatives.
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Jean-Marc Debricon of Alterfin discusses impact investing in rural Africa as the region prepares for African Microfinance Week. Held in Burkina Faso from 21 to 25 October 2019, this major regional conference provides a unified African platform for discussion of microfinance issues.
Ahead of the 7th Annual Central Asian & Caucasus Microfinance Forum, Margot Jacobs, Senior Advisor on the private equity team at East Capital, shares tips for MFIs on becoming more attractive for investors.
Based on workshops with nearly 300 participants from 30 countries, this COVID-19 Briefing contains insights for creditors and debtors on ways to effectively manage debt restructuring talks, brought on by the COVID-19 crisis.
News & Events
The latest news and upcoming events and training from the global financial inclusion community on this topic.