Sustainability

There are two main rationales for investing in microfinance.

First, It can be seen as being part of integrated programme for poverty reduction for poor households. Second, it can be seen as a means of providing financially self sustainable programs that increase access to finance for large numbers of poor people.

 

Today microfinance institutions (MFIs) reach an estimated 120 million clients worldwide, with a potential target of 1.28 billion clients. However, the ongoing success of the industry is dependending on adequate and appropriate funding. In order to promote stability and expand their reach, MFIs, which have been historically funded by donor agencies, are increasingly looking toward private capital sources to meet the scale of demand. As a result, microfinance funds have evolved to assist these institutions to raise capital from individual and institutional investors.

The move to tap traditional capital markets enables socially conscious investors to engage in the global community in a way that provides tangible and lasting benefits. Microfinance investors gain the unique opportunity to earn both social and financial returns. In contrast to traditional philanthropy, investing in microfinance is a new emerging solution to economic development. It is a bottom-up, grass-roots approach that recognizes the entrepreneurial and tenacious spirit of the poorest of the poor. It is a way to build infrastructure, save lives, create role models, unlock people's potential, and ultimately push a hurting economy forward.