Review of Microfinance Investment Vehicle Market

Publication Date: 23 Oct 2006
Published by: MicroRate
Document Type: Presentation

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This presentation provides an overview of investment trends and microfinance investment vehicles available globally.

This presentation includes an overview of investment trends, composition of the portfolio, growth rate, nature of information needed etc.

The key findings of the presentation are:

• For over a decade Microfinance Investment Vehicle (MIV) has been funding the MFIs.
• 80% of MFI funding comes from domestic market sources and only 20% comes from international markets such as development agencies and foundations, NGOs funding for MFI, and MIVs.
• In the first round of study, MicroRate surveyed three kinds of MIVs - commercial MIVs, quasi-commercial MIVs and microfinance development vehicles.
• For the year 2004-2005, total asset of MIV universe grew from $1068 millions to $1485 millions, and the total MFI portfolio grew from $513 million to $ 981 million.
• Cumulative number of MIVs increased from 5 to 55 during 1955- 2005.
• Debt and equity investment dominated the portfolio composition for all three kinds of MIVs.
• 14 MIVs were included in the second round of survey. During 2003-2005, the portfolio of these MIVs grew by 76% and the total asset grew by 36%.
• Investor composition was different for each type of MIV. While private individuals dominated the commercial MIV; private institutional investors dominated the development MIV, and quasi-commercial MIV was dominated by IFIs and other public investors.
• According to the geographic investment analysis, 56% of investment was done in Latin America and Caribbean and 17% in Eastern Europe.
• There is a shift from concessionary to “Hard” funding of MIV portfolio.