Microfinance Gateway>Who Will Buy Our Paper: Microfinance Cracking the Capital Markets? The Realities of Linking Microfinance to Local and International Capital Markets

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Library » Who Will Buy Our Paper: Microfinance Cracking the Capital Markets? The Realities of Linking Microfinance to Local and International Capital Markets

Who Will Buy Our Paper: Microfinance Cracking the Capital Markets? The Realities of Linking Microfinance to Local and International Capital Markets
2006, Reddy, R. & Rhyne, E.

Insights from "Who Will Buy Our Paper?" conference held in New York in February 2006.

This Insight, by Rekha Reddy and Elisabeth Rhyne, is based on speeches and presentations from the conference hosted by ACCION International, Corporación Andina de Fomento (CAF) and Deutsche Bank, together with partner Developing World Markets.

The document discusses the main themes of the conference:

Describes successful cases of debt and equity financing in microfinance, at both the local and international levels;
Discusses constraints and opportunities for the microfinance industry as it continues to move towards the capital markets.

The paper talks about the following in detail:

Categories of investments in microfinance;
Experiences of mainstream rating agencies with microfinance evaluations;
Cases of successful bond issuance in domestic capital markets;
Tapping of the international debt markets;
The challenges that remain to make microfinance investment an asset class;
The direction in which microfinance sector is envisioned to move in the future.

Finally, the document concludes with the observations made from the experiences presented at the conference:

The main sphere of activity in microfinance occurs in local markets;
Investments in local markets may need initial credit enhancements to make local investors familiar with microfinance;
International investments have proved to be more difficult;
The microfinance industry still has many constraints to overcome before it is to take its place as a true asset class;
Socially responsible investors will smooth the way to mainstream investment, absorbing many of the costs of building the industry.

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Publisher(s):
ACCION International