Microfinance Needs Scalable and Sustainable Growth

Microfinance Focus, June 24, 2010: Concluding the Microfinance Cracking the Capital Market Conference in New Delhi, its organizers briefed the audience about the ideas that emerged from the conference. Monica Brand of ACCION said, “I think microfinance is in some senses is constrained by factors which made it a success. As equity investors we invest in people, and we look for social passion and the passion to succeed. There is a lot more to do here in India, and I come away with a measured optimism about this perfect storm of successful entrepreneurs, professional management team and dynamic growth, but it has to move beyond good planning model to capitalize on the assets of the industry.”

Royston Braganza of Grameen Capital India said, “For me the key concerns are about how we can fund this growth and achieve scalability and sustainability. Essentially, we should see that what we are doing as an industry does not hurt the sector. We must ensure that the industry has enough capital to meet the immediate needs of growth. So there is immediate cause for us to come together and discuss the challenges that we need to overcome in the near future. We need to find a mechanism that can help us to make a definite next step. It is not all about tier 1 or 2 MFIs, but it’s also about getting the lower tier MFIs to cater to the market.”

The concluding remark came from Robert Annibale who said, “We’ve talked about risk, something that is importantly conveyed by analysts very closely. This industry comprises of a wide range of institutions with various missions, and not all are going to become huge. But they have a common need, which is for capital to spur growth. Specialized funds have been very important catalysts. I am generally very optimistic with what we’ve discussed about risks, valuations, consolidations over the time of this conference.”

© 2010, Microfinance News. All rights reserved. 2008-09