Invisible helping hands : how can capital markets access the poor and promote entrepreneurial spirits? : an analysis of international microfinance investment potential and a proposal for securitization in a microfinance global pool

Donor grants and soft loans have been utilized by many microfinance institutions (MFIs) to support their operations. However, such grants and loans, already of limited size and availability, are becoming harder to access as the pool of global MFIs grows. Another option for MFIs is tapping international capital markets, international loan and security markets, but there are many barriers to this practice. This paper studies how MFIs and the poor who are seeking capital to foster their entrepreneurial spirits can overcome these barriers to access international capital markets and meet the growing micro finance demand. First, this paper establishes the degree of linkage between MFIs and international financial markets by reviewing the present funding condition of MFIs. It concludes that purely commercially based funding from capital markets is minimal except for some of the best managed MFIs. A huge gap exists between most other MFIs and international capital markets. Second, this palper studies the microfinance investment potential by analyzing the returns of one microfinance investment fund. It concludes that the profile of microfinance investment matches the needs of investors in capital markets.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Ueno, Daisuke, M.B.A. Massachusetts Institute of Technology

Advisor dc:contributor.advisor

• Kristin J. Forbes.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/37226

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/37226