Microfinance
The Microfinance Asset Class

MicroRate Research ... The State of Microfinance Investment 2012: MicroRate’s 7th annual survey and analysis of MIVs

Burgess COMMENTARY

Peter Burgess

The State of Microfinance Investment 2012: MicroRate’s 7th annual survey and analysis of MIVs

In this report, The State of Microfinance Investment 2012: MicroRate’s 7th annual survey and analysis of MIVs, MicroRate finds that microfinance investment vehicles (MIVs) have settled into a lower level of growth. The key findings of the report include:

• MIV total asset growth settled into a “new normal” at 11% during 2011 (2010: 12%, 2012 forecast: 14%).
• Record year for investor redemptions and fund maturities, however growth at existing and new funds resulted in a net inflow.
• Latin America had the largest share of growth, but the pace of growth was faster in East Asia and the Pacific and Africa.
• Continuing shift from debt to equity; increase in non-microfinance investment (e.g. housing, fair trade).
• Institutional investors’ demands show increasing importance of financial performance.

Release of 2012 MIV Survey – growth stabilizes in spite of lower rates and investor redemptions (October 2012)

Posted on Tuesday October 16th, 2012

Washington D.C., October 16, 2012 – Today MicroRate released The State of Microfinance Investment 2012, which finds that microfinance investment has stabilized into a lower growth rate following the global financial crisis.

According to Sebastian von Stauffenberg, CEO of MicroRate, “the findings from this year’s study show how the microfinance investment market is maturing and settling into a more sustainable rate of growth. This growth, in spite of record-setting redemptions, shows the resilience of these funds within the impact investment asset class.”

This report, which is MicroRate’s 7th annual survey of microfinance investment vehicles (MIVs), is based on interviews with MIV managers and a survey of the 102 active MIVs with total assets under management estimated at $7.5 billion as of December 2011. Of this universe, MicroRate received data on 85 funds, covering 93% of global MIV assets.

The key findings of the report include:

• MIV total asset growth settled into a “new normal” at 11% during 2011 (2010: 12%, 2012 forecast: 14%).
• Record year for investor redemptions and fund maturities, however growth at existing and new funds resulted in a net inflow.
• Liquidity levels stabilized as excess cash from 2009 was reinvested in 2010.
• MFI demand returned, though with large regional and country differences.
• Latin America had the largest share of growth, but the pace of growth was faster in East Asia and the Pacific and Africa.
• Continuing shift from debt to equity; increase in non-microfinance investment (e.g. housing, fair trade).
• Institutional investors’ demands show increasing importance of financial performance.