Investment Readiness

Does your microfinance institution want to raise capital from international investors?

There are many sources of international capital. Some are focused on profit and others have social objectives. All want to achieve their objectives by means of successful investments.

What do investors look for?

• With 10,000 microfinance institutions in the world, how can an MFI attract investment?
• Do investors want to see profits or service to the poor?
• How does an MFI negotiate the cost and other terms of an investment with investors?
• How can an MFI improve its governance practices in order to meet the standards of international investors? What is the due diligence process and how can the management of the MFI prepare for it?
• How does an MFI retain the goals and values of its founder when it brings new investors into the ownership and management of the MFI?
• How is the valuation of a microfinance institution determined?
• How does an MFI measure and monitor financial risk associated with different investors whose capital has different maturities, costs, and currencies?

MEDA can answer these questions and many more

MEDA offers capital-raising services through training and technical assistance to the senior management of the MFI—both board and staff—so that they can identify, attract and negotiate with investors.

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CASE STUDY: CAPITAL ATTRACTION IN MICROFINANCE
CFA was founded in 1992 through donor support from Jasmine Community Foundation (JCF), a well-respected NGO in that region of Atlantis. JCF was interested in improving the economy of the region with a particular goal of improving incomes for those employed in the informal sector. During its early years, CFA experimented with different loan types but was not able to stop losing money. Ahmad was recruited from a nearby MFI because of his reputation for control of credit risk. Under Ahmad’s leadership CFA reduced its PAR and operating expenses and became profitable in 2000. But now, Ahmad has a problem. Right now he does not know how serious it is. He recognizes that he must devote significant attention to the issues and possible develop some alternatives. Read more...

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MEDA's Investment Readiness Services include:

• Identification of the strengths and weaknesses of your institution from the point of view of the investors.
• Advice in the development of a business plan, the document preferred by investors.
• Determination of the cost and terms of an investment that is most desirable for your institution.
• Development of a strategy for attracting investors that are more likely to be interested in your institution.
• Support during the search for appropriate investors.
• Assistance in negotiation of terms with investors that are consistent with the long term growth of the institution.
• Knowledge of practices and new developments in the microfinance capital markets.

Download brochure – English (PDF 226 KB) • Download brochure – Spanish (PDF 231 KB)