Universe of Microfinance FundsThere are currently about 80 microfinance investment funds in existence, with more launching each year. While most funds offer debt instruments to investors, and in turn, provide debt or guarantees to microfinance institutions (MFIs), a minority of funds focus on equity investment.Funds have a variety of investment strategies and management styles. The most significant differentiator is whether a fund makes debt investments or whether it invests in equity. Other important differences relate to geographic focus and whether a manager is based within the target region or country close to the MFIs, or in the U.S. or Europe, closer to investors. Some funds target relatively mature and established MFIs; others focus on smaller and younger institutions/start-ups. Yet others concentrate their efforts on serving challenging clients, such as small farmers, or clients in regions with poorly developed financial infrastructure, communications, and lower population density. Gray Ghost is familiar with the universe of microfinance funds — we even invest in some of them. As part of our commitment to help other interested investors learn more about microfinance, our team is always willing to share our industry experience and awareness and, if requested, make introductions to our fund relationships. |
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