Book event: Microfinance for Bankers and Investors

Yesterday I attended a book event with Elisabeth Rhyne about her new book, Microfinance for Bankers and Investors: Understanding the Opportunities and Challenges at the Bottom of the Pyramid. I used to work with Beth at ACCION International so I was excited to hear more about her latest publication. Unlike prior books, this one is focused on appealing to the private sector and is a “guidebook” for entering the microfinance market.

Beth spoke about three things she tried to do with this book:
1. Demonstrate there is a market opportunity at the bottom of the pyramid
2. Prove that it is possible by showcasing businesses that are successfully doing microfinance
3. Provide a roadmap for private sector players to enter the market

The book includes 16 case studies that show successful businesses doing microfinance. Interestingly, the case studies include a range of players, not just banks, including:
– Non-traditional players like Vodafone (mobile banking in Kenya) and Banco Azteca (retailer in Mexico)
– Industry developers like Visa and Creditinfo (credit bureau in Kazakhstan)
– Financiers like Credit Suisse (IPO of Compartamos) and Sequoia Capital (investment in SKS)

Beth ended the talk by sharing her outlook on the private sector in microfinace:
– The good: Private sector players have technology, distribution networks, and financial resources to scale financial inclusion
– The bad: Private sector players don’t understand the informal sector, often have have a shallow commitment because they are focused on short-term profit versus long-term market building, and can lead to consumer protection vulnerabilities

Check out the book, and endorse the Campaign for Client Protection.