Commercialization
3 important questions on Commercialization
What change can be seen in the last decade at MFIs
From microcredit to microfinance
Use of ATMs, online banking
Rapid change of funding situation, now capital market funding important
Use of ATMs, online banking
Rapid change of funding situation, now capital market funding important
Why is MF interesting for international investors?
• Increased attention given to socially responsible entrepreneurship
• Potential size of the microfinance market is very big
• High returns on microfinance lending
• Low default rates on microfinance lending
• Microloans may be uncorrelated with returns from other asset classes / macroeconomic shocks
• Potential size of the microfinance market is very big
• High returns on microfinance lending
• Low default rates on microfinance lending
• Microloans may be uncorrelated with returns from other asset classes / macroeconomic shocks
Prudential regulation and MFIs
Insolvency of MFIs probably does not affect stability of the entire banking system: prudential regulation, aimed at protecting the financial system as a whole is NOT needed
› However, prudential regulation in the form of protecting safety of small deposits is important
› However, prudential regulation in the form of protecting safety of small deposits is important
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