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On behalf of the Board and Staff of the International Association of Microfinance Investors (IAMFI), I am delighted to share IAMFI’s inaugural e-Newsletter with you. There’s much to report: since its official launch in January 2008, IAMFI has made great strides towards its mission to help commercially oriented microfinance investors, especially Limited Partners investing through funds, achieve their goals by offering objective industry information, facilitating dialogue and working to improve the global environment for microfinance.
IAMFI News
IAMFI’s launch year has progressed with tremendous support from the microfinance sector and continues to move forward with exciting developments taking place every day.
IAMFI owes its start to an industry-wide Working Group of leading microfinance representatives who first convened in October 2006 to address the needs of the growing number of market-driven microfinance investors and investment vehicles. The Working Group included Ann Miles (BlueOrchard Finance), Elizabeth and Steven Funk (Dignity Fund and Unitus), Steve Hardgrave (formerly of Omidyar Network, now of Gray Ghost Ventures), Sam Moss (Gray Matters Capital), Sandra Darville and Tomás Miller (Inter-American Development Bank), Gil Crawford (MicroVest), Ian Callaghan (formerly of Morgan Stanley, currently of Omidyar Network) and Crystal Hutter (Omidyar Network). Collaborating throughout 2007, they laid the strategic foundation for an investor-led, global association whose vision is to meet commercially oriented investors’ needs, thereby generating sustainable capital flows from private sector sources to expand access to financial services for the world’s unbanked poor.
Seed capital donors DOEN Foundation of Amsterdam, the Netherlands, Gray Matters Capital of Atlanta, GA, USA and Omidyar Network of Redwood City, CA, USA provided funding for IAMFI’s launch. They have been joined thus far by generous Founding Members Plainfield Asset Management, TIAA-CREF and Triodos Investment Management BV, and by Charter Members BlueOrchard Finance, Greg Casagrande (SPBD Microfinance and MicroDreams), J.P.Morgan, MEDA Investments, Morgan Stanley, Omidyar-Tufts Microfinance Fund and a private investor. For more information on membership, please visit the Membership section on IAMFI’s web site.
The web site, www.iamfi.com, is now live, offering investors instant access to the latest industry news, research and events about microfinance and microfinance investing. IAMFI reviews third party content for relevance and accuracy so that investors may evaluate information more efficiently. The home page offers a daily newsfeed of online articles related to microfinance investing, and we are adding new content and functionality every two weeks, so please bookmark the site and visit it regularly. Phase II of the web site will offer additional member advantages, such as a password-protected “Members Only” section to disseminate proprietary information, a Member Directory, an online forum for sharing investor insights, and more.
IAMFI has conducted its inaugural research piece on MFI commercial debt default, evaluating the incidence of default by MFIs to MIVs. The findings, which will be available exclusively to IAMFI members this fall, will help investors gain greater understanding of the causes and effects of debt default and restructurings, and learn how non- and late payments affect investment performance. IAMFI contracted Julie Abrams of Microfinance Analytics to undertake the study. We are happy to announce that Julie has accepted a part-time advisory role with IAMFI to support our research and analysis activities. IAMFI will launch its comprehensive research program in 2009.
The organization has been busy participating in conferences around the world, engaging with prospective members and developing resources needed specifically by commercially oriented investors to meet their goals. Highlights of recent events include IAMFI’s presentation to the Atlanta Chapter of Women Advancing Microfinance in May on balancing financial and social returns, IAMFI Board’s conference panel and Microfinance Investors Reception San Francisco in July (see Spotlight On… section), and the IAMFI – Fitch Ratings Investor Teleconference for members in August, in which Fitch Ratings’ microfinance specialists presented their recent publications followed by a lively Q&A session. IAMFI’s upcoming events include, among others, a foreign currency Webinar in November. We will provide details on these events in the coming weeks.
The Board and Staff of IAMFI extend their thanks to countless colleagues in microfinance who have contributed to IAMFI’s development during the association’s first year.
Spotlight on… IAMFI’s West Coast Debut
In July, IAMFI organized two investor-focused activities to support the interests of San Francisco-based microfinance investors, in acknowledgement of the Bay area’s concentration of socially responsible investors, venture capitalists and private equity investors. These financial sector participants are playing a growing role in commercial microfinance investment.
IAMFI Board member Terri Lecamp participates on IAMFI’s Advancing Microfinance for Market-Driven Investors panel
Advancing Microfinance for Market-Driven Investors
Members of IAMFI’s Board presented a panel entitled "Advancing Microfinance for Market-Driven Investors" at the Microfinance West conference hosted by Financial Research Associates and the Silicon Valley Microfinance Network. Executive Director Joan Trant moderated the panel, comprised of Tryfan Evans (Omidyar-Tufts Microfinance Fund), Terri Lecamp (Plainfield Asset Management), Ann Miles (BlueOrchard Finance USA) and Sam Moss (Gray Matters Capital). This was the conference’s only panel fully comprised of investors discussing microfinance investment from their unique perspective, in contrast to the more prevalent presence of donors, microfinance networks, microfinance institutions and industry service providers. In this sense IAMFI achieved two of its key goals on behalf of its membership: to represent investor views and to foster dialogue among all industry participants.
IAMFI panelists shared their thoughts on investing and on key microfinance issues impacting the flow of private sector funds to investment vehicles and in turn to microfinance institutions, using the following outline to guide the session.
Views on Microfinance Investment in the Current Environment (T. Lecamp and T. Evans)
In addition to the challenges inherent in a nascent asset class, emerging market nations, microfinance institutions and their customers are subject to the broader economic unease due to:
- Inflation
- Interest rates
- Reduced debt options
- Energy and food prices
What concerns do Limited Partner investors have in light of the current challenges? What is compelling about microfinance despite these issues?
Common Questions Investors Ask (A. Miles)
Investors increasingly seek to commit assets to microfinance but investment decisions are hindered by a lack of information and transparency. What are Limited Partner investors’ top questions and concerns as they evaluate investing in microfinance?
Some Examples of How Investors Mitigate Risks
Several microfinance investment vehicles and industry service providers are developing tools to help investors reduce risk. What are some of these tools and what may investors look forward to as the microfinance sector evolves?
- Liquidity (S. Moss, A. Miles)
- Antares Fund
- Dexia Fund
- Transparency (T. Evans, A. Miles)
- Fund evaluation methodologies and valuation
- CGAP fund disclosure benchmarks, LuxFLAG, et.al.
- Reputational Risk [if time permits] (T. Lecamp, S. Moss)
- Sample investors’ approach to balancing financial and social returns
- IAMFI efforts to focus impact measurement on industry-strengthening indicators
Joan Trant, IAMFI Executive Director, welcomes guests to the Omidyar Network - IAMFI Microfinance Investors Reception
Microfinance Investors Reception
Following the conference, IAMFI and Omidyar Network co-hosted a Microfinance Investors Reception for 130 members and guests at one of San Francisco’s top venues, McCormick and Kuleto’s, overlooking Alcatraz and the Bay. The Reception offered conference attendees and Bay area investors the chance to network. By all accounts, the Reception was a tremendous success, garnering the following tributes from attendees:
"What a great event - there's a real buzz in the room!"
"The reception was the best part of the two days. I met new people who were investors, not just the usual suspects."
"My organization (a family office) had looked into microfinance as an investment option a few years ago but didn't see any opportunities that would fit our strategy. I met two investment managers this evening that I look forward to following up with."
IAMFI is grateful to co-host Omidyar Network for underwriting the event and providing on-the-ground support.
Upcoming Microfinance Events
IAMFI compiles and updates a list of all microfinance conferences worldwide and selects those that may be of interest to investors for its Industry Events Calendar. The following extract describes events taking place during the last quarter of 2009.
IAMFI highlights two events in particular. Building Fair Financial Markets for All, hosted by World Microfinance Forum Geneva (WMFG), will offer sessions that address commercially oriented investors’ interests. Industry thought leaders will present research on the conference topics and practitioners will illustrate the concepts applied to the marketplace. Joan Trant, Executive Director of IAMFI, will moderate a panel on fixed income that provides an updated overview of the microfinance sector and presents new research on correlation of microfinance investment to other asset classes.
Social Capital Markets 2008 will convene an array of social investors and social entrepreneurs to “accelerate the flow of capital to good.” IAMFI members and contacts will receive a 30% discount on the conference fee by typing "IAMFI" in the discount code section when registering on SoCap08’s web site.
Building Fair Financial Markets for All
Date: October 1-2, 2008
Location: Geneva, Switzerland
Host: World Microfinance Forum Geneva
Website
IDB Microfinance Forum 2008
Date: October 8-10, 2008
Location: Asunción, Paraguay
Host: Inter-American Development Bank
Website
Social Capital Markets 2008
Date: October 13-16, 2008
Location: San Francisco, CA
Host: Xigi Media and Good Capital
Website
Powering Connections Annual Conference
Date: November 4-11, 2008
Location: Arlington, VA
Host: Small Enterprise Education and Promotion (SEEP)
Website
Microinsurance Conference 2008
Date: November 5-7, 2008
Location: Cartagena, Colombia
Host: CGAP Working Group on Microinsurance and the Munich Re Foundation with the support of FASECOLDA
Website
IAMFI FX Webinar
Date: November 2008
Location: Online
Host: International Association of Microfinance Investors
Website
©Copyright 2008 International Association of Microfinance Investors.