Microfinance as a blueprint

Joan Trant is Executive Director of the International Association of Microfinance Investors (IAMFI), a global membership organization that helps commercially oriented microfinance investors deploy capital to achieve financial and social returns. She lists the learnings of the past decades in microfinance and says “microfinance has been around for thirty years and could act as a blueprint for how to be more effective in impact investing.”

Microfinance has already achieved some successful results. First, it has proven a successful process for cross-border financing. “Most investors,” says Trant, “come from developed economies and invest in emerging economies. Microfinance can provide a platform for involving locals in investment decisions.”

Second, microfinance has highlighted the importance of partnering development investors. “Public-private investment has proved highly effective. And there is now a candid dialogue between such investors on where best the investments can be made.”

And third, MFIs must be made investor ready. “We must be attentive to investor needs and create product structures that satisfy the demands for liquidity, diversification, and deal size.”

There is, Joan Trent agrees, a difference between US and European investors. While European governments have supported social investments, US investors see a choice between an investment bucket and a charity bucket. “But with proven results and with better structures in place for creating liquidity, we will be able to grow the impact investment activities in the United States.”

This interview was recorded during TBLI Conference Europe 2011, held in London, November 2011, organized by the TBLI Group.

This article may be reproduced according to our terms of use with attribution (and link, if online) to fsinsight.org. To be cited as: “Microfinance as a blueprint”, Joan Trant, fsinsight.org, December 13, 2011.