Discovering Limits. Global Microfinance Valuation Survey 2011

29 Pages Posted: 2 Sep 2015  

Frederic de Mariz

Columbia University

Xavier Reille

World Bank - Consultative Group to Assist the Poor (CGAP)

Daniel Rozas

World Bank - Consultative Group to Assist the Poor (CGAP)

Date Written: July 14, 2011

Abstract

This report is the result of a partnership between CGAP (Consultative Group to Assist the Poor) and J.P. Morgan with the support of the Council of Microfinance Equity Funds (CMEF). It combines CGAP and CMEF knowledge of microfinance with J.P. Morgan’s equity research skills in emerging markets. This is the third edition in a series begun in 2009. Our objective is to provide benchmarks for valuation of microfinance equity, both private and publicly listed, drawing on two data sets: a sample of 238 private equity transactions between 2005 and 2010 (compared to 200 transactions in last year’s edition of the report), which represents the largest such data set gathered to date, and data on 11 publicly traded lower income financial institutions (LIFIs).

This year’s edition is entitled “Discovering Limits” as the recent experience of unsustainable growth, and the risk of client over-indebtedness in several countries, has given the sector a better appreciation of the limits of growth. Microfinance valuations in the public and private markets are starting to converge with those of traditional financial institutions. Despite a challenging environment, the equity market remained vibrant in 2010 with US$205mn in private equity investments captured by our survey. Latin America and the Caribbean represented the largest share of investments, with 56% of the total transaction value in 2010. Equity prices continue to be supported by a broad base of public and private investors with a long-term commitment to the asset class.

Keywords: Microfinance, Valuation, Private Equity, Emerging Markets

Suggested Citation

de Mariz, Frederic and Reille, Xavier and Rozas, Daniel, Discovering Limits. Global Microfinance Valuation Survey 2011 (July 14, 2011). Available at SSRN: https://ssrn.com/abstract=2654041 or http://dx.doi.org/10.2139/ssrn.2654041

Frederic De Mariz (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Xavier Reille

World Bank - Consultative Group to Assist the Poor (CGAP) ( email )

1818 H St NW
Washington, DC
United States

Daniel Rozas

World Bank - Consultative Group to Assist the Poor (CGAP) ( email )

1818 H St NW
Washington, DC
United States

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