Does Commercial Microfinance Belong to the Financial Sector? Lessons from the Stock Market
48 Pages Posted: 19 May 2017
Date Written: October 1, 2014
This paper is the first to draw a global picture of worldwide microfinance equity by taking full advantage of daily quoted prices. We revisit previous findings showing that investors should consider microfinance as a self-standing sector. Our results are threefold. First, microfinance has become less risky and more closely correlated with the financial sector. This convergence might be followed by a decline in the proportion of women borrowers. Second, microfinance and finance shares have equivalent currency exposure. Last, introducing a self-standing microfinance sector presents few diversification benefits. This paper confirms that microfinance has changed dramatically during the last decade.
Keywords: Microfinance, South Africa, Kenya, Indonesia, Bangladesh, Mexico
JEL Classification: G11, G15, O16, C58, G21
Suggested Citation: Suggested Citation