Research and Seminars

Microfinance and Capital Markets

Microfinance and Capital Markets: The Initial Listing/Public Offering of Four Leading Institutions
Written by: Ira W. Lieberman, Anne Anderson, Zach Grafe, Bruce Campbell, and Daniel Kopf

December 2007
This paper examines the initial public offerings (IPOs) or listings of four leading microfinance institutions (MFIs): Bank Rakyat Indonesia, Bangladesh Rural Advancement Committee, Compartamos, and Equity Bank. These institutions are well known throughout the microfinance industry for their exceptional growth, robust financial performance and their ability to scale-up their outreach to the working poor.

But most notably, each of these institutions has listed on their national stock markets within the last few years (at the time of writing) and in a couple of the cases made their offering available to international markets.

This study dissects how the capital market listing of each of these four institutions fits into the rapidly growing trend for microfinance operations to commercialize.  Each listing is then examined from a capital market perspective â�� the key feature of each listing from a technical perspective â�� and on a comparative basis, how the institutions have performed in their national markets since the listing.  Finally, the paper ponders implications for large MFIs that may wish to follow in the footsteps of these four.

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