Mexico's Compartamos held a $407 million initial public offering in April 2007-- the first time a microlender received so much attention from mainstream, profit-maximizing institutional investors.
Compartamos is one of Latin America’s largest microfinance institutions with more than 600,000 borrowers who receive loans as low as $100, and is en route to even bigger growth after going public with help from Citigroup’s Mexican affiliate. Reaching that point took much investment and technical assistance from international financial and development institutions, including IFC and the specialized global microfinance organization, Consultative Group to Assist the Poor (CGAP).
Calling access to financial services one of the most powerful boosters of development, CGAP Director Elizabeth Littlefield said:
“Microfinance used to be seen as charming methodology that worked—an endearing niche of the development world with enterprising women hard at work with sewing machines or fruit stands. But ministers of finance around the world are starting to understand that access to finance for the poor is much more than that,” she said. “It’s about building efficient and equitable financial systems that serve the majority of the population—the electorate—in their countries.”
Littlefield also warned that “the two worlds of profit and development are now starting to collide in microfinance, creating both conflict and opportunities” and said there would be “a very strong ongoing role for both IFC and CGAP in navigating these conflicts."
IFC is one of the longest-standing, most active investors and advisors in commercial microfinance, with a global portfolio that now exceeds $500 million. As of end 2006, IFC's microfinance activities had reached roughly 3.5 million micro-entrepreneurs in emerging markets.
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