Capital Markets Guide for Microfinance Institutions (MFIs)

This guide aims to provide MFI general managers, finance managers, and other decision makers with an overview of capital markets. It helps MFIs seek opportunities to tap local and international capital markets.

As capital markets in emerging economies deepen, MFIs are increasingly able to access them. This access enables MFIs to diversify funding sources, reduce foreign exchange risk, and support growth and loan product diversification through longer-term funding. In addition, capital market access increases public awareness of microfinance and MFIs, and results in MFI capacity building as they adapt to satisfy demands of the capital markets for greater transparency.

The guide provides an overview of capital markets. It includes:

• Basic insights into key capital markets players, instruments, private versus public issues, and the rating process;
• Checklist for screening investment bank or financial advisers;
• Advice on packaging the institution's success for raters and investors;
• Appendices which expand upon these core concepts and instruments.