Microfinance and Capital Markets: The Initial Listing/Public Offering of Four Leading Instiutions
This paper analyzes the initial public offerings and listings of four microfinance institutions - Bank Rakyat Indonesia in Indonesia, Bangladesh Rural Advancement Committee in Bangladesh, Compartamos in Mexico, and Equity Bank in Kenya. These institutions have exhibited exceptional growth, robust financial performance, and the ability to scale-up their outreach to the working poor. They have been listed on their national stock markets, and a couple of them have made their offering available to international institutional investors as well. The paper examines:
- Rapidly growing trend of commercialization of microfinance operations of scale;
- Growth and development of these MFIs, their operational and financial performance leading up to the capital market listing;
- Listings from a capital market and technical perspective, and on a comparative basis.
The paper also discusses some insights for large commercial MFIs that may wish to follow a similar route to growth. It also attempts to reach some conclusions about the implications of these listings for the microfinance industry.
