The Implications of Increased Commercialization of the Microfinance Industry: What Can We Learn from the Discussions that Followed the Compartamos IPO?

This paper seeks to pull together and distill the diverse arguments and positions that were articulated regarding the Compartamos IPO, which is one of the most significant events to happen in microfinance. It also raises a number of significant issues regarding the commercialization of microfinance, and the appropriate balance between the dual goals of providing fairly priced financial services to the poor and seeking profitability for the owners of microfinance institutions. This paper summarizes publicly held discussions and public documents that took place after the IPO. Structured to give a fair presentation of all points of view, it is divided into two parts:

• Part I provides the background information on Compartamos IPO, and summarizes industry discussion and articles appearing in the media;
• Part II goes beyond the specifics of the IPO, and addresses the broader implications of commercializing microfinance.

In conclusion, the paper states that the microfinance industry is entering a new phase in its life cycle, and the implications of this change have not yet been fully analyzed or articulated.