You are currently browsing the tag archive for the ‘Council of Microfinance Equity Funds’ tag.
> Posted by Danielle Donza
The Council of Microfinance Equity Funds (CMEF) and MicroFinance Network (MFN) recently surveyed their members to find out whether MFIs are paying the people who sit on MFI boards– and if so, how much.
Some observers argue that the practice of offering payment to board members will ultimately attract members with the wrong motivations. They believe that the “right” board members are willing to serve on the board for free because of their passion for the microfinance mission. In fact, this is often true: many MFIs don’t pay their board members at all – 40 percent and 25 percent, for CMEF and MFN respectively.
However, as the microfinance industry matures, and the responsibilities of governance increase, MFIs need to be prepared to compensate their directors in order to attract highly qualified board members with the knowledge to govern a financial institution well. So, it is not surprising that among those MFIs linked to CMEF and MFN the majority do provide monetary compensation. Read the rest of this entry »
> Posted by Danielle Donza
For publically traded retail banks, valuations are at historic lows. In the microfinance industry, 2011 also saw the continued compression of valuation multiples from 2009 highs, according to the recently released Global Microfinance Equity Valuation Survey, Volume Growth and Valuation Contraction. CGAP and J.P. Morgan, with support from the Council of Microfinance Equity Funds (CMEF), publish this report annually to address the scarcity of valuation data available in the public domain.
Including valuation data for both MFI private equity (PE) transactions as well as Lower Income Finance Institutions (LIFIs), which are publically listed companies providing financial services to lower-income clients, but not necessarily having a stated social mission, this report aims to provide benchmarks for the valuation of both private and publicly listed microfinance equity, promote market transparency and identify industry trends.
This year the survey finds a “wider trend where LIFI and microfinance valuations in the public and private markets are beginning to converge toward those of traditional financial institutions in emerging markets, and are probably closer to their true value.” Read the rest of this entry »
> Posted by Stephanie Dolan, Principal Specialist, Investing in Inclusive Finance
How do you recognize or quantify the time and effort that a non-profit’s founder has poured into an organization? Do you reward a non-profit’s board members for their countless hours donated to shaping the institution’s mission, and if so, how? What role does the staff have in determining the success of an organization? What skills and qualities are necessary in a manager, and what should be done if his skills set no longer meets the needs of an institution?
Such questions normally circulate beneath the surface at any operating non-profit. However, they truly come to light during periods of institutional transition, for example, during transformation to a for-profit or a merger of organizations. As these questions are often intensely personal, they have the potential to become, on the one hand, a bitter point of contention or, on the other, an opportunity for frank discussion and collaboration. Read the rest of this entry »
> Posted by Center Staff
The Council of Microfinance Equity Funds (CMEF) recently responded to the Reserve Bank of India’s invitation to comment on the Malegam Committee Report.
Sixteen members of CMEF, which brings together the leading private entities that make equity investments in MFIs in the developing world, have invested Rs. 8.1 billion (813 crores; US$178 million) of equity in Indian microfinance institutions, and other members are in negotiations with potential investee institutions. As direct investors in MFIs, CMEF members place great importance on their corporate governance role as board directors, shareholders and guardians of the double bottom line.
The CMEF concern is that “Although implementation of many of the proposed recommendations would indeed add to a sustainable development of the sector — through the enhanced institutionalization of transparency in pricing, client protection and corporate governance — it is our opinion that several recommendations could seriously set back the clock for microfinance in India.” Read the rest of this entry »
> Posted by Center Staff
The Microfinance Banana Skins report, now in its third year, reflects changing perceptions of risk in a dynamic and fast-moving industry. This year’s report shows that microfinance has come of age, and with that, new issues have arisen. In an increasing number of markets, the rapid rate of growth and outreach means that microfinance is confronting the same forces of competition, credit cycles, and consolidation seen in other sectors.
This survey explores the risks facing the microfinance industry at a time when hard questions are being asked about its future, prompted by growing doubts about its effectiveness as a source of small-scale finance for the poor.
One of the respondents summed up the significance of these doubts, saying they could “dissipate the fairy dust that has historically coated everything related to microfinance.” Many of the risks explored in this report reach the heart of the debate about where microfinance goes next. Read the rest of this entry »
Facebook
Twitter
Recent Comments