Venture Capital for MicroFinance: Chris Brookfield (Part 7)

Chris earlier brought up Compartamos, an MFI currently operating in Mexico. It seems they have a solid customer base and a very profitable business strategy – further proof of the validity of cash-positive microfinance business models.

SM: How many loans does Compartamos have ath the moment? CB: I think they have about 600,000 customers. I have no relation with them, so I am estimating.

SM: I think, that number is from last year. Do you know their average loan size? CB: No, but they do have a $2.4 Billion market cap.

SM: Based on what you have said, it looks like India is a good market for MFIs. CB: Indian has the fastest growing MFIs in the world right now.

SM: Are there others that have the same potential as SKS? There is also management involved and you don’t see a lot of great management in the poverty sector. CB: That is for sure. That is a generally accurate observation. People have different numbers, but there are between 500 and 1,000 microfinance institutions in India. There are not many managers who are as qualified as those at SKS. That is changing though, and just in India during the last three months, there is the deal Sequoia did with SKS, plus another very large private equity firm bought a controlling stake in Share which is another microfinance bank for $25 million.

There is a clear change in perception in the marketplace in India that Microfinance represents the next big phase of community business and consumer business. Whatever bottom of the pyramid business in India, the numbers of qualified managers in the commercial sector who are interested in them, have gone up accordingly. There is a great deal of investment support.

[to be continued]

[Part 6]
[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 7 in the series : Venture Capital for MicroFinance: Chris Brookfield
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