“Private equity in microfinance often serves to strengthen balance sheets, not to weaken them, and the greater corporate governance requirements of such investors inevitably results in stronger organizations,” writes Justin Willmott of Dubai-based Legatum Ventures in the opening commentary of the latest issue of Microfinance Insights.

Looking for a safe haven in investments as the world economy struggles to recover, many investors have turned to the Indian microfinance sector over the past year. For instance, SKS Microfinance, India’s largest microfinance company, received US$75m in equity funding last November. Other investors such as Grassroots Capital and the UK government-backed CDC Group have invested in India-related microfinance funds with an aim to satisfy unmet demand in the country.

Private equity, leading investors say in exclusive personal interviews with Microfinance Insights, has contributed significantly to the growth of microfinance in the past three years. This issue features conversations with private equity players Sumir Chadha, Managing Director at Sequoia Capital India, and Sandstone Capital’s Founder Paresh Patel.

The IAMFI-Intellecap Microfinance Private Equity Investment Survey shows that private equity investments (of the companies surveyed) accounted for 9 per cent of the US$12bn in investments that flowed into microfinance in 2008. Complete survey results can be found in the July/Aug 2009 issue of Microfinance Insights.

Other features of Vol 13, The Role of Private Equity: Fueling the Growth of Microfinance include:
1) Private Equity in Microfinance: Some Legal (and some non-legal) Perspectives by Howard J. Finkelstein

2) To DFI or not to DFI? The Continuing Role of Development Financial Institutions in Microfinance Investments by Andre Laude of IFC Global Financial Markets

3) Maximizing Microinsurance Investment Returns: A Closer Look at Micro reinsurance and Private Equity by Alex Bernhardt of Guy Carpenter & Co.

4) The Next Frontier: Is M&A a Feasible Strategy for Expansion by Vineet Rai of Aavishkaar Venture Management Services and Intellecap

5) Into the Mainstream: How Commercial Investing Brings Clarity to the Sector – an interview with Michael Chu of Harvard Business School

Microfinance Insights publishes on a bimonthly schedule, producing 6 issues a year.  The magazine also has networks on Twitter, Facebook and LinkedIn, as well as a blog on the website
microfinanceinsights.com.

Upcoming issues of the magazine include a closer look at the Profiles of Microfinance Borrowers in Sept/Oct 2009, and an issue focusing on Innovations in Nov/Dec 2009.
About Intellecap

Intellectual Capital Advisory (Intellecap) (intellecap.net) is a social business advisory firm that incubates innovative businesses, enables capacity building, and facilitates investment initiatives in the development sector. Working in direct design, execution, as well as indirect strategic advisory roles, Intellecap seeks to create unique solutions that efficiently and effectively address development problems. Intellecap recently launched a second magazine, Beyond Profit, which looks at ideas, people and businesses in the social enterprise space.

About Microfinance Insights

Microfinance Insights is an international print magazine published by Intellecap to serve the knowledge needs of the growing microfinance sector. A comprehensive and consolidated resource, the magazine publishes diverse global voices, uncovers trends, and analyzes critical issues from economic, business and social angles. By building knowledge and bringing in new international perspectives, particularly from developing countries, the magazine has become a microfinance thought leader. It is read by over 10,000 people around the world, who attend our knowledge-building events, and participate in global responsible finance, mobile finance, and microfinance conferences.