Here are two of the enterprises Prof Bugg-Levine mentioned in class:
Nuru Lights
and One Earth Designs.
And here's the May 2010 New Yorker profile of development economist Esther Duflo. If you can't get this link to work, you can also get The New Yorker through Lexis-Nexis, which we can access thru the Watson Library homepage.
Thursday, September 30, 2010
Resources to find midterm topic
To identify an organization or idea to profile for your midterm paper, below are a list of links that can quickly help you identify interesting business innovations. You may be frustrated at the relatively sparse detail that is often available on these organizations. Do the best you can to find the data you need to assess the business viability and development impact of the innovation; where you cannot find additional information be explicit in the paper about what more you would want to know to make an assessment, how you would efficiently gather the information and how different results from the new information would affirm or refute your hypotheses about the innovation.
- UN's Growing Inclusive Markets program has a resource center that includes case studies on business innovations sortable by country and theme.
- Changemakers ran a competition on Leveraging Business for Social Change that should have many relevant examples. Their G-20 Finance Challenge also has some enterprises profiled that would be relevant.
- The NextBillion website that WRI runs (as part of the program that includes the market sizing data we looked at in class) is a comprehensive place for dicsussions and descriptions of businesses.
- Many of the fund managers and non-profits who work in this space also describe specific investee companies in their reports and onlines. You can either profile an investee company, or the fund as a business innovation itself. Good places to start would be SEAF, E&Co. (especially if you're interested in clean energy and development), Acumen, IGNIA ,Root Capital, Grassroots Business Fund, GroFin, Business Partners, Actis (larger-scale, more commercial business opportunities). The development finance institutions (World Bank, IFC, Norfund, FMO, etc.) all have websites with some anecdotal examples of investee companies and social and financial impact reporting.
If you find additional online resources that are useful in your search, please post here so we can all know about them.
--Prof. Bugg-Levine
Midterm and Final Dates
Midterm paper due: Friday Oct 29
Final project description due: Wednesday Nov 17 (note: not Wed Nov 10)
Final report due: Friday Dec 17 (note: not Wednesday Dec 15).
Can't Get Enough Compartamos?
Check out this 2006 New Yorker piece on MFI, which has a good chunk on Compartamos (if you can't get the link to work, you can also get The New Yorker on Lexis-Nexis, which we can access thru the Watson Library homepage).
And here's a brief wrapup of what's happened since the IPO:
Compartamos’ profits have continued to skyrocket since its April 2007 IPO. In July, the bank said its second-quarter profit rose 46% to $37.3 million from 2009. Return on equity rose as well, increasing to 42.3% in the quarter from 41.3%. Analysts credited the success, in part, to continuing customer growth, as the number of active Compartamos clients rose 23.4% to 1.63 million at the end of June. Compartamos’ comparatively recession-proof customers – low-income borrowers and small business owners engaged in pursuits such as craft manufacturing and food vending – also helped shield the bank from the Mexican economy’s 6.5% contraction in 2009. Default rates rose in the second quarter by more than 20% but, at just 2.2% of the bank’s loan portfolio, remain low. Now, Compartamos and other Mexican banks stand to benefit from a recovery slated to push Mexico’s economic growth up to around 5% this year.
Compartamos remains a behemoth in the Mexican microfinance sector, with a market share of just over 50%. Among its closest domestic competitors: Finsol, Fincomun and Financiera Independencia. Compartamos’ flagship product – Credit for Women, which offers 16-week loans exclusively to groups of 12-50 women – continues to dominate the bank’s business, accounting for some 75% of its loan portfolio and 89% of its clients. Critics continue to charge that Compartamos gouges its customers with interest rates averaging around 85%, compared to a global microfinance average of 26%. Bank officials say the fact that Mexican loans are much smaller than loans in other countries means Compatamos' rates have to be higher. Compartamos’ relatively high financing costs also contribute; the bank is working on launching a deposit program to diversify its funding base, which is currently comprised of its own capital, long-term debt and Mexican development-bank loans.
Compartamos is now one of five microfinance companies to have publicly listed shares. The other four are Bank Rykat of Indonesia, BRAC Bank of Bangladesh, Equity Bank of Kenya, and SKS Microfinance of India, which saw its shares rise 10.5% on its first day of trading last month. The microfinance industry itself is becoming a big-money player. In 2008, the sector attracted $14.8 billion in foreign capital, up 24% from the previous year. For the first time, the majority of the money came from private investors – including pension schemes and private-equity funds – rather than governments, according to the World Bank.
-0-
And here's a brief wrapup of what's happened since the IPO:
Compartamos’ profits have continued to skyrocket since its April 2007 IPO. In July, the bank said its second-quarter profit rose 46% to $37.3 million from 2009. Return on equity rose as well, increasing to 42.3% in the quarter from 41.3%. Analysts credited the success, in part, to continuing customer growth, as the number of active Compartamos clients rose 23.4% to 1.63 million at the end of June. Compartamos’ comparatively recession-proof customers – low-income borrowers and small business owners engaged in pursuits such as craft manufacturing and food vending – also helped shield the bank from the Mexican economy’s 6.5% contraction in 2009. Default rates rose in the second quarter by more than 20% but, at just 2.2% of the bank’s loan portfolio, remain low. Now, Compartamos and other Mexican banks stand to benefit from a recovery slated to push Mexico’s economic growth up to around 5% this year.
Compartamos remains a behemoth in the Mexican microfinance sector, with a market share of just over 50%. Among its closest domestic competitors: Finsol, Fincomun and Financiera Independencia. Compartamos’ flagship product – Credit for Women, which offers 16-week loans exclusively to groups of 12-50 women – continues to dominate the bank’s business, accounting for some 75% of its loan portfolio and 89% of its clients. Critics continue to charge that Compartamos gouges its customers with interest rates averaging around 85%, compared to a global microfinance average of 26%. Bank officials say the fact that Mexican loans are much smaller than loans in other countries means Compatamos' rates have to be higher. Compartamos’ relatively high financing costs also contribute; the bank is working on launching a deposit program to diversify its funding base, which is currently comprised of its own capital, long-term debt and Mexican development-bank loans.
Compartamos is now one of five microfinance companies to have publicly listed shares. The other four are Bank Rykat of Indonesia, BRAC Bank of Bangladesh, Equity Bank of Kenya, and SKS Microfinance of India, which saw its shares rise 10.5% on its first day of trading last month. The microfinance industry itself is becoming a big-money player. In 2008, the sector attracted $14.8 billion in foreign capital, up 24% from the previous year. For the first time, the majority of the money came from private investors – including pension schemes and private-equity funds – rather than governments, according to the World Bank.
-0-
Tuesday, September 28, 2010
Special Session: Profiting from the Poor? A Discussion on Microfinance IPOs
Finally! The stage is set at the 2010 CGI meeting in NY.
Yunus vs. the "IPOs" and WWB in the middle to serve as a buffer while each side prepares its response. The long heated argument has come to an end... or not
Video Link
Not sure if these are Akula's exact words but I got the message that: Grameen got the ball rolling and if it wasn't for them, Microfinance wouldn't be what it is today. But, companies like SKS are today's needed evolution of the Microfinance model in order to continue increasing the amount of credit available to poor people
Very interested to hear your views as there are definitely many points to counter my argument, and I believe that we actually need to constantly re-asses the direction of Microfinance in order for it to continue effectively alleviating poverty.
Best,
Pepe
Yunus vs. the "IPOs" and WWB in the middle to serve as a buffer while each side prepares its response. The long heated argument has come to an end... or not
Video Link
Not sure if these are Akula's exact words but I got the message that: Grameen got the ball rolling and if it wasn't for them, Microfinance wouldn't be what it is today. But, companies like SKS are today's needed evolution of the Microfinance model in order to continue increasing the amount of credit available to poor people
Very interested to hear your views as there are definitely many points to counter my argument, and I believe that we actually need to constantly re-asses the direction of Microfinance in order for it to continue effectively alleviating poverty.
Best,
Pepe
Thursday, September 23, 2010
Hey all -
Here's the full Monitor "Emerging Markets, Emerging Models" report, which Mike Kubzansky mentioned yesterday. Lots of other interesting stuff in the Monitor Inclusive Markets archives, including Mike's Dec 09 piece on MFI networks, if you're inclined to poke around.
After hearing about IGNIA from Alvaro Rodriguez Arregui yesterday, you might want to check out a new livemint piece featuring SONG Investment Advisors. SONG, which like IGNIA counts Omidyar Network among its major backers, is a venture capital fund focusing on economic development in India.
Happy reading.
Here's the full Monitor "Emerging Markets, Emerging Models" report, which Mike Kubzansky mentioned yesterday. Lots of other interesting stuff in the Monitor Inclusive Markets archives, including Mike's Dec 09 piece on MFI networks, if you're inclined to poke around.
After hearing about IGNIA from Alvaro Rodriguez Arregui yesterday, you might want to check out a new livemint piece featuring SONG Investment Advisors. SONG, which like IGNIA counts Omidyar Network among its major backers, is a venture capital fund focusing on economic development in India.
Happy reading.
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