MicroVest, a 15 year old firm focused on the Microfinance sector, and a Partner of the Christian Investment Summit, was recently highlighted in a Barron’s article. Here’s an excerpt from the article:
By Abby Schultz July 26, 2018 3:34 p.m. ET
Microfinance—the business of investing in financial institutions that make loans to low-income entrepreneurs in developing countries—is a form of investing for social good that long predates the decade-old impact investing market.
Today, microfinance is a key part of many impact portfolios, representing 9% of assets held by impact investors surveyed by the Global Impact Investing Network, or GIIN.
But for MicroVest, a 15-year veteran fund manager in the sector, the practice of investing in microfinance institutions is shifting from “classic” microfinance—providing loans to individuals selling vegetables at a local market, for example—to investing in small businesses, a sector MicroVest says is often under-served. “What happens when the woman borrower who started with a $200 loan has built her business and has 10 employees and now needs $5,000 in capital to buy equipment and machinery?” asks Ron Cordes, the former co-founder and executive co-chairman of AssetMark, who has invested in MicroVest through his family foundation since 2007.
“One of the issues with traditional microfinance is the organization she’s borrowed from to that point no longer has capacity to serve her,” Cordes says.
One of MicroVest’s objectives now is to serve this “missing middle,” by investing in low-income financial institutions with the capacity to lend to small businesses, to, in effect, strengthen the hand of these institutions to grow and serve more clients, which in turn helps to strengthen local developing economies.
“Small businesses pay taxes, so you can have schools and roads. They hire people outside of the family unit, they formalize and start to follow regulations, and they can link into the export economy,” says Gil Crawford, CEO, who co-founded the firm in 2003.