Microfinance 2.0

Here is an interesting article from Spiegel Online (thanks Avashya for letting us know about it) on an entrepreneur’s efforts to utilize the power of private equity to scale up microfinance institutions more quickly and to provide them with the capital necessary for significant expansion. One issue that comes to mind, as is discussed further in this post, is the ability for such funds to autonomously control the direction of a microfinance fund away from their original core competencies.

In 2001 a pair of Europeans, Jean-Philippe de Schrevel and Cédric Lombard, discovered they shared a mutual conviction that the best way to cure poverty is through the capital markets. So they began lending money to microfinance institutions through a Geneva vehicle called BlueOrchard. Belgian de Schrevel, a former McKinsey & Co. consultant, got his MBA at Wharton, while Lombard hails from one of the families behind Lombard Odier Darier Hentsch, among Switzerland’s oldest private banks.

Despite the success of the $710 million in capital managed through multiple microfinance funds, de Schrevel wanted more control and say in their investment vehicles.

Continue reading

Advertisements