CGAP has released a draft Focus Note written by Richard Rosenberg. CGAP Reflections on the Compartamos IPO: A Case Study on Microfinance Interest Rates and Profits. The successful IPO of Compartamos on April 20th and the enormous gains produced through the sales have provoked discussions concerning 1) the very high interest rates charged over the years 2)were the grants given to Compartamos used inappropriatelly to benefit private investors and 3)governance issues on balancing social and commercial objectives after the IPO. Thus this is a very well written and welcome report providing the base for discussions and brainstorming needed for the microfinance industry. As the author puts it;
"All of us who are involved in commercial transformation-that is, moving microfinance operations from not-for-profit to for-profit institutional forms-need to be clearer and more realistic in dealing with the inevitable consequences of those transformations."
MICROFRANCHISING: Creating Wealth at the Bottom of the Pyramid, the first major publication on this subject, is now available. (Edward Elgar Publishing). This edited volume comprising 13 chapters and 18 authors introduces the concept of microfranchising and discusses how this business model can be effectively used for poverty alleviation. Different models of microfranchising are reviewed and specific case studies are highlighted to show how it has worked and is working in different parts of the world. Also the advantages as well as potential problems and pitfalls of microfranchising are discussed. My contribution was on the subject of "Microfranchise Funding" (Chapter 12).
If there is one thing I could hope for is that the price for this book would be a bit lower so more people can afford to buy it and read it.