MicroVest is an asset manager that specializes in allocating private debt capital to responsible Microfinance and SME Finance Institutions that provide financial services to un- and underbanked microentrepreneurs and small businesses in emerging markets. As one of the first U.S.-based microfinance investors, we have built a track record since 2003 of investing in institutions whose interests are aligned with the borrowers and communities they serve.
Origins of Responsible Finance
The origins of modern responsible finance began with microfinance and can be traced back to the mid-1960s, when a number of multilateral institutions, government agencies, and non-profit organizations began creating affordable microcredit programs as part of their greater economic development agendas to assist the world’s poor. Many of these programs grew into what we know today as Microfinance Institutions (MFIs), which operate in a niche largely untapped by traditional banks.
Most regulated banks have chosen not to enter this market as low-income, underbanked populations are perceived to be higher credit risks and a higher cost to serve.
MicroVest was founded in 2003 by CEO/CIO Gil Crawford, the Mennonite Economic Development Associates (MEDA) and global nonprofit, CARE. At the time, CARE and MEDA were managing in-house microfinance portfolios but encountered roadblocks as the limits to scaling microfinance through a purely philanthropic model became apparent. At that time, virtually all responsible microfinance programs were carried out through non-profit or non-government entities, which were experienced at spending or donating money, not lending it. Due to early operational misalignment, many early microfinance institutions were unable to manage a financially sustainable business model.
MicroVest was founded as a solution to this problem. As an asset management firm, MicroVest could invest directly into Microfinance Institutions (MFIs) through commercial investment products that were safe and self-sustaining. The model would prove efficient at injecting capital flow into the space while also encouraging MFIs to work at building businesses that were client-oriented, sustainable, and scalable.
MicroVest believes that investing in responsible, well-run Microfinance and SME Finance Institutions that lend to underbanked micro and small businesses in emerging markets can unlock productivity that enables broader segments of the population to earn a living wage and pull themselves out of poverty. At the demand is massive. Today, an estimated 1.7 billion adults lack access to basic financial services worldwide, 56% of whom are women. At the same time there is a $4.8 trillion funding gap to small businesses in emerging economies. Unfortunately, a significant number of unbanked adults and small businesses are unable to access credit through the formal financial system, which hampers the ability of these households and businesses to grow and generate wealth.
Making Home Ownership a Reality for Low-Income Populations (Banco La Hipotecaria)
Providing Affordable, Low-Cost Health Insurance to Low-Income Borrowers (Fundacion ESPOIR)
Financing Specialized Machinery to Expand a Businesses’ Product Offerings (Mega Leasing)
We believe that when the underbanked are financially included, they can more effectively manage day-to-day finances, build financial resilience, and knowledgeably use financial products and services to pursue their dreams.
MicroVest is a registered investment adviser, Certified B Corporation, and wholly-owned subsidiary of MicroVest General Partner Holding LLC, a Delaware statutory PBLLC whose public benefit purpose is to create scalable investment opportunities that support enterprising ventures and projects in underserved or underfinanced sectors and communities worldwide.