Microfinance for Bankers and Investors: Understanding the Opportunities and Challenges of the Market at the Bottom of the Pyramid Book

Preface vii

Introduction xiii

Part 1 Understanding Clients, the Market, and the Opportunities

1 The BOP Market Up Close (and Personal) 3

2 Who Serves the BOP Market-and Who Doesn't? 11

3 Four Critical Challenges in the BOP Market 18

4 Products for the BOP Market 27

5 Three Products: Insurance, Housing Finance, and Remittances 34

Part 2 Models and Corporate Choices

6 Corporate Choices 47

7 Commercial Banks as Microlenders 57

8 Partners at the Last Mile: Retailers, Banking Agents, and Insurance Companies 66

9 Models of Financing Inclusive Finance 77

Part 3 The Emerging Industry of Inclusive Finance

10 Building the Infrastructure for Inclusive Finance: The Enabling Environment 95

11 Credit Bureaus and Credit Scoring 103

12 Last-Mile Technologies 111

13 The Technological Base: Payment Systems and Banking Software 120

14 Building the Market for Investing in Microfinance 126

Part 4 Socially Responsible Returns

15 Approaches to Social Responsibility 139

16 Client Protection and Proconsumer Inclusive Finance 148

17 Measuring the Social Bottom Line 158

Cases 1 Banking Models

ICICI Bank: Shaping Inclusive Finance in India 167

Citigroup Fosters Commercial Relationships with Microfinance Institutions 175

Banco Pichincha and the Service Company Model 181

Banco Bradesco: Twenty-First Century Postal Banking 188

Cases 2 New Players: Retailers, Insurers, and Telecoms

Banco Azteca: A Retailer Surprises Mexico's Financial Giants 195

Vodafone: A Bold Move into Financial Services for Kenya's Poor 204

G-Cash: Filipinos Text Their Way to Mobile Banking 209

Cases 3 Industry Developers

Visa: SocialBenefit Systems That Benefit Everyone 219

Temenos: Creating Core Banking Systems for Microfinance 226

Creditinfo: First Credit Bureau in Kazakhastan 231

Cases 4 Financing Models

MF Analytics and Citibank: The Securitization of BRAC Loans 239

Credit Suisse: Bringing Compartamos to the Market with a Successful IPO 245

Sequoia Capital: Private Equity and Indian Microfinance 252

Cases 5 Social Responsibility

ANZ Bank: If the Mountain Will Not Come to Us, Then We Must Go to the Mountain 261

Equity Bank Goes to Schools 266

Triodos Bank and the Global Reporting Initiative 272

Acknowledgments 279

Endnotes 281

References 299

Index 317