Microfinance

Microfinance aims to alleviate poverty by empowering the poor. From its origins in the 1970s as an industry driven by non-governmental organizations, microfinance is now led by profitable, regulated financial institutions that often out-perform local commercial banks. The original belief that micro-entrepreneurs were a good credit risk holds true. This paper examines the success of this transformation and the emergence of microfinance as an investment opportunity that is attracting SRI investors and institutions seeking portfolio diversification.