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The Microfinance Crisis and the Role of Transparency

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Which Crisis?

Increasing Systemic Risk

Isolated Trouble Spots

Media coverage = Public Perception…were we complicit?

Oversold promise Reality

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Investment ClarityContext Concerns Clarity

• Social Mission

• Investment Objective

• Return

• Principal

• Headline Risk

• Social progress

• Track Record

Performance

Risk

Social• CSR• Process• Output/Outcomes

Management

Understand the

Tradeoffs

Understand the

Tradeoffs

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Investment DiversityMIV I MIV II MIV III

                 FSR / Sovereign Rating Matrix   FSR / Sovereign Rating Matrix   FSR / Sovereign Rating Matrix  

AAA to BBB-

BB+ to B B- to DAAA to BBB-

BB+ to B B- to DAAA to BBB-

BB+ to B B- to D

14.0% 6.9%   α+ to α-   9.8%   α+ to α-   12.5% 13.0% α+ to α-

6.3% 23.8% 18.3% β+ to β- 20.3% 44.3% 5.1% β+ to β-   9.0% 7.2% β+ to β-

  18.3% 12.5% γ+ to γ 0.7% 16.2% 0.4% γ+ to γ 12.5% 10.6% 31.7% γ+ to γ