Intellecap Publishes Inverting the Pyramid 2008 – Indian Microfinance: Scaling Against the Odds

November 1, 2008

Inverting the Pyramid, an annual publication by Intellecap, consolidates growth and financial performance data from 70 large Microfinance Institutions (MFIs) in India and perspectives from over 25 equity and debt investors who hold investments/are seeking investments in this market. Complemented by Intellecap’s ground level understanding from being a key actor in this market, it provides insights on its defining market trends and performance in 2007-2008 and future outlook for entrepreneurship and investments in 2008-2013.

Following the success of Inverting the Pyramid: The Changing Face of Indian Microfinance, Intellecap published a follow-up report in 2008, Inverting the Pyramid 2008 – Indian Microfinance: Scaling Against the Odds which was sponsored by IFC.

In 2008, Indian microfinance witnessed active participation from commercial capital, changing promoter profiles, and unparalleled valuations. With turbulent financial markets and slowdown in the supply of on-lending funds, its growth and returns came under pressure. Despite this, Indian MFIs continue to be one of the fastest growing, efficient, and profitable players in the global microfinance market. But, with its rapidly increasing size, greater integration with mainstream markets, and growing list of stakeholders, there are new fears and unfamiliar demands on the industry. The decisions and priorities MFIs make today will determine the future of this growth story. Besides the regular features of last year, the report also included priorities for future growth, value and sustainability, and industry outlook in light of the ongoing global financial crisis

Why is microfinance in India interesting? Its proven track record for demonstrating high growth, high efficiency and profitability, and excellent credit quality makes microfinance a sunrise industry for entrepreneurs and professionals as well as an attractive and stable asset class for financial investors. With annual growth rates of over 80 percent and a minuscule market penetration of less than 10 percent, the Indian market is constantly witnessing the entry of many more actors seeking business and investment opportunities with ambitions and business plans that surpass historical benchmarks.

Years 2007 and 2008 saw Indian microfinance emerging as a valued asset class with 15 equity investments totaling USD 100 million, over 40 new institutional investors eying the market, changing promoter profiles and unparalleled valuations. With turbulent financial markets and changing priorities, what will future unfold for this industry? What will it take for its growth story to continue? Inverting the Pyramid 2008 – Indian Microfinance: Scaling Against the Odds explores such contemporary questions for this industry and presents:

· Key trends that defined Indian microfinance in 2007-2008
· Demand and supply statistics
· Growth and financial performance (for a sample of the 70 largest MFIs)
· Key stakeholders and their perspectives on the industry
· Estimated debt and equity capital requirements for 2008-2013
· Opportunities in the financing and business environment
· Priorities for future growth, value and sustainability
· Industry outlook in light of the ongoing global financial crisis