NB Financial Innovation
IPOs in Microfinance – The Good, The Bad, The Ugly: Highlights from Our Twitter Debate
Editor’s note: Throughout this year, NextBillion is organizing content around a monthly theme, dedicating special attention to a specific sector alongside our broader coverage. This post is part of our focus on microfinance for the month of January.
Initial public offerings have played an important role in both the emergence of microfinance and in its fall from grace, so it’s no surprise they’re controversial.
The range of conflicting opinions about their impact was on full display in NextBillion’s Twitter chat on Jan. 30, where a panel of experts approached the question of IPOs’ pros and cons from very different perspectives:
- Anna Kanze is COO of Grassroots Capital Management and two of its longstanding portfolio companies – Equitas Holdings and Ujjivan Financial Services – have tapped public markets in India.
- Daniel Rozas is senior microfinance expert at the European Microfinance Platform and a consultant and researcher on a broad range of topics in financial inclusion. He has extensively studied two of the most heavily scrutinized microfinance IPOs, those of SKS Microfinance and Compartamos.
- Chuck Waterfield, founder of the influential (but sadly defunct) watchdog organization MicroFinance Transparency, is an independent consultant and prominent critic of excessive pricing within the sector.
You can view the full discussion in the Storify below, edited for clarity. The Twitter chat was preceded by a podcast featuring Anna Kanze and Daniel Rozas, in which they lay the groundwork for the discussion by exploring the effects of IPOs on Equitas Holdings, Ujjivan Financial Services, SKS Microfinance and Compartamos. Both the podcast and Twitter chat are part of our ongoing special coverage of microfinance this month. We hope to feature similar open discussions as part of future monthly themes, which you can find on our editorial calendar.