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PrintJun 12, 2009
J.P. Morgan recently provided some added momentum for global microfinance, hosting the Seventh Annual Women's World Banking Microfinance and the Capital Markets Conference, an event that serves as a catalyst for the industry by drawing heads of microfinance organizations from more than 30 countries, industry thought leaders, and investors into one location where they can discuss the latest developments and chart a course for progress.
Setting the stage at J.P. Morgan's New York headquarters, Nick O'Donohoe, global head of J.P. Morgan Research and the firm's senior sponsor for its Social Sector Finance initiative, told the 300 attendees: J.P. Morgan is committed to helping MFIs enhance their knowledge of capital markets and gain access to the capital they need through a robust, transparent market in order to alleviate global poverty.
Microfinance institutions, he noted, have already had a large measure of success, based on the 100 million individuals who have been lifted out of poverty through the work carried out by the organizations, much of it in small loans to women who launch their own businesses in poor countries.
At the two-day gathering, the industry leaders, MFIs and other attendees exchanged ideas and discussed the impact of the global finance crisis on the sector, especially ways to raise equity and debt capital during the crisis, and detailed successful strategies that have helped sustain the organizations during the prolonged downturn.
"This conference is about building a capital market and that requires communication, a meeting point to bring together investors and MFIs," said O'Donohoe. "Today, we have a number of investors and MFIs from every part of the world. Hopefully, this forum will give you the opportunity to meet each other, get to know each other and identify funding opportunities."
A number of J.P. Morgan employees also participated in the event, serving as moderators, panelists, judges, volunteers and attendees.
J.P. Morgan takes a "double bottom line" view of the sector, seeing it as a way of improving society through MFIs, such as Women's World Banking (WWB) and other organizations, and as a way of earning returns from its positive involvement, O'Donohoe said.
According to a study cited by Mary Ellen Iskenderian, CEO of WWB, microfinance will represent a $20 billion business by 2015, a five-fold increase from its current level.
A particular high point of the conference was the MFI competition in which nine MFIs, teamed up with J.P. Morgan volunteer teams, to present the challenges they face and the potential strategic direction they could take for success.
The winning team was Women's World Banking Ghana, a microfinance savings and loan, which presented a plan to generate sustainable, provable risk-adjusted growth. J.P. Morgan Investment Bank employees assisted in preparing the presentation.
In this difficult economic environment, it's important to refocus on core strengths and strategies, Christina Leijonhufvud, who heads J.P. Morgan's Social Sector Finance team, said. "I was encouraged by the messages of how important it is to refocus on risk management and infrastructure, contingency planning, rating agency and investor readiness," she said, adding that increasing transparency is essential to the sector's growth. "J.P. Morgan's commitment to microfinance is as strong as ever."