Mexican Microfinance Institution Compartamos Breaks Silence Since IPO

by Joseph Bornstein, NextBillion.net - Development Through Enterprise - Microfinance on Jul 08, 2008

Breaking their silence since their April 2007 IPO, Carlos Danel and Carlos Labarthe, co-founders of Compartamos, the leading Mexican microfinance bank, publish an excerpt of their newly released "Letter to Our Peers" in the latest issue of the magazine Microfinance Insights. The authors, who have been criticized by members of the microfinance community since their IPO brought in extraordinary returns, acknowledge in the letter that social and economic goals can reinforce each other, but state that "there is no agreement on the appropriate levels of the use of profits to achieve this balance." They explain that the Compartamos IPO, the first for a microfinance institution (MFI), has been an initiative to build the company, and has helped convince the private and the entrepreneurial class that "microfinance is worth pursuing."

The 2007 Compartamos IPO was a symbol of the sector's exponential growth, and since then there have been other signs of microfinance's movement into the mainstream-a growing number of nonprofit microfinance institutions transforming into regulated entities, more mainstream media coverage, and larger investments from more mainstream investors. It is this movement that is covered in the newest issue of Microfinance Insights--Mainstreaming: Are We Ready for Takeoff?.

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