Empowering Low-Income Women through Financial Inclusion and Investment Strategies

1. Women’s World Banking To expand the economic assets, participation, and power of low-income women and their households by helping them access financial services, knowledge, and markets Mission • Largest network in microfinance, built over 30 years • 40 microfinance providers • 28 countries: 8 in Africa, 8 in LAC, 6 in Asia, 6 in EMENA • 24+ million active clients, 80% women • $5.5 billion in outstanding loan portfolio; $2.6 billion in deposits • Average loan size of $1,200 Network

2. Generally sufficient capital in the sector, WWB is concerned about the quality of that capital • Recent CGAP research shows that while local currency lending is increasing, MIV debt investments are still 69% hard currency. MIV average loan tenor is just under 3 years but most other funding is 1 to 2 years • Recent WWB research indicates a strong link between capital providers and institutions’ ability to remain mission focused • For the first time in its history, WWB is making direct investments in network members, “putting principles into practice”

3. Debt • MFIs need capital that is: • long-term, 3 to 5 years or longer depending on the product offering (housing loans); • local currency; • fixed-rate, unsecured • transparent in pricing; and • standardized for reporting and covenants • Increasingly foreign investors are recognizing this and offering better terms; WWB would like to see increasing alignment on this issue

4. Equity • MFIs need equity capital that: • Is patient (minimum 5 to 7 year horizon) • Achieves goals through mission alignment • Outreach to poor, especially women • Provision of full suite of financial products • Invests in market research, impact studies and staff training • Provides resources beyond financial support • Good governance • Connects the MFI with technical assistance and best practices • Can advocate at the regulator and industry level • Strengthens leadership’s commitment to the mission

5. WWB is concerned that equity investors rely too readily on standard models for success for commercial finance • Not focused on serving women • Increasing average loan size • Overly reliant on collateral • Singular focus on loan officer productivity (at expense of client relationships) • Cutting expenses without considering long-term effect (market research, impact studies, financial education/business development, gender diversity investments) • ≠ pro-poor strategies • WWB believes building a growth strategy based on traditional MFI principles of investing in the poor, especially women, and knowing your customer can achieve comparable financial returns