Stable Returns, Positive Outlook

FEBRUARY 2012 – Dear Readers, 2011 proved to be a good year for the microfinance industry across the board. In most of the 57 countries where Triple Jump is active, the microfinance sector showed a healthy growth and was hardly affected by the ongoing financial crisis in the Euro zone and the United States. MFI demand for funding increased steadily in 2011, leading to lower levels of liquidity on the balance sheets of the Microfinance Investment Vehicles (MIVs) for the first time in years. As a result of lower liquidity levels we can expect spreads to increase this year.

There were only a few countries that faced some difficulties. Uganda and Tanzania suffered from high inflation as a result of increased food and oil prices, which in turn impaired the growth of the MFIs. In India the microfinance sector had a difficult year following the new norms issued by the Reserve Bank of India for NBFC-MFIs that is expected to impede their growth and profitability. On a positive note the situations in Bosnia-Herzegovina and Nicaragua have stabilised and are showing a cautious positive trend.

Furthermore, as in previous years, we were able to achieve attractive returns for our investors in 2011. Although the microfinance industry is still relatively young, it is safe to say that in general microfinance investors have been rewarded with good and very stable financial returns over the last 5 years that compared quite favourably to most other asset classes.

However, in addition to the financial return, we need, more than ever, to be able to demonstrate to our investors that the investments we make also achieve an acceptable level of social performance. To that extent Triple Jump is leading the Social Performance Task Force (SPTF) group in sharing and harmonising Social Performance Assessment Tools, because we strongly believe that harmonisation among MIV managers will greatly contribute to increased transparency.

Overall we believe that the microfinance sector is in good shape and view the development of this industry in 2012 with great confidence.

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Mark van Doesburgh
Managing Director