Microfinance Investment Summit Survey

http://www.microfinancesummit.com/

Question 1

Evaluating the growth and rate performance of microfinance as an asset

class- have microfinance investments performed better than expected

during the global economic crisis?

Top Representative Responses

1. The global economic crisis has affected the performance of

microfinance. However, microfinance demonstrates strong tendencies to

impact more people than banking.

2. yes, generally microfinance investments have proven to be less risky,

but still are not as high-yielding as other investments, and yes they have

performed better than expected

3. Yes, to my knowledge, at least in South Asia.

Question 2

How have liquidity constraints affected investments in terms of funding,

lending, and overall sustainability?

Top Representative Responses

1.Liquidity constraints are real and present in Africa. There must be

improvement in liquidity for microfinance achieve significant results.

2. Less commercial funding seems available but grant funding is still there.

Sustainability depends on geography. Where we are active in Zimbabwe

this has been huge problem.

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3. Funds are still available for deserving projects, although there has been

some slow down of investments , but not much.

4. Force MFIs to take higher FX risk or less favorable terms, but most MFI

liabitilites are 3-2 year term

© C5 Communications Ltd.

Microfinance Investment Summit Survey

http://www.microfinancesummit.com/

Question 3

Overcoming the challenges attributed to microfinance mergers and

acquisitions. Which of the following is top priority?

Percentage

Due Diligence and valuation 30.00%

Resource constraints 35.00%

Cultural Issues 15.00%

Regulatory issues 20.00%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00%

Due Diligence and valuation

Resource constraints

Cultural Issues

Regulatory issues

© C5 Communications Ltd.

Microfinance Investment Summit

http://www.microfinancesummit.com/

Question 4

What kinds of risks are being increasingly

monitored in microfinance now?

Least Moderate High

Refinancing risk 20% 20% 0%

Exchange rate risk 20% 20% 0%

Liquidity risk 0% 0% 60%

Interest rate risk 0% 20% 10%

Asset rate risk 20% 5% 10%

Risk of fraud at the local level as MFI's grow 30% 10% 20%

Quality of corporate governance. 10% 30% 0%

Total 100% 100% 100%

0% 10% 20% 30% 40% 50% 60%

Refinancing risk

Exchange rate risk

Liquidity risk

Interest rate risk

Asset rate risk

Risk of fraud at the local level as MFI's grow

Quality of corporate governance.

High Moderate Least

© C5 Communications Ltd.

Microfinance Investment Summit

http://www.microfinancesummit.com/

Question 5

How important is Social Impact Investment to your company?

Top Representative Responses

1. It is Fundamental to its long term growth and sustainability.

2. Important, but not as important as yield.

3. Social impact is the "heart" of what we do.

Question 6

Which approach do you currently apply for SME finance?

Percentage

Collateral based lending 35%

Information based lending 35%

Viability based financing 20%

Cash flow lending 10%

0% 5% 10% 15% 20% 25% 30% 35%

Collateral based lending

Information based lending

Viability based financing

Cash flow lending

© C5 Communications Ltd.

Microfinance Investment Summit

http://www.microfinancesummit.com/

Question 7

What impression does Environmental, Social, and Governance (ESG) reporting have

on funds and the double bottom line mission of microfinance?

Top Representative Responses

1. ESG reporting is taken into consideration, but its impact is not assessed yet.

2. This is an important factor for giving trust and it has a positive effect

3. SRI's are still growing. Information must be available in different ways by different

types of investors to meet their specific goals and needs.

4. There is a growing demand for ESG reporting. A postive effect of ESG reporting is

greater transparency. ESG reporting will continue to improve in quality. It makes

reporting and performance more comparable

Question 8

Do you plan to increase your exposure to microfinance investments in 2010 and

beyond?

Percentage

Undecided 20%

No 5%

Yes 75%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Undecided

No

Yes

© C5 Communications Ltd.