Investing in the poor in India

The success of India’s first microfinance IPO opens a new frontier for investors in micro financial services.

The overwhelming success of SKS Microfinance’s $342 million initial public offering marks a turning point not just for India’s largest micro lender but for the most dynamic sector of the country’s financial services industry. Although micro-credit organisations aren’t strictly banks in India, for-profit microfinance institutions or MFIs are barred from accepting retail deposits, they operate like banks in that they borrow money and lend it at a significant spread to the poor.

According...

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