Publication detail

Suitability of Microfinance as an Investment Option

Author(s): Ing. Barbora Hildebrandt (Svárovská) M.A.,
prof. Ing. Karel Janda M.A., Dr., Ph.D.,
Type: Articles in refereed journals
Year: 2012
Number: 0
ISSN / ISBN: ISSN 1211-3298
Published in: CERGE-EI Working Papers, WP470
Publishing place:
Keywords: Microfinance, Investment, Funds, Risk, Return
JEL codes: G11, G21
Suggested Citation:
Grants: GACR 403/10/1235 (2010-2014) Institutional Responses to Financial Market Failures GACR P402/11/0948 Developing Analytical Framework for Energy Security: Time-Series Econometrics, Game Theory, Meta-Analysis and Theory of Regulation GAUK 629112: Financing of Microfinance
Abstract: This paper investigates investment performance of the most commercially developed microfinance investment funds and it also includes a discussion of major economic characteristics of microfinance investments. When we analyze the relation between microfinance funds' returns and the performance of stock and fixed income markets in developed and emerging economies we find a slightly negative correlation. We show that returns of microfinance investment funds exceed the returns on the market portfolio. Together with reported near-to-zero beta estimates as a proxy for the systematic risk, this means that investment into microfinance investment vehicles may be recommended as a desirable addition to an investment portfolio.

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