[Webinar] What are the profitability levels for microfinance?

© Didier Gentilhomme

On April 9, Philippe Guichandut, Director of Inclusive Finance Development at the Grameen Crédit Agricole Foundation, participated in a webinar organized by Convergences and FinDev Gateway. The goal of this webinar was to reflect on the profitability of microfinance, focusing on three key issues: Why invest in microfinance? What balance should be struck between financial profitability and social performance? How can a business model be developed to reconcile dual profitability?

Although an essential requirement, the notion of profitability is nevertheless complex to grasp in a sector like microfinance, whose raison d'être is social impact. Thus, must microfinance necessarily be profitable? If so, can it be so while remaining socially responsible? Can it remain faithful to its aspirations and contribute, through financial inclusion, to lifting 1.7 billion people worldwide without access to banking services out of poverty? Between reasonable interest rates and sufficient profitability, what balance can microfinance institutions strike? What resources are available to finance the development of the microfinance sector?

This is what the various guest speakers attempted to answer. Also present alongside Philippe Guichandut were Gabriela Erice Garcia, Senior Microfinance Officer at the European Microfinance Platform (e-MFP), and Frédéric Mille, Investment Director at Advans International.