Original Source: Triodos Investment Management
As equity sales in the inclusive finance sector grow, so does the importance of selecting a suitable buyer – the obligation of the seller to exit ‘responsibly’. The report Caveat Venditor: Towards a Conceptual Framework for Buyer Selection in Responsible Microfinance Exits provides a conceptual framework for buyer selection and guides investors and their advisors in future exits.
The report is the outcome of research initiated by the Netherlands Platform for Inclusive Finance (NpM), in partnership with the European Microfinance Platform (e-MFP) and the Financial Inclusion Equity Council (FIEC). It maps current industry practice on buyer selection processes, and the priority that investors give to different criteria in selecting a buyer. Triodos Investment Management actively contributed to this research by sharing its insights and learnings.
The need for a new strategic investor
Caspar Sprokel, Head of Equity at Emerging Markets: “In recent years we have exited a significant number of our investments in Asia, Africa and Latin America. These institutions had achieved a level of maturity as a fully-fledged bank, in terms of outreach, governance, risk management and performance. We felt that a new strategic investor was needed, bringing valuable expertise to further the growth and development of the institutions. This indicates the maturing of the inclusive finance industry but also raises the question for us ‘how to make a responsible exit from an institution in which we have been a shareholder for many years, in some cases a decade?”
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