BERWYN, Pa.--(BUSINESS WIRE)--When the poor in emerging countries are granted loans by microfinance banks, the benefits can be far-reaching. That’s the conclusion of the latest Sector Focus commentary by financial-services analysts at Turner Investment Partners.
Turner, an investment firm based in Berwyn, Pennsylvania, publishes Sector Focus commentaries monthly as part of the continuing efforts of its five analyst teams to monitor the market sectors for its growth-stock portfolios.
The paper, entitled Microfinance does well by doing good, was written by Pablo Echavarria, security analyst; David Honold, portfolio manager/security analyst; Mark Turner, president and senior portfolio manager; and Rick Wetmore, portfolio manager/security analyst. The authors believe that microfinance is “one of the most encouraging global economic and social developments in decades:” it empowers borrowers to improve their lives, especially the largest group of microfinance borrowers -- rural women.
The authors call the small, short-term loans a “win-win situation.” Lenders benefit from high net-interest margins and above-average repayment rates, while borrowers who have been denied credit in the past are able to fund business ventures that may provide a way out of poverty.
As examples of success in microfinance, the authors identify three foreign banks that are leading microfinance lenders: Bank Rakyat of Indonesia, Compartamos Banco of Mexico, and Credicorp of Peru. In the last three years, these microfinance banks have increased their net income by 20%. They are part of a $60-billion industry that Turner thinks is likely to prosper for years to come.
To read this July 2010 Sector Focus in its entirety, see the Turner Investment Partners Web site, http://www.turnerinvestments.com/sectorfocus. Or call 484-329-2407 for a free copy of the piece.
As of June 30, 2010, Turner held in client accounts 5.7 million shares of Bank Rakyat, 41,651 shares of Compartamos Banco, and 3,066 shares of Credicorp.
The views expressed represent the opinions of Turner Investment Partners as of the date indicated and may change. They are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities. Opinions about individual securities mentioned may change, and there can be no guarantee that Turner will select and hold any particular security for its client portfolios. Earnings growth may not result in an increase in share price. Past performance is no guarantee of future results.
Turner Investment Partners, founded in 1990 and based in Berwyn, Pennsylvania, is an investment firm with more than $16 billion in assets under management in stocks, as of June 30, 2010. Turner manages growth, global/international, core, value, quantitative, and alternative separately managed accounts and mutual funds for institutions and individuals.