Microfinance institutions (MFIs) will be able to serve massive numbers of the poor with high-quality financial services only when these MFIs have tapped commercial sources of funding and deposits.

Despite the financial crisis, in the past four years foreign investment in microfinance, including both debt and equity, has quadrupled to reach US$13 billion.

The purpose of this guide is to familiarize microfinance institutions with some of the issues that are commonly addressed in the negotiation of an equity capital infusion from outside investors.

Microfinance is experiencing an unprecedented investment boom. The past five years have seen remarkable increases in the volume of global microfinance investments. Between 2004 and 2006, the stock of foreign capital investment—covering both debt and equity—more than tripled to US$4 billion.