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Selected Case

published: 22 Feb 2010

  • Topic: Responsibility
  • Industry: Banking
  • Region: Global

Abstract:
Microfinance investment opportunities have been well received by Credit Suisse clients seeking socially responsible investments. They provide a "double bottom line": a positive financial return (despite the global financial crisis), and a social impact by offering first-time access to financial services to the poor. From $5 million in 2003, total assets under management in microfinance at Credit Suisse reached $1 billion by 2009, and untapped demand is estimated at $300 billion. The firm has positioned itself as a link between the TOP of the wealth pyramid (its clients) and the BOP (base of the pyramid, the poor), but as microfinance comes under fierce criticism for over-indebting the poor, and with a decline in growth, performance and portfolio quality, Credit Suisse must consider its future engagement in this sector of the emerging markets.

Pedagogical Objectives:
(1) To understand the concept and challenges of investing in an alternative asset class like microfinance; (2) To analyse the benefits and risks for a global financial institution like Credit Suisse to be involved in microfinance in a context of a booming, but increasingly uncertain industry; and (3) To decide whether and how Credit Suisse should extend its involvement in an uncertain field in a number of emerging markets.

Keywords:
Microfinance, Banking, Socially Responsible Investment (sri), Microfinance Fund, Financial Crisis, Portfolio Diversification, Development, Social Responsibility and Ethics, Poor People, Sustainability, Credit Suisse, Investor, Risk Management, Global Financial Crisis, Emerging Market, Social Entrepreneurship


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