In addition to raising and managing capital for direct investment in microfinance institutions, CALMEADOW also organizes and sponsors various microfinance market development initiatives.
In May 2006, CALMEADOW coordinated and sponsored the Downscaling Symposium: The Promotion and Acceleration of the Incursion of Private Commercial Banking into the Microfinance Industry. As a part of their competitive strategy, many commercial banks in Latin America and the Caribbean have begun serving microentrepreneurs by “downscaling” operations into the microfinance sector. The downscaling model has seen much success in South America, while few Central American banks have ventured into the market. Due to this phenomenon, much interest existed in holding a high level symposium to increase awareness and share approaches toward downscaling, with the greater aim of accelerating the trend in providing credit to microenterprises. Providing both logistical and financial resources, CALMEADOW brought the idea to fruition.
The Downscaling Symposium, held at Harvard-affiliated INCAE Business School in Alajuela, Costa Rica, stimulated a dialogue among participants regarding the entry of private commercial banking into the Latin American and Caribbean microfinance industry by means of the “downscaling” model. Industry executives and experts from nineteen different countries shared their perspectives and experiences in downscaling, in an attempt to accelerate the trend toward downscaling in the region.
Along with CALMEADOW, the Multilateral Investment Fund (MIF), Interamerican Development Bank (IDB), Interamerican Investment Corporation (IIC), Andean Development Corporation (CAF), and the Federation of Latin American Banks (FELABAN) also provided funding for the event.
CALMEADOW further supports development of the microfinance industry by commissioning papers investigating various facets of the microfinance market. CALMEADOW recently commissioned through MicroRate an investigation by Julie Abrams examining the crowding out of private microfinance investment by public institutions. This study seeks empirical evidence of whether or not international publicly funded development institutions have hindered private commercial investment by funding microfinance institutions at below-market rates.
CALMEADOW also commissioned Randall Dodd’s research on the development of an innovative Foreign Exchange Risk Management Facility which could encourage international microfinance investment by mitigating foreign exchange risk for currencies not actively traded in capital markets. The proposal identifies the potential demand for such a facility and explains the products and services it would offer, as well as provides a detailed quantitative analysis of the proposed facility’s operations.
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