Abstract
Corporate bonds are become a growing source of funds in developing countries generally, and microfinance institutions (MFIs) are starting to gain access to them. This paper discusses the experience of two leading MFIs that have been able to access local markets by issuing bonds: Mibanco, a commercial microfinance bank in Peru, and Compartamos, a finance company in Mexico that now has the largest number of borrowers in the Americas. The reasons for selling bonds are described, as well as the prerequisites for accessing these markets, such as a solid performance record, and the help of a number of external players such as rating agents. The bond issues of both of these organizations were successful, resulting in a very significant fall in the overall cost of the funding.
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