by providing tiny loans to the marginalized majority of the world’s population that lives on less than $3/day. The demand for microfinance loans, however, exceeds the current supply of capital available to microfinance institutions. Innovations in the commercial capital markets are starting to play a greater role in making more loan capital available to microfinance institutions so they can make loans to the poor. For example, in recent years, a growing number of microfinance institutions have issued bonds in their local capital markets to raise funds for expanding microfinance loan portfolios. This article focuses on yet another new, more structured, innovative form of financing: securitizing microfinance loan portfolios. In 2006, the world of true sale securitizations reached the microfinance market. In May of 2006, ProCredit Bank Bulgaria securitized 47.8 million of its Eurodenominated microfinance loans. Enhanced by guarantees provided by the European Investment Fund and Germany’s KfW, a state-supported development bank, these securities received a BBB credit rating, considered “investment grade,” from the global credit rating agency Fitch. In July of 2006, the Bangladesh Rural Advancement Committee (BRAC) closed a deal to securitize $180 million equivalent of local currency microfinance loans over a six-year period, with $15 million to be disbursed in the first six months. The issuance received the highest quality credit rating (AAA) from a local rating agency, Credit Rating Agency of Bangladesh (CRAB), and succeeded in attracting two local banks as key investors. These transactions were landmark issuances for the microfinance industry. While securitizations are not new to Wall Street, they are a significant innovation in microfinance. By using this form of structured finance, microfinance institutions have the opportunity to attract a broader range of investors. Securitizations have existed for over 30 years in the developed world, enhancing liquidity in sophisticated financial markets, but to apply this complex financial product to the world of microfinance requires new strategies, innovation, and a vision of unprecedented partnerships between the traditional banking sector and