Equity as a funding instrument is particularly important to responsible development of financial markets. At its core, it supports the growth and diversification of microfinance institutions (MFIs) and other financial institutions that serve the poor, and it is especially vital to the expansion of deposit services.
This paper is not intended to be prescriptive. The practice of selling equity in MFIs is still evolving, and the complexities of the transactions make each sale unique. Rather than setting out specific guidelines, we hope to draw on investor experiences to highlight key exit-related decisions for MIIs and DFIs, and in so doing, we hope to spur a focused debate on how to exit in such a way that the interests of investors, MFIs, and their clients are balanced.