Microfinance: Keeping the Mission When Non-Profits Become For-Profits

> Posted by Michelle Romeu
In her latest Huffington Post blog, Elisabeth Rhyne provides the ingredients for a successful transformation from non-profit MFI into for-profit organization.

Most people with a lively interest in microfinance know that the majority of microloans dispensed throughout the world today come from for-profit microfinance institutions, rather than donation-dependent non-governmental organizations (NGOs).

What may be less recognized is how these for-profit MFIs were born. Many of the world’s largest and most successful microfinance organizations — including India’s SKS Microfinance, which just raised some $358 million in a closely-watched IPO — started life as nonprofit NGOs. Riding on early success in attracting clients, they decided to undergo dramatic transformations: they found investors, obtained regulatory approval, and spun off licensed, for-profit financial institutions, leaving the original NGO behind. This process has now happened dozens of times around the world.