A Real Ethical Investment
Microfinance is socially responsible investment in its truest sense:
Putting
CAPITAL TO WORK
for the
MUTUAL BENEFIT
of
the individual
INVESTOR AND SOCIETY
as a whole.
Most of us have what we think of as “investments” - unit trusts, stocks and shares ISAs, investment bonds or pension plans which are invested in funds consisting of shares and other securities in a whole range of companies, which are listed on the stock market.
Although we hope to gain financially if our fund managers can sell these shares at a higher price than they originally paid, we are not really contributing in any way to those companies’ profits. The only people to benefit directly are the investment companies who are paid to carry out these transactions and the advisers who recommend these funds. Given the speed and frequency with which these shares change hands, this is not really investment but market speculation.
Given the propensity for these funds to fluctuate wildly in value in relatively short periods of time, it is worth considering other forms of investment which are not as volatile.
This does not mean they do not have their own risks - but in an increasingly fast, complex and global economy having a diverse range of investments with different risk characteristics is the only sensible solution.
A Real Alternative to Conventional Investment
We believe that microfinance should be considered as an attractive alternative investment and should form an integral part of any investment portfolio, which will add value and, in ever changing economic markets, help to diversify risk.
It would be obvious to consider microfinance as a riskier but higher yielding form of investment than bank or building society savings, National Savings or Gilts (Governmnet stocks)
However it should also be considered as a real alternative to riskier investments such as equities and other fixed interest securities, such as corporate bonds, which many investors hold in unit trusts, ISAs, investment bonds and pension plans.
We believe that Microfinance in general should constitute between 2% and 5% of an investor’s total portfolio.
Microfinance offers an extremely attractive option as a pension investment - particularly for those approaching retirement and those who are drawing income from their pensions prior to purchasing an annuity.
- Micro finance loans are normally repaid in full within 6 months or a year.
- The interest payments are well above the rates available from UK banks and building societies.
- Returns are not affected by stock market fluctuations.
It is also a worthwhile consideration for any investor seeking income rather than capital growth.
