Letter # 82

Today, we discuss how, when you can’t change the facts, changing definitions help.

Recently, the changes by RBI bring the microfinance sector back into focus. Today, we begin by tracing MFI’s roots in India and its more recent journey (the 2010 AP crisis, 2016 demon, and 2020 Covid).

We conclude that while shares of MFI players are down from pre-covid levels, the operating parameters have improved meaningfully over the last few months. MFIs are a super-cyclical business, but does now qualify as ‘not a great business, but a good investment’? Read here: Microfinance: RBI’s new guidelines to make microfinance stronger – The Economic Times (indiatimes.com)

Disclaimers:
Information in this letter is not intended to be, nor should it be construed as investment, tax or legal advice, or an offer to sell, or a solicitation of any offer to make investments with Buoyant Capital. Prospective investors should rely solely on the Disclosure Document filed with SEBI. Any description involving investment examples, statistical analysis or investment strategies are provided for illustration purposes only – and will not apply in all situations and may be changed at the discretion of the principal officer. Certain information has been provided and/or based on third-party sources and although believed to be reliable, has not been independently verified; the investment managers make no express warranty as to its completeness or accuracy, nor can it accept responsibility for errors appearing herein.