Case Study: Morgan Stanley & Microfinance Institutions

On February 20-21, 2008, Morgan Stanley partnered with Women’s World Banking (WWB) to host WWB’s 6th annual Microfinance and the Capital Markets conference. The conference was a ground-breaking event that drew nearly 300 attendees, including 78 microfinance managers from 44 microfinance institutions (MFIs) globally. The centerpiece of the conference was the Case Study Competition, where nine teams of Morgan Stanley employees and participating MFIs presented case studies on strategic capital markets issues.

The Opportunity

Microfinance is in a state of evolution “from a community-centered, non-profit activity based primarily on charitable impulses to an asset class that global investors are vying to get into,” said Mary Ellen Iskenderian, President and CEO of WWB. “As we celebrate the potential that these changes bring for the future of microfinance, we must also be mindful of not losing sight of our social mission of empowering women and alleviating poverty.”

Company’s Pro Bono Investment

Morgan Stanley designed a Case Study Competition matching teams of high-potential Morgan Stanley employees with nine leading MFIs to tackle a strategic capital markets issue. Forty-one employees, forming cross-divisional teams globally, worked with their MFI partners for four weeks prior to the conference to build innovative frameworks for assessing their MFI’s issue. All nine teams presented their case studies in capital markets workshops, and three finalist teams were selected to present on stage to nearly 300 conference attendees. First place was awarded to the team working with FINDESA, the largest MFI in Nicaragua, who provided creative recommendations for new capital markets instruments Findesa should consider in order to meet its capital needs. FINDESA received three months of pro bono advisory services from Morgan Stanley’s Microfinance group, who advised the MFI on its regionalization and growth strategy.

The Impact

At the conference, microfinance managers had the opportunity to discuss best practices and collaborative opportunities for accessing the capital markets and growing the microfinance industry as well as the MFI-Morgan Stanley team case studies. “We felt we were a winner before the results of the contest were revealed because Morgan Stanley’s team provided us with so many innovative financial solutions to meet our business needs,” said Gabriel Solorzano, Chairman of FINDESA. “These Morgan Stanley teams represented outstanding performers at the Firm who wanted to apply their commercial skills to a strategic challenge with a social mission,” said Linda Riefler, Morgan Stanley’s Chief Talent Officer. “In addition to providing capital markets insights into their microfinance institution partners, our employees gained valuable experience working on cross-divisional teams, managing a client relationship and learning first hand about emerging market dynamics.”

About the Women’s World Banking

Women’s World Banking is a global network of 54 microfinance providers and banks, working in 30 countries to bring financial services and information to poor entrepreneurs. The network serves 11 million micro-entrepreneurs directly and another 10 million indirectly through its bank partners and others. The network is supported by a global team based in New York which delivers expertise in product design and distribution, access to capital markets, and customer insight. For more information about WWB, visit www.womensworldbanking.org.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 33 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.