Worst Instincts


The BadSaying it had “fulfilled current partner commitments,”
Unitus, a 10-year-old microfinance nonprofit, abruptly shut down July 2 and
laid off all 45 employees in its three locations: Seattle, India and Kenya. It
released a statement saying its remaining resources would be redirected to “new
early-stage poverty-focused philanthropic activities.”

Why the shutdown? Well, the company—er, nonprofit—had been
focusing mostly on offering management consulting services to microfinance
groups, but it also had $11.3 million in assets when it closed down and had
spun off a for-profit investment bank and two for-profit equity funds. One of
those funds, Elevar Equity II, raised $70 million in March. The other, Unitus
Equity Fund, had invested $6 million in SKS Microfinance Ltd., India’s largest
microfinance lender, which went on to net $358 million in an initial public
offering later in July.

So while questions remain about the shutdown
of Unitus—and whether a for-profit model is even appropriate for microfinance
organizations—one thing is clear: it wasn’t for lack of money. Quite the
opposite. Perhaps Unitus’ board just realized where the big money really was to
be found.

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