We started by noting Compartamos’s outsize return on equity above 50 percent in 2004. The return compares very favorably with Citigroup’s 2004 return on equity of 16 percent, for example. Table 3 shows that the median return on equity for nongovernmental microfinance organizations is 3 percent and, for microfinance banks, 10 percent. The figures are impressive, but well below returns for either Citigroup or Compartamos in 2004. The numbers are larger, though, when we condition on profitability (columns 4, 8, and 12; here the returns to equity are and ). The data show the.
