MICROCAPITAL BRIEF: FMO, Proparco Lend $30m to BPR to Serve More SMEs via Larger Branch Network, Digital Banking

The Entrepreneurial Development Bank, a government-backed institution also known by its Dutch acronym FMO, and Proparco, a subsidiary of the French government’s Agence Française de Développement (AFD), each recently loaned USD 15 million to Banque Populaire du Rwanda (BPR), a unit of the British Virgin Island’s-based Atlas Mara Group. Proparco served as

MICROCAPITAL BRIEF: Cooperative Bank of Vietnam (Co-opBank), Développement international Desjardins (DiD) Supporting People’s Credit Funds in Improving Products for Agricultural, Other Rural Clients

The Cooperative Bank of Vietnam (Co-opBank), whose mission includes promoting “social economic development in agricultural and rural area[s]” of Vietnam, recently began implementing a project with the support of Développement international Desjardins (DiD), a unit of Canadian cooperative Desjardins Group, intended to improve the tailoring of financial products to the needs of people in

SPECIAL REPORT: Clients Come Clean on Sneaking Contraception, Practitioners Move from Serving Women to Empowering Households as European Microfinance Week Closes

During the closing day of European Microfinance WeekEuropean Microfinance Week 2017, Imran Matin of the US-based nonprofit Innovations for Poverty Action (IPA) stressed the importance of not just whether women will use financial services, but “what account ownership will translate into in terms of achievement.” Foreshadowing a theme of the session, he added that “intra-household dynamics is very important and also particularly difficult to measure.”

Bdour Al-Hyari of Jordan’s Microfund for Women (MFW) described a long-running insurance product offered by her microfinance institution (MFI). The coverage provides cash to clients who are hospitalized or have a family member who is. While health issues were a major cause of default in the past, women who got “hospital cash” from MFW reportedly repaid their loans at a rate of

SPECIAL REPORT: Zemidjam Motorbike Drivers in Benin, Civil Service Retirees in Senegal Participate in Human-centered Design of Mobile Money Products

During the closing day of European Microfinance Week, European Microfinance Week 2017 Karima Wardak of the UN Capital Development Fund argued that copying digital financial services from country to country is not working. The same is true of country-specific “products that were designed in board room,” she said. Gilda Zarate Chabluk of Innate Motion, a consultancy with staff in 27 countries, launched the discussion of how concepts of human-centered design can sidestep these problems. All staff involved in a project should observe and talk to end-users early in the design process. She suggests a meeting at the home of the end-user that lasts about two hours, with most of that time focused on the user’s life rather than the product. The idea is to create the product with the users not for the

MICROCAPITAL BRIEF: Telma Introduces Mvola Mobile Loans, Savings in Madagascar

Telma Mobile, a Madagascar-based telecommunications company, recently rolled out the Mvola Avance and Epargne products, which offer loans and savings services, respectively, through the pre-existing Mvola mobile money service. With Mvola Avance, customers can borrow from MGA 1,000 to MGA 500,000 (USD 0.30 to USD 157) for

MICROCAPITAL BRIEF: MFI in Bosnia and Herzegovina Borrows from Dual Return Vision Microfinance Fund

A microfinance institution (MFI) in Bosnia and Herzegovina borrowed a portion of the equivalent of USD 47 million that C-Quadrat Asset Management, a unit of Austrian fund manager C-Quadrat, disbursed during November via the Dual Return Vision Microfinance funds. The other borrowers are located elsewhere in Europe as well as Latin America and

SPECIAL REPORT: Finding Markets First, Adding Value Post-harvest to Engage Youth in Agriculture

At European Microfinance Week on Thursday,European Microfinance Week 2017 Ken Lohento of the Netherlands-based Technical Center for Agricultural and Rural Cooperation described successes engaging youth in agriculture through technology, even those with limited literacy. This can take the form of business tools to track spending or marketing as well as apps that help with pest management, for example. Even older “feature phones” can be used to receive information on markets and tips to optimize production. Among other efforts, Mr Lohento cited Agribusiness TV, which provides mobile-optimized video examples of youth profiting from agriculture, and a service in Senegal that connects owners of underused land with young people looking for acreage to till.

Dr Jonathan Agwe of the UN’s International Fund for Agricultural Development (IFAD) stated that youth rarely are motivated to engage in the planting and weeding of primary agriculture. “Certain elements of the value chain are more interesting to youth than others,” he said. Youth are more interested in secondary activities that are less labor-intensive, such as using machinery to process crops or vehicles to get products to market. Dr Agwe suggests first “locating a market that is paying premium prices” and then

MICROCAPITAL BRIEF: Mastercard, Financial Sector Deepening (FSD) Uganda Partnering on Digital Payments for Agriculture, Education, Health and Trade

Mastercard, a US-based payment processing company, and Financial Sector Deepening (FSD) Uganda, an affiliate of the nonprofit FSD Africa, recently entered a memorandum of understanding to create

SPECIAL REPORT: Registering Property, Charging Up to 3% Monthly Interest, Promoting Local Currency for Housing Loans at European Microfinance Week

At European Microfinance Week 2017the session titled “Building an Enabling Environment for Low-Income Housing Finance,” R V Verma, former Chairman of the National Housing Bank (NHB) (India) and consultant to the the World Bank Group, said that “pushing the formal financial system to reach out to the informal sector [presents] a lot of challenges, but also huge opportunities. As part of financial inclusion, housing microfinance has a very important role.” Mr Verma went on to describe the market in India, which has an outstanding mortgage balance of INR 13 trillion (USD 200 billion) but a shortage of 24 million housing units. He also explained efforts to mitigate risk for housing lenders – both credit risk and issues with land title. Among the tools in use is a central registry of outstanding property loans. Mortgage insurance is also available even to informal workers – when lenders are willing to issue them loans.

Adedeji Adesemoye of the Central Bank of Nigeria described his institution’s efforts to address Nigeria’s shortage of 17 million housing units via resources including a loan package of USD 300 million awarded by the World Bank’s International Development Association (IDA) in 2012. While much of this package was for refinancing mortgages, USD 15 million of it was earmarked for housing microfinance. That portion was disbursed to nine microfinance institutions to test lending to existing (non-housing) clients for land acquisition, incremental construction and

SPECIAL REPORT: Cooperativa de Ahorro y Préstamo Tosepantomin (Mexico), Winner of the 2017 European Microfinance Award

From the European Investment Bank: The 2017 European Microfinance Award honours a microfinance institution, based in a developing country, that implemented innovative solutions to support access to better quality residential housing for low income, vulnerable and excluded groups, with no or limited access to housing finance in the mainstream sector.

The Cooperativa de Ahorro y Préstamo Tosepantomin helps marginalised rural Mexican communities with their residential housing building projects by offering savings and home loan products paired with technical support. The cooperative is also recognised for its promotion of eco-friendly building techniques.

This award, a EUR 100,000 prize from the Directorate for Development Cooperation and Humanitarian Affairs of Luxembourg’s Ministry of Foreign and European Affairs, was given at a ceremony held at the European Investment Bank, in the presence of Their Royal Highnesses the Grand Duchess and the Hereditary

SPECIAL REPORT: Scaling Up Implementation of Social Performance Management at European Microfinance Week

On European Microfinance Week 2017the first day of conference sessions at European Microfinance Week, experts in the social performance of microfinance institutions (MFIs) discussed how tools developed over the last ten years have reached a level of maturity warranting their wider rollout.

Cecile Lapenu of France-based Cerise described SPI4, the fourth iteration of a set of Social Performance Indicators intended to simplify reporting and provide a common language for different stakeholders to discuss social performance management (SPM). SPI4 incorporates the Smart Campaign’s Client Protection Principles and the Social Performance Task Force’s Universal Standards for SPM. It also includes optional modules on poverty, gender and the environment. To date, 432 SPI4 audits have been completed on institutions in 88 countries.

Jurgen Hammer of the Luxembourg-based Grameen Credit Agricole Foundation explained his organization’s use of the SPI4/ALINUS (Aligning Investors’ Due Diligence to the Universal Standards) framework to evaluate and benchmark the social performance of its partner MFIs. The foundation was meeting or exceeding the benchmark data in all categories except

SPECIAL REPORT: Rural Outreach and Innovation Action Group Highlights Apps, Soil Test Kits, Funding Agricultural Cooperatives

On European Microfinance Week 2017the first afternoon of European Microfinance Week, the European Microfinance Platform’s (e-MFP’s) Rural Outreach & Innovation Action Group presented a range of services that are reaching rural areas today.

Amsalu Alemayehu of Ethiopia’s Wasasa Microfinance explained that his organization has been financing agricultural cooperatives for about five years and how this can be an efficient method for serving a large number of people. However, the number of cooperatives Wasasa serves remains small. Mr Alemayehu explained that many of the 78,000 cooperatives in Ethiopia are member-managed and need significant capacity building to become creditworthy.

Marina Kortenbusch of Switzerland’s Business & Finance Consulting (BFC), who is also the chair of the Action Group, spoke passionately about

MICROCAPITAL BRIEF: Australian Government Introduces $30m “Emerging Market Impact Investment Fund” Targeting Small, Medium-sized Enterprises (SMEs) in Asia-Pacific

The Australian government recently launched a facility called the Emerging Market Impact Investment Fund (EMIIF) in an effort to support “positive social and development outcomes for poor communities in the Asia-Pacific.” The fund, which will execute loans, equity placements and guarantees, has an allocation of AUD 40 million (USD 30 million) phased over the period 2017 to 2021. It will invest in parcels of at least AUD 2 million (USD 1.5 million) in other funds that support small and medium-sized enterprise (SMEs) with a particular emphasis on SMEs managed by women. Entities that will serve as trustee and fund manager for EMIIF have yet to be named.

By Ryan Gauthier, Research Associate

Sources and Additional Resources

Direct contact with Australia’s Department of Foreign Affairs and Trade (DFAT)

Press release:
https://foreignminister.gov.au/releases/Pages/2017/jb_mr_171114.aspx

EMIIF
http://www.dfat.gov.au/emiif

Financial Standard article:
http://www.financialstandard.com.au/news/government-launches-emerging-market-impact-investment-fund-106884329

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SPECIAL REPORT: European Microfinance Week Opens: Microfinance and Environment Action Group Celebrates Rollout of Solar Products in Central America, Ethiopia, Philippines; Turns Eye to Scaling Up

On European Microfinance Week 2017the opening day of European Microfinance Week, the European Microfinance Platform’s (e-MFP’s) Microfinance and Environment Action Group met to review its successes and make plans for the next two years.

Carla Palomares of ADA, the Luxembourgish nonprofit formerly known as Appui au Développement Autonome, explained her organization’s work with the 60-member Microfinance Council of the Philippines (MCPI) and Red Centroamericana y del Caribe de Microfinanzas (REDCAMIF), a network of networks serving 139 microfinance institutions (MFIs) in the Dominican Republic and six Central American countries. ADA helped MCPI develop a team dedicated to supporting its member MFIs in offering loans for clients to buy solar lamps. MCPI is now working with six additional MFIs to roll out solar loans. The program with REDCAMIF is similar, but involves microleasing for agricultural equipment and support regarding environmentally sustainable farming practices as well as

MICROCAPITAL BRIEF: Uganda Launches 5-year National Financial Inclusion Strategy

The Bank of Uganda, the country’s central bank, recently partnered with Uganda’s Ministry of Finance, Planning and Economic Development to create the Uganda National Financial Inclusion Strategy 2017-2022. The framework focuses on improving

MICROCAPITAL BRIEF: Opportunity International EduFinance, FINCA Microfinance Bank Nigeria to Offer Education Loans to Students’ Families, Schools

FINCA Microfinance Bank Nigeria, an affiliate of the US-based Foundation for International Community Assistance (FINCA International), recently partnered with Opportunity International (OI) EduFinance to lend money for

MICROCAPITAL BRIEF: IFC, KfW, OeEB Renew $310m in Commitments to Microfinance Enhancement Facility (MEF)

The Microfinance Enhancement Facility (MEF), which was established in 2009 to provide liquidity to microfinance institutions (MFIs), recently negotiated an extension until 2025 of its investments from the World Bank Group’s International Finance Corporation (IFC) and the development banks of Germany and Austria. These investments total USD 310 million out of MEF’s total assets of approximately USD

MICROCAPITAL BRIEF: Zambia Introduces National Financial Inclusion Strategy with Support from World Bank Group

The government of Zambia recently initiated a National Financial Inclusion Strategy with support from the World Bank Group (WBG), a multilateral institution seeking to improve the living standards of people in developing countries. The strategy is linked with a Financial Sector Development Policy and a Financial Capability Survey Report in an effort to promote “universal access” to a greater diversity of financial products. The Finance Minister of Zambia, Felix Mutati, said of the strategy,