Indian public sector banks (PSBs) are expecting a rise in stressed accounts (accounts with delays in repayments of principal and/or interest) this year, according to a press release on The Hindu Business Line, an Indian Business daily. These stressed assets are reportedly arising mainly due to refinancing extended to self-help groups (SHG) and microfinance institutions (MFIs) which in turn had primarily extended credit to rural areas. The deficit in monsoon in several parts of the country this year resulting in poor yields for the drought-hit farm sector has been indicated as one factor largely contributing to these stressed assets. An associated reason cited for the NPAs is that some loans were taken for meeting lifestyle expenditure in rural areas, even where the loans are availed for capital expenditure and for setting up trade units. Elaborating on these factors, Mr. Collin Timms, Chairman of the Guardian Souharda Sahakari Bank, an MFI in India, says, ‘the direct impact of drought is the temporary migration of population away from the affected areas. The migration creates a disruption in loan payments’. Continue Reading »

Event Name: Microfinance Investor’s Fair 2009

Event Date: October 21-22, 2009

Event Location: Nairobi, Kenya, Hotel Intercontinental

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Event Name: VIII National Conference: The Role of Microfinance in Overcoming the Financial and Economic Crisis

Event Date: November 17-19, 2009

Event Location: Moscow

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Nearly half of farmer households in India do not have access to credit either from the banks or other non-banking sources, said the Reserve Bank of India deputy governor Dr. K.C.Chakrabarty, speaking at a conference held recently in Chennai, India and  focused on the theme ‘Banking: Key Driver for Inclusive Growth’. In his address, Dr. Chakrabarty pointed out that as per figures published by the National Sample Survey Organization (NSSO) in 2008, 45.9 million farmer households out of a total of 89.3 million households do not have access to credit either from the institutional or non-institutional sources and that as of NSSO’s 2007 figures, a single branch caters to the banking needs of a population of about 16,000 [2]. He also pointed out that for every 100 persons, there are only 17 credit accounts and 54 saving accounts with all institutions put together. Commenting on the sources of loans, Dr. Chakrabarty added that of the people having annual income less than Rs.50,000 (USD 1100), only 28.3 percent had bank accounts, with just 13 per cent availing loans from the banks and 53 per cent people still taking loans from the institutional and non-institutional sources only for emergency purposes. He pressed that the above facts underscore the ‘urgent need’ for extending the banking and financial services to every part of the country for achieving the objective of inclusive growth and that the recent focus of the RBI has been on providing access to affordable banking services to every person. Continue Reading »

The Pakistan Ministry of Social Welfare and Special Education is working on a micro-credit scheme for disabled people in the country, according to a press release on the Nation, the Pakistani news daily [1]. The scheme, which has reportedly been given ‘top priority’ is expected to bring ‘social empowerment’ for persons with disability. The Ministry is reportedly in consultation with several banks including the Pakistan based Kushali Bank, to lay the ground work for an ‘easy way of providing loans to disabled people with a minimum interest’ [1]. In the words of the Pakistan Minister for Social Welfare and Special Education, Ms. Samina Khalid Ghurki, this scheme by the Government is an effort toward making Pakistan ‘a disabled friendly state of the world’. Ms. Gurkhi also expressed hope that these efforts would ‘bring substantial change in living standards of these [disabled] persons’ [1]. Continue Reading »

The International Finance Corporation (IFC), the private sector lending arm of the World Bank, is assisting four microfinance institutions (MFIs) in Central Asia to transform into banks or deposit-taking organizations [1], according to a press release issued by the IFC [1]. The IFC initiative, billed as the ‘Azerbaijan and Central Asia Microfinance Transformation Support Project’, is expected to help the four MFIs become more sustainable, expand their range of services and also help boost access in underserved communities in the region [1]. The MFIs benefiting from the Project are IMON International and Arvand in Tajikistan, Bai Tushum in Kyrgystan and Credagro in Azerbaijan. Aside of the implementation of microfinance best practices and transformation plans, IFC’s support also includes advisory services package in institution-building, developing a corporate strategy, and mentoring of senior management. Continue Reading »

The International Finance Corporation (IFC), the private sector lending arm of the World Bank has announced an investment of USD 5 million in FM Bank, a new microfinance bank based in Poland [1]. The investment would help the bank ‘to support the [Polish] microfinance sector and improve access to finance for micro and small businesses’. FM Bank, a spin-off from the operations of the Polish microfinance institution Fundusz Mikro, only recently received a commercial banking license and is reportedly the first microfinance bank in the country [1]. Continue Reading »

Venture Capital/ Private Equity funds in India are now looking at investments in Indian microfinance institutions (MFIs), reports The Times of India, an Indian daily owned by The Times Group [1]. The release quotes undisclosed industry observers as predicting that around INR 1000 crore (approx USD 200 million) will be invested by VC/ PE funds in the Indian microfinance space in 2009 alone. Presence of a good management structure coupled with the business scalability demonstrated by several MFIs has been indicated as some of the ‘essential elements’ favoring VC/ PE funding [1]. In addition, the social angle to the business, scope for high growth and opportunity for exit for investors are also projected as factors favorable to potential investors [1]. Continue Reading »

The Netherlands Development Finance Company (FMO) has opened a USD 5 million credit line to the Belarusian Bank for Small Business (BBSB) to primarily help develop the bank’s micro-lending program for small and medium-sized business. The loan is also expected to help in the acquisition of necessary instruments for the bank’s infrastructure development [1]. According to a news report published in the Belarusian news and information agency BelTA, the agreement to open a credit line was signed in Minsk and the line is open for five years with a two year delay in payment. No further information on the credit facility is currently available. Continue Reading »

The State Bank of Pakistan (SBP) has signed a Memorandum of Understanding (MoU) with Tameer Microfinance Bank (TMFB) under which the SBP will provide Rs 82 million (approx USD 1 million) to TMFB over a period of one year. According to a press release on the Pakistani Financial Daily Business Recorder, the funding will be provided under the Institutional Strengthening Fund (ISF), a microfinance initiative launched by the SBP [1]. (Business Recorder is a financial and business newspaper owned by the Business Recorder Group, a media conglomerate based in Pakistan). Continue Reading »

Event Name: International Microfinance Conference on Africa

Event Date: September 2-3, 2009

Event Location: Johannesburg, South Africa, Investec Bank Auditorium

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Blue Financial Services, the South Africa based microfinance institution (MFI) will remain focused on expansion in Africa and will begin operations in more African countries this year, according to a press release on AllAfrica.com. In this regard, the release quotes Blue’s CEO Dave van Niekerk as saying that Blue’s plans in Africa come despite a slowdown in the ‘pace of its expansion due to the global financial crisis.’ [1]. Per information currently available, Blue’s immediate plans also include the setting up of a branch in Ghana over the next 2 months [2]. (AllAfrica.com is a news and information portal owned by AllAfrica Global Media, a multi-media content service provider, systems technology developer and distributor of African news and information worldwide.) Continue Reading »

Event Name: Opportunity Collaboration Summit

Event Date: October 17-20, 2009

Event Location: Ixtapa, Mexico

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Banco Compartamos, a Mexican microfinance bank, announced its non-audited financial results for the second quarter ending June 30, 2009. The figures were announced in pesos and have been converted here to US dollars. The figures adhere to the requirements of the Comision Nacional Bancaria y de Valores (CNBV), the Mexican banking and securities regulator [4]. Compartamos underwent an Initial Public Offering (IPO) in April 2007, and has since been publicly traded on the Mexican Stock Exchange. The highlights of the report were the net income increase of 31 percent compared to the same quarter of last year. The result gains more significance when the global financial recession and performance of the overall banking system is taken into account. While filing the report with the Mexican Stock Exchange, the bank has stated that Net profit was Ps 327 million (USD 24.7 million), up from the Ps.249 million (USD 18.8 million) recorded in the second quarter of 2008. Earnings per Share (EPS) was Ps.0.76, up from the Ps.0.58 per share for the second quarter of 2008 [1]. Continue Reading »

Event Name: Microfinance India Summit 2009

Event Date: October 26-28, 2009

Event Location: New Delhi, India, TAJ Palace Hotel

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Event Name: TBLI 2009 Europe Conference

Date: November 12-13, 2009

Location: Amsterdam, The Netherlands, Elicium, RAI Convention Centre and Amsterdam Okura Hotel

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Following complaints of financial mismanagement by the Lira Women Savings and Credit Cooperation Society (SACCO), the Ugandan State Minister for Finance in charge of Microfinance, Ms. Ruth Nankabirwa has stated that a special team of auditors will be sent to examine accounts of the Lira SACCO. According to a press release on Monitor Online, Ms. Nankabirwa, while speaking to members of the SACCO at their Lira office, assured them that the problem would be solved [1]. In this regard, Ms. Nankabirwa was also quoted as saying that the ‘government would give the organization more money’. (Monitor Online is the online edition of the Ugandan newspaper, Daily Monitor [2]. Established in 1992 it is jointly owned by the Nation Media Group [3] and five other undisclosed individual shareholders). Continue Reading »

Event Name: MENA Microfinance Conference 2009

Date: October 26-27, 2009

Location: Amman, Jordan

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