Written by Xavier Giné and Dean Karlan published May 2009 as a cooperative effort by Financial Access Initiative and Innovations for Poverty Action, 37 pages, available at:
http://financialaccess.org/sites/default/files/GroupversusIndividualLend…
and
http://poverty-action.org/sites/default/files/GroupversusIndividualLendi…

This study, which took place in Caraga, Philippines, used two separate experiments to perform a comparative analysis of the respective merits of a group-liability lending scheme in contrast to an individual-liability one. A group-liability scheme is thought to be a “collateral replacement” in that members put social pressure on each other and even help each other repay if necessary for the reason that no one in the group can receive further loans from the bank if even one person defaults. An individual-liability scheme has no such mechanism, thus making people without collateral, like those in this experiment, seem like credit risks. Continue Reading »

MICROFINANCE EVENT: The Central Bank of Brazil’s Financial System Organization Department Hosts The I Central Bank Forum on Financial Inclusion as Part of the Department’s Financial Inclusion Project; November 16-18, 2009 in Salvador, Brazil

Event Name: The I Central Bank Forum on Financial Inclusion

Event Description: Microfinance seminars centered around forging “joint partnerships” with the goal of a “sustainable and inclusive financial system”

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

Summary of Event: The 16th-17th will consist of workshops and lectures by experts on technical microfinance aspects. The 18th will provide opportunities for players in the microfinance sector to hold meetings with the intention of creating “partnerships and projects” Continue Reading »

Written by Dean Karlan and Jonathan Zinman published July 2009 as a cooperative effort by Financial Access Initiative and Innovations for Poverty Action, 33 pages, available at:
http://financialaccess.org/sites/default/files/Expanding%20Credit%20Access%20Manila.pdf
and
http://poverty-action.org/sites/default/files/expandingaccess_manila_jul09.pdf

This paper examines the effect of the extension of micro credit in Manila, Phillipines. The people who received loans, or the treatment group, were selected randomly from a group of first-time applicants deemed “marginally creditworthy” based on personal financial data. Those not randomly selected, the control group, did not receive loans. Loans ranged from 5,000 to 25,000 Philippines Pesos (PHP), the equivalent of over USD 100 to over USD 500, and were of individual-liability. The survey took place at the end of one year, and referenced the month just prior. Continue Reading »

BlueOrchard [1], a commercial microfinance investment intermediary based in Switzerland, has, through its Private Equity fund, invested Rs 500 million (the equivalent of over USD 10.2 million) in the equity of Asmitha Microfin Limited [2], a Microfinance Institution (MFI) based in Hyderabad, India. This was announced in a press release [3] available on the Asmitha website. Microcapital covered the relationship between these two organizations in October of 2008 when BlueOrchard made an initial equity investment in Asmitha of USD 5.3 million intended to “expand [the MFI's] capital base and bolster its borrowing capacity” [4]. According to Dr. Vidya Sravanthi, Chairperson and Managing Director of Asmitha, the MFI hopes to use the newest investment to “[expand] its operations deeper into the Indian rural markets and offering its services to many more of the under-served poor in these regions” as well as move toward “growth targets” set by Blue Orchard [3]. Continue Reading »