Elizabeth Nelson
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Thursday, January 10, 2008

MICROCAPITAL STORY: World Bank Approves $30m Grant to Microfinance Institutions in Afghanistan Provided by International Development Association (IDA)

The World Bank has approved a USD 30 million grant to microfinance providers in Afghanistan under the Expanding Microfinance Outreach and Improving Sustainability Project. The project is designed to scale up financial outreach to poor people, particularly women, across Afghanistan and to increase the financial self-sufficiency of microfinance institutions (MFIs). Continue Reading »

Wednesday, January 9, 2008

MICROCAPITAL STORY: Pakistan Trade Association Sialkot Chamber of Commerce and Industry (SCCI) to Offer Microfinance Services

Dr. Khurram Anwar Khawaja, president of Pakistan trade association Sialkot Chamber of Commerce and Industry (SCCI), recently announced that the organization is actively considering introducing micro-credit loans into its repertoire of financial services. Dr. Khawaja stated that the objective of the micro-loans is to reduce unemployment by encouraging entrepreneurship. Continue Reading »

Friday, January 4, 2008

MICROCAPITAL STORY: Uganda’s Construction Sector Suffers from Soaring Interest Rates, Microfinance Institutions (MFIs) May Hold the Key

African Alliance, a group which provides investment banking services across the African continent, recently released a report on Uganda’s construction sector which found that, despite unprecedented growth, the industry is being threatened by financial risk. To mitigate the likelihood of default, most financial institutions charge construction firms high interest rates coupled with short repayment periods. However, the increasing number of players, particularly microfinance institutions (MFIs), is expected to help drive down interest rates. Continue Reading »

Monday, December 31, 2007

MICROCAPITAL STORY: Standard Chartered Joins Rural Microfinance Campaign

Standard Chartered (Stanchart) Bank recently announced that it would launch its first microfinance program in China. The program will initially provide working capital loans, without pledge or guarantee, to local cotton farmers. The loans will be disbursed to farmers through an entrustment loan arrangement with the local Awati Credit Cooperative. The maximum loan size is intended to be CNY 15,000 (USD 2,050). This marks the first time that a foreign bank has established a complete microfinance program which lends directly to farmers in China. Continue Reading »

Thursday, December 20, 2007

MICROCAPITAL STORY: Microfinance Debate Featured on BusinessWeek.com, Vikram Akula of SKS Microfinance and Chuck Waterfield of Microfin Weigh In

Following an article in the December 13 edition of Business Week entitled “The Ugly Side of Microlending,” Business Week’s website now features a point-counterpoint which asks the question: Does microfinance helps low-income entrepreneurs in developing economies more than it hurts them? Vikram Akula of Indian microfinance bank SKS Microfinance Private Ltd. argues in favor of the proposition, while Chuck Waterfield of Microfin argues that the banks are generally more harmful than beneficial to low-income entrepreneurs. The core issue of the debate centers on whether the banks are usurious in the interest rates they charge. Continue Reading »

Wednesday, December 19, 2007

MICROCAPITAL STORY: Equity Bank of Kenya to Expand Microfinance Services to Uganda, Tanzania and Rwanda Backed by Investment from Helios EB

James Mwangi, CEO of Kenya-based Equity Bank, recently announced that the bank will use the proceeds from the sale of 25 percent ownership (valued at KES 11 billion or USD 175.7 million) of the bank to investment group Helios EB to expand its operations to other countries in East Africa. The bank plans to open subsidiaries in Uganda, Tanzania and Rwanda by August 2008. The bank believes this expansion will allow it to compete against the dominant players in the region: multinationals such as Barclays and Standard Chartered, as well as local Kenya Commercial Bank. Mr. Mwangi stated that he is confident that the expansion will allow the bank to double its customer base over the next five years. Continue Reading »

Tuesday, December 18, 2007

MICROCAPITAL STORY: European Bank for Reconstruction and Development (EBRD) and Developing World Markets (DWM) Provide Tajik Farmers with Microfinance via Loans, New Facility

In an effort to boost Tajikistan’s economy, the European Bank for Reconstruction and Development (EBRD) will facilitate lending USD 7.2 million to two Tajik banks in order to extend microfinance loans to the agricultural sector. These will be the first syndicated loans in Tajikistan. The financing, provided under the new Tajik Agricultural Finance Framework (TAFF), will allow small farmers, many of whom have never received a loan before, to purchase farming equipment and other supplies. Continue Reading »

Monday, December 17, 2007

MICROCAPITAL STORY: Nigerian Deposit Insurance Corporation (NDIC) Insures Microfinance Institutions

The Nigeria Deposit Insurance Corporation (NDIC) recently announced that, beginning January 1, 2008, it will extend deposit insurance services to microfinance institutions (MFIs) operating in the country. Managing Director and Chief Executive of the NDIC, Mr. Alhaji Ganiyu Ogunleye, said that the corporation will extend coverage of NGN 100,000 (USD 850) per depositor. Continue Reading »

Friday, December 14, 2007

MICROCAPITAL STORY: CGAP-Supported Global Microfinance Consumer Protection Campaign Launched in Ghana by GHAMFIN and SPEED Ghana

The Ghana Microfinance Institutions Network (GHAMFIN) and SPEED Ghana have teamed up to launch a consumer education and protection (CEP) campaign that specifically targets customers of the country’s microfinance sector. The campaign, a global initiative promoted by the Consultative Group to Assist the Poor (CGAP) and the Small Enterprise and Education Promotion Network (SEEP), seeks to ensure that clients are treated fairly and with respect by financial institutions. Continue Reading »

Tuesday, December 11, 2007

MICROCAPITAL STORY: Study Reveals Microfinance Investment Support Facility for Afghanistan (MISFA) Has Created 659,000 Jobs Since Inception

The Microfinance Investment Support Facility for Afghanistan (MISFA) has released a Baseline/Impact Study which it commissioned in order to 1) establish a baseline database of clients, 2) measure the impact of the microfinance program in Afghanistan since its inception and 3) set up a few key socio-economic indicators that microfinance institutions (MFIs) could monitor to track the well-being of their clients. Following its initial release in September, the survey was presented to key stakeholders, including the Afghan Government, the World Bank, MISFA management and key donors and MFI partners. Continue Reading »

Thursday, December 6, 2007

PAPER WRAP-UP: Microfinance Market Survey in the West Bank and Gaza Strip

Published by International Finance Corporation (IFC) in cooperation with the Palestinian Network of Small and Micro Finance (PNMSF). Conducted by PlaNet Finance. Copyright 2007, 79 pages, available for download at http://www.microfinancegateway.org/content/article/detail/44378

The goal of this report is to gauge the demand for microfinance among Palestinian micro entrepreneurs. The report finds that, overall, Palestinian entrepreneurs lack access to financial services, and, if given the opportunity, many would utilize microcredit in order to expand existing businesses, generate working capital, launch new businesses and finance assets. The report estimates the likely market potential at approximately USD 157 million, but notes that it could be as high as USD 280 million. Continue Reading »

Wednesday, December 5, 2007

MICROCAPITAL STORY: Global Non-profit Microfinance Network Opportunity International Launches Microschools for Opportunity

Opportunity International, a Christian microfinance organization, has announced the expansion of its microfinance school loans program “Microschools for Opportunity.” “Microschools” provides loans to “edupreneurs” who open schools in poor neighborhoods where children, especially girls, would otherwise be unable to access public education. As of June 2007, the Opportunity International Network had over one million active clients globally and a loan portfolio of USD 450.2 million. As of December 2006, the organization had USD 31.7 million in total assets and USD 534,000 in total liabilities. Continue Reading »

Monday, December 3, 2007

PAPER WRAP-UP: How Many MFIs and Borrowers Exist?

Originally published by Microfinance Information eXchange (MIX), August 2007, updated September 2007, available at http://www.themix.org/publication_detail.aspx?publicationID=27

In this report, the Microfinance Information eXchange combines data from their own sources (MIX Market, MicroBanking Bulletin), the MicroCredit Summit Campaign (MCS) and Inter-American Development Bank (IDB) to provide detailed information on the number of microfinance institutions (MFIs) and the number of microfinance borrowers in developing markets. Continue Reading »

Thursday, November 29, 2007

MICROCAPITAL STORY: State-owned Indian Bank of Baroda (BoB) Partners with Centre for Micro Finance (CMF) for Microfinance Initiative in Dungarpur

As part of its initiative to reach the unbanked Indian population with microfinance, state-owned Bank of Baroda (BoB) has signed a memorandum of understanding (MoU) with the Centre for Micro Finance (CMF), a microfinance research institute. As of March 2007, the Bank of Baroda had 38,000 employees and 2,700 branches in 21 countries. It had USD 36.4 billion (INR 143,146 crore or 1.43 trillion) in total assets and a return on assets (ROA) of 0.72 percent. Continue Reading »

Monday, November 26, 2007

MICROCAPITAL STORY: Indian Bank to Open Four New “Microstate” Microfinance Branches

Indian Bank, one of the largest public sector banks in India, recently announced its plans to open four additional branches exclusively for microloans across India by the end of 2007. These “Microstate” branches will be opened in Bhubaneswar, New Delhi, Pune and Bangalore and will augment the 12 existing Microstate branches which have already credit-linked approximately 230,000 self help groups (SHGs) to USD 388 million (INR 1545.48 crore). In addition to providing credit to the urban poor, the Microstate banks provide non-credit services such as training, counseling and marketing assistance. Continue Reading »

Wednesday, November 21, 2007

MICROCAPITAL STORY: Small Fund for Big Loans: European Union Announces Plans to Establish EUR 15m “Microfinance Fund” for EUR 25k Loans to European Businesses

The fashionable status of microfinance makes it increasingly challenging to define. The European Union announced a new 15 million Euro fund providing 25,000 Euro loans to small businesses in Europe and has labeled it “microfinance.” Traditionally, “micro” has only been used for loans under a few thousand Euros in the poor world, whereas loans to small businesses in the rich world were called “Small Business Loans.” The popularity of microfinance has changed all that. Continue Reading »

Tuesday, November 20, 2007

MICROCAPITAL STORY: Opportunity International Australia Raises $30m to Supply One Million Indian Entrepreneurs with Microfinance

Opportunity International Australia, part of the global non-profit microfinance network Opportunity International, has raised USD 30 million from Australian donors in the last 12 months. The organization will use the funds to supply loans and business services to micro-entrepreneurs across India. Continue Reading »

Monday, November 19, 2007

MICROCAPITAL STORY: Jamaican Diaspora and USAID Team Up to Launch Microfinance Fund for Inner City Residents

Jamaica’s Diaspora community and the United States Agency for International Development (USAID) are partnering to launch a microfinance loan fund for Jamaicans living in inner cities. To date, approximately USD 100,000 has been raised from Diaspora interests in the United States for the proposed Fund for Inner City Sustainable Transformation (FIST). Continue Reading »