An article in the Hindustan Times reports that a growing number of microfinance institutions (MFIs) are lending to rickshaw operators and competing with local dealers, owners who rent their rickshaws to pullers. This growth is fueled by the fact that many dealers are obtaining very high returns on investment (up to 84 percent per annum), while MFIs are offering cheaper loans and promoting ownership.  Continue Reading »

Legatum Capital, a private firm that invests in global capital markets and social development initiatives, announced that it has invested USD 8.4 million (INR 34 crore or 340 million) in Intellecap, a company based out of Mumbai and Hyderabad, India which provides business advisory services to investors and organizations seeking both financial and social returns on investments. Among the services offered by Intellecap is Intellecash, a microfinance best practices franchise package that, according to the website, provides franchisees “with the information, systems, and processes that are required to start and manage profitable microfinance operations.” This is India’s first microfinance franchising initiative. Continue Reading »

Enam Financial, a leading Indian financial service provider, has picked up a ten percent stake in A.Little.World, a company which integrates a microfinance model with a new multi-bank payment system in order to bring mainstream banking capabilities to the large population of un-banked rural Indians. The amount of investment was not disclosed. Continue Reading »

The DOEN Foundation, the Dutch charitable fund and co-founder of microfinance investment firm Triodos-Doen Foundation, will provide a USD 200,000 grant to aid the establishment of the International Association of Microfinance Investors (IAMFI), according to Program Manager of Financial Sector Development at DOEN Jeroen Loots. The IAMFI is an organization that will seek to increase investment in microfinance from the private sector by disseminating credible industry data, drawing responsible investors, establishing best practices, and exploring opportunities to influence public policy.

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The DOEN Foundation, an Amsterdam-based charitable organization which supports numerous microfinance and entrepreneurial projects, has approved a grant totaling USD 300,000 to Kiva Microfunds for further development of the organization, according to Jeroen Loots, Program Manager of Financial Sector Development at DOEN. Kiva is the first non-profit organization to allow microfinance institutions (MFIs) to raise interest-free capital directly from social investors via the Internet. Individual lenders can provide funding in increments as small as USD 25 and receive repayment of the principal at the end of the loan term, which typically runs between six and 12 months. Repayment rate on loans stands at 99.8 percent. Continue Reading »

A new index commissioned by multilateral financial institutions Inter-American Development Bank (IADB or IDB) and Andean Development Corporation (Corporación Andina de Fomento or CAF) debuted in El Salvador at the 10^th Inter-American Microenterprise Forum (October 3-5). The IDB and CAF commissioned the index, called “Microscopio” or “Microscope,” from the Economist Intelligence Unit (EIU), a specialized service of The Economist that provides country, industry and management analyses. Microscope uses 13 criteria relating to investment climate, regulatory framework and degree of institutional development for microfinance to rate the favorability of conditions in a country for microfinance. The index is designed to allow for comparison between countries and analysis of the strengths and weaknesses of the business climate for microfinance in each country. Continue Reading »

The International Finance Corporation (IFC), a member of the World Bank Group, and Westpac Banking Corporation, the fourth largest bank in Australia, are sponsoring a four-day workshop designed to encourage micro-lending to women business-owners in developing countries. International women bankers gathered in Sydney, Australia on October 2 to exchange global best practices on serving women entrepreneurs. Attendees included representatives from several of IFC’s client financial institutions: Exim Bank Limited (Tanzania), Access Bank (Nigeria), dfcu Limited (Uganda), Business Partners (South Africa), and MI-BOSPO (Bosnia). Continue Reading »

First MicroFinanceBank Limited (FMBL), the first NGO turned microfinance institution in Pakistan, and Pakistan Post, the premier national postal communication service, officially agreed to work together on October 2, 2007. Prime Minister of Pakistan, Shaukat Aziz, and other prominent figures from government and business attended the signing ceremony. This public-private partnership is a milestone for microfinance in the country because it has the potential to address the issue of inaccessibility to poor clients. First MicroFinanceBank will use its 82 branches, combined with the 4,000 sub-offices of the Pakistan Post, to provide financial services to clients in urban areas, as well as remote rural areas. The participants estimate that this partnership will result in disbursement of PKR 15 billion (USD 247 million) to millions of clients in the next three to five years. Continue Reading »

The Alliance for Christians in Development (ACID) Trust, a non-governmental development organization based in Uganda which, among other projects, provides microfinance services to rural women and youth, will be extending micro loans to parents who cannot afford to pay their children’s school fees. Typically, fees cost about USD 35 per term. A September 2006 report (pg 4) by Save the Children indicated that 1.1 million primary-aged children in Uganda are out of school, the majority because they cannot afford uniforms, books, and basic supplies. Under ACID Trust’s program, the plan is that parents will borrow from the trust interest-free, invest the money to make a profit, pay back the loan and save the remainder to put toward their children’s education. Funds are not only available to parents, but to children–specifically the large population of orphans in the country. Continue Reading »

The Central Bank of Nigeria (CBN) has approved the conversion of the Olabisi Onabanjo University Community Bank Limited into a microfinance bank. The community bank has operated on the campus of Olabisi Onabanjo University in Ago-Iwoye, Nigeria since March of 2003, and the majority of its shareholders are affiliated with the university. One source reports that, in its first year in business, the bank made a surplus that was “far in excess of its total paid up capital,” but no other sources were found to corroborate this information and no further information was found on the OOU Community Bank.
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The International Finance Corporation (IFC), a member of the World Bank Group, announced plans to work with Blue Financial Services Group, a publicly traded African financial services company with over 100 branches in seven countries, on a pilot HIV/AIDS awareness and prevention program in Botswana, South Africa, and Zambia. A statement released by the IFC explained that the program will target small companies and local communities, seeking to preserve jobs and businesses by integrating traditional financial services with HIV/AIDS prevention. According to the press release, the IFC will help develop financial products, while Blue Financial Services will use its broad branch network in the three countries to deliver information and prevention services to staff, clients and communities.

The IFC, established in 1956, is now made up of 179 member countries which provide its capital, determine its policies, and approve its investments. In 2006, the IFC received a rating of Aaa, which suggests the highest quality investment grade, with minimal credit risk, from Moody’s Investor Services, a private company that performs financial research on commercial and government institutions. That year, according to Moody’s, the IFC’s assets totaled USD 28.49 billion, its return on assets (ROA) was 4.33 percent, and its return on equity (ROE) was 11.23 percent. As of February 2007, Blue Financial Services Group reported USD 573 million in total assets and USD 140 million in total liabilities.

By Elizabeth Nelson, Research Assistant

Additional Resources:

International Finance Corporation (IFC) Press Release: “IFC and Blue Financial Services Help Small Businesses and Local Communities in Botswana, South Africa, and Zambia Fight HIV/AIDS”

Microfinance Gateway: “African Consumer Finance Firm To Combine Access to Finance With HIV/AIDS Prevention”

International Finance Corporation (IFC) General Inquiries
IFC Corporate Relations
Tel: 202.473.3800

Blue Financial Services Group

World Bank Group

Moody’s Investor Services Contact Info

Moody’s Investors Services: “Credit Opinion, International Finance Corporation” (pg 1)

Blue Financial Services: “Annual Financial Statements” (pg 86- ‘Balance Sheet’)

will use its broad branch network in the three countries to deliver information and prevention services to staff, clients, and communities. Continue Reading »