In an attempt to further poverty reduction efforts, the Kano State Government in Nigeria will inject capital into area microfinance institutions (MFIs). The announcement was made by the State Deputy Governor at a recent Poverty Day celebration organized by the National Program to Eradicate Poverty (NAPEP). Continue Reading »

Financiera Independencia, a microfinance institution (MFI) traded on Mexican Stock Exchange, has appointed the Mexican division of Credit Suisse, a prominent international financial services firm, to serve as a market maker for the MFI’s securities. Market makers facilitate the entry and exit of investors by connecting buyers and sellers and temporarily buying or selling securities to facilitate the investors’ transactions. Continue Reading »

After a long delay, the results of the oversold initial public offering (IPO) of Tanzanian National Microfinance Bank (NMB) have been released. In the IPO, the government sold 21 percent of its 51 percent stake in NMB. A recent worker’s strike at the microfinance institution (MFI) had delayed the announcement of the IPO results, which began on August 17^th. In total, 27,473 applications were submitted to buy 374.8 million shares valued at TZS 224bn (USD 184m), far more than the actual number of available shares. The microfinance institution (MFI) will be publicly listed on the Dar es Salaam Stock Exchange starting on November 7^th. Continue Reading »

The Grameen Trust of Bangladesh, a member of the Grameen Family that helps build new microfinance institutions (MFIs) around the world, plans to open a new MFI in Mexico. Fundacion Carlos Slim, the charitable organization of Mexican billionaire Carlos Slim, will provide an initial donation of USD 5m and guarantee another USD 40m in loans, which will create the total capital base for the new MFI. The new MFI will be modeled after the Grameen Bank. It will be a non-profit using the ‘social business‘ model, which implies that it will reinvest all profits back into the operation of the company. The new MFI, which will initially target 80,000 borrowers, will be named Grameen Carso after the Mr. Slim’s business conglomerate, Grupo Carso. The company will initially be managed by the Grameen Trust, but eventually they hope to turn the company over to Mexican operators. Continue Reading »

Comat, a technology company providing services to rural India, recently raised INR 60 crore (USD 12.5m) from the Omidyar Network and the Unitus Equity Fund (UEF). According to a Business Standard article, the new investment will allow “Comat to expand to new States, accelerate service delivery for training and financial services [and] strengthen management bandwidth.” Continue Reading »

Indian Government representatives and members of industry weighed in on the role of microinsurance from a recent Confederation of Indian Industry (CII) conference. During his speech, Tarun Bajaj, joint secretary of the department of financial services and the ministry of finance, expressed his view that insurance companies should place more emphasis on microinsurance: “Microfinance will not be complete without microinsurance as one event is enough to push back an aspiring farmer into his original state.” He urged insurance companies to work with microfinance institutions (MFIs) to provide insurance to the poor. Continue Reading »

The Reserve Bank of India (RBI), the country’s central bank, is contemplating requiring that financial institutions direct at least ten percent of their total loans to medium small and micro enterprises (MSMEs). These new restrictions would come on top of the current requirements that banks devote at least 40 percent of lending to the priority sector, which includes poor and agricultural areas and industries. These current laws do not require that loans be made to enterprises of a certain size. Continue Reading »

A Little World (ALW) is a company which creates technologies used in extending branchless banking services to the poor. While ALW is a for-profit corporation, its vision is to “touch a billion people through innovative technologies and alliances at the bottom of the pyramid for delivering multiple financial services at the lowest cost through mainstream financial institutions.” Currently, the company’s main project is the ZERO platform, which provides banking technologies via mobile phones. Continue Reading »

The credit ratings assigned to corporations affect the cost of borrowing money in international capital markets. Microfinance institutions (MFIs) are no exception. As more and more MFIs look to raise money from capital markets, their credit ratings will become increasingly important in their ability to provide financial services at a low cost. Fitch Ratings is a premier international ratings agency, which has evaluated a number of MFIs around the world. This story will examine how Fitch approaches ratings of microfinance. Continue Reading »

The High Court of Tanzania ruled against the striking workers of National Microfinance Bank (NMB) in a recent decision. The strike, which lasted one day, was in response to the failure of workers to receive their lump sum benefit payments after the first round of NMB privatization in 2005. NMB claims that they cannot give the payments to workers because the government still has not transferred the money to the bank. Despite the resumption of duties, customers complained of poor service and several ATM machines ran out of money. Continue Reading »

Workers at Tanzanian’s National Microfinance Bank (NMB) have gone on strike after not receiving a lump sum benefit payment that was supposed to be paid to NMB by the government after an initial round of privatization in 2005. NMB’s management, who describe the strike as “illegal,” contends that the bank cannot pay the lump sum to workers because the government is yet to finalize the payment to NMB. The workers are represented by the Tanzania Union of Industrial and Commercial Workers (TUICO). Continue Reading »

The Economic Times recently reported on the growing trend of partnerships between commercial insurance companies and microfinance institutions. The insurance companies cite “saving infrastructure costs” and “creating distribution channels” as economic motivators for working with MFIs. Companies involved in such partnerships include SKS India, Bhartiya Samruddhi Finance Limited (Basix), Royal Sundaram Alliance Insurance and TATA AIG Life. Continue Reading »

On October 8-10, the Inter-American Development Bank (IDB) will host the sixth edition of the Forum on Microenterprise (FOROMIC). Aside from a general discussion on microfinance in Latin America and the Caribbean, the conference will focus on responses to international crises, rural finance, housing, technology, venture capital and the importance of networks. To learn more about this event, please read this previous MicroCapital story. Continue Reading »

GLOBAL SUMMIT ON MICROFINANCE AS AN ALTERNATIVE ASSET CLASS FOR INSTITUTIONAL INVESTORS

OCTOBER 29-30, MILLENIUM KNIGHTSBRIDGE HOTEL, LONDON, ENGLAND

The conference will focus on the opportunities and challenges for microfinance investments as the industry becomes larger and converges with mainstream financial institutions. Specific topics will include the current state of the microfinance sector, the risks and rewards for institutional investors involved in microfinance, an evaluation of rating metrics currently employed, lessons and opportunities taken from other asset classes, good governance in microfinance institutions (MFIs), and developing a universal framework for evaluating social returns. A complete agenda can be found of the conference website. Continue Reading »

ACCION International has hired Ascendant Strategy Management Group to develop performance metrics for ACCION managers. The system will be based on Ascendant’s “balanced scorecard” framework, the name for its general consulting package that it tailors to individual clients. Further specifics, including which areas of ACCION will be employing the new measurements, was not available, although it appears that ACCION’s Center for Financial Inclusion will be involved. Continue Reading »

A Little World, a technology company based in Mumbia, India, recently finished a round of funding which brought in INR 287m (USD 6.3m). The investors included the Bellwether Microfinance Fund, the India Financial Inclusion Fund and Legatum Ventures. The investments, which were facilitated by Intellecap, are intended to help build ALW’s product portfolio. ALW focuses on using banking technologies to provide low cost financial services to those at the bottom of the economic period. Continue Reading »

SNS Asset Management is a subsidiary of SNS REAAL, the fifth largest financial institution in the Netherlands. The asset management division was founded in 1997 after the merger of SNS bank and De Hollandse Koopmansbank. The firm, which is a participant in the United Nation’s Principles for Responsible Investing initiative (PRI), currently has EUR 19b in assets under management. Continue Reading »

According to the Azeri Press Association, the Micro Finance Bank of Azerbaijan (MFBA) has been officially renamed Access Bank. The name stems from Access Holding, which controls a 16.53 percent stake in the microfinance institution (MFI). The news comes after MFBA recently attracted increased funding from the IFC and British Petroleum (BP). Continue Reading »