The new FinAccess 2009 Survey, a report on credit access released by FinAccess in conjunction with Financial Sector Deepening Kenya (FSDK) and the Central Bank of Kenya, shows that the market share of microfinance institutions (MFIs) and Savings and Credit Cooperatives (Saccos), jumped from 7.5 percent three years ago to 20 percent by the end of last year.  To read a brochure summarizing the results of the survey, click here. Continue Reading »

The International Finance Corporation (IFC), a unit of the World Bank Group, is providing a USD 65 million loan and USD 10 million in equity capital to MTN Afghanistan, a subsidiary of MTN Dubai and part of the South Africa-based MTN Group Ltd.  The investment is meant to support the expansion of MTN’s  mobile telephone network to meet growing mobile phone service demand in Afghanistan. The expansion is focused on low-income populations.  Details of the loan and equity investment were not available for this story, however James Ramadan, MTN Group’s Regional Vice President for Middle East and North Africa stated that the IFC was providing “long-term funding.”  The IFC hopes its investment will encourage other investors into the sector in Afghanistan.  Continue Reading »

The Microfinance Association, a global professional body that will cater to the needs of practitioners in the microfinance sector, has been established in the United Kingdom.  Membership in the association is open to all practitioners working in the microfinance sector worldwide, not just to those in the UK.  The association plans to offer its members an information center, a career advice center, and a knowledge management center.  The information center will provide information such as links and resources to rating agencies, market information, microfinance news, information on government agencies, forums and conferences, training and research, and networking opportunities.  The career advice center will provide resources such as tips on structuring a CV, successful interviewing strategies, sample interview questions, and a job search function.  The knowledge management center will provide research, newsletters and publications from leaders in the industry such as CGAP, Microfinance Insights, and the Journal of Microfinance.  At the time of this story most of these services were not yet available. Continue Reading »

Publishing company McGraw-Hill Professional has released “Microfinance for Bankers and Investors” by Elisabeth Ryne, managing director of the Center for Financial Inclusion at ACCION International.  The book explores the challenges of profitably delivering credit, savings, insurance, and remittance services tailored to serve the so-called bottom of the pyramid (BOP), the four billion people in the world who live on less than USD 3,000 per year.  The book offers sixteen in-depth case studies, on ventures by companies such as Citibank, Visa, and Sequoia Capital, exploring successful solutions in product design, last-mile delivery to remote villages and urban slums, and technological innovations that reduce costs and provide new means of payment and remittance to populations previously tied to a cash economy.   Continue Reading »

Spandana Sphoorty Financial, an Indian microfinance institution (MFI), has raised INR 800 million (USD 17 million) in one-year 10 percent bonds that have been listed on the Bombay Stock Exchange (BSE).   Standard Chartered was the sole book runner and arranger.  Mrs. Padmaja Reddy, Managing Director of Spandana, indicated the funds would help the MFI to expand to seven new states this year, and that listing on the BSE would help improve Spandana’s corporate governance. Continue Reading »

SKS Microfinance, a Hyderbad-based microfinance institution (MFI), announced it plans to raise Rs. 500 Crore (USD 104 million) in rated debt products in order to satisfy customer loan demands.  According to Dili Raj, Chief Financial Officer, the new debt will include bonds, commercial paper (CP), and securitization of receivables.  Included in the total amount is the recent one-year, 10 percent USD 16 million bond issue reported in a recent MicroCapital story.  Those bonds were listed on the Bombay Stock Exchange and fully subscribed by Standard Chartered Bank.  In fiscal year 2009, SKS raised a total of Rs. 3,700 Crore (USD 767 million) in debt, of which Rs. 150 Crore (USD 31 million) was in bonds, CP, or securitizations.  This fiscal year SKS plans to issue an incremental Rs. 5,000 Crore (USD 1 billion) in debt. Continue Reading »

The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) and Corporacion Andina de Fomento (CAF) have announced they will support a project to assist small-scale microfinance institutions (MFIs) in Latin America and the Carribbean obtain credit risk ratings and performance assessments.  The new project will give priority to MFIs with loan portfolios between USD 1 million and USD 15 million, with average loans not exceeding USD 3,000. The MIF and CAF will help cover part of the cost of the credit risk ratings and performance assessments:  the MIF will provide a grant of USD 986,161, CAF will provide USD 200,000 and participating MFIs will provide USD 400,000. Continue Reading »

Ganesh Rengaswamy has been named India Country Director for Unitus, Inc., an international non-profit organization that partners with early-stage microfinance institutions (MFIs).  Mr. Rengaswamy will head the organization’s India microfinance initiatives including managing the team of consultants, advising Unitus microfinance partners, and serving on the global senior management team. Continue Reading »

According to a press release in The Economic Times of India, Spandana Sphoorty Financial Ltd. is set to raise Rs. 300 Crore (USD 63.7 million) in equity funding and is currently in talks with over two dozen investors.  The deal would raise the company’s valuation to Rs. 1,800 Crore (USD 382.2 million).  Spandana intends to use the funds to expand and strengthen its capital adequacy ratio.  The Reserve Bank of India (RBI) raised its capital adequacy requirements (CRAR) for non-bank financial institutions last August, requiring institutions to meet a 12 percent CRAR by April 2009 and a 15 percent CRAR by April 2010.  Spandana’s CRAR stood at 19.5 percent last fiscal year. To read a MicroCapital story on the RBI’s new regulations, click here.  Currently Mumbai-based JM Financial holds an 18 percent stake in the microfinance institution, private equity fund Valiant holds 11 percent, Lok Capital has a 5 percent stake and another 15 percent is held by senior employees, with this round of funding their stakes will be diluted. Continue Reading »

The State Bank of Pakistan (SBP) has issued a new circular that it will provide a 25 percent first loss guarantee for loans under its Micro Credit Guarantee Facility (MCGF) to further encourage commercial banks to provide wholesale funds to microfinance institutions (MFIs).  The Facility was introduced last December but was met with an unenthusiastic response by banks despite the SBP’s 40 percent principal guarantee on loans.  According to the press release in the Daily Times of Pakistan, only one loan has been granted so far under the MCGF.  Banks and development finance institutions (DFIs) now will have the option of choosing either the 40 percent principal guarantee (pari passu), or the 25 percent first loss guarantee.  The first loss guarantee will cover gaps in repayment of a loan’s principal, up to 25 percent of the principal value of the loan, whereas the 40 percent principal guarantee will cover 40 percent of the actual loss incurred.  In essence the first loss guarantee covers a bank’s smaller losses upfront completely, while the 40 percent principal guarantee would require the bank to share in the losses but covers a larger percentage of loss. Continue Reading »

SHARE Microfin, a microfinance institution (MFI) based in Hyderabad, India, has announced that it intends to raise USD 50 million in equity funding.   According to the press release on VCCircle, the International Finance Corporation (IFC) is considering investing, and the MFI is currently in talks with other investors.  If the transaction proceeds it will be one of the biggest Indian microfinance transactions after SKS Microfinance’s USD 75 million deal in November last year.  To read a MicroCapital story about that deal, click here.  With the funding, SHARE will expand in states such as Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Uttranchal, and West Bengal.  No other information regarding the deal or potential investors was available at the time of this release. Continue Reading »

The State Bank of Pakistan (SBP) has recently issued a circular that requires shareholders of microfinance institutions (MFIs) to deposit their holdings in blocked accounts of the Central Depository Company (CDC) of Pakistan.  Prior written approval is required before withdrawing the shares from the CDC, and the cost of opening and operating the blocked accounts will be borne by the shareholders. Continue Reading »

Event Name: 2nd Annual Forum on Prepaid Card Compliance: Legal and Practical Guidance for Structuring Products and Mitigating Risk, June 23 - 24, 2009

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

Cost: Conference Only USD 1995 (USD 2195 if paid after May 29, 2009).  Additional master classes extra, see website for more details. 

Summary of Event:  This event focuses on legal, regulatory and enforcement concerns of the prepaid card industry.  Regulatory and enforcement officials, compliance experts, and outside counsel specializing in prepaid card compliance will discuss bsa exams, fraud deterrence, insolvency risks, obtaining non-public personal information, unclaimed property laws, and more.  Continue Reading »

PT Bank Danamon, the fifth largest bank in Indonesia by assets, expects loan growth may exceed 10 percent in the second quarter after key economic indicators painted a better-than-expected picture for 2009.  According to Danamon President Director Sebastian Paredes, the bank originally expected growth to be lower than 10 percent in 2009 and the first half of the year to be very difficult.  “We now feel the second half will be better because interest rates will continue to decrease. First-quarter gross domestic product was also not as low as we expected and our microfinance growth was better than predicted.”  Paredes added that beyond 2010 the bank believed loan growth would be as fast it was in the past five years and that loan growth would likely center around microfinance, consumer lending, and small- and medium-sized enterprises Continue Reading »

Written by Justyna Pytkowska, Anne-Sophie Houyet, and Aneta Mach for the Microfinance Centre for Central and Eastern Europe and the New Independent States, 105 pages, available at: http://www.mfc.org.pl/index.php?section=NET&page=Other 

This report covers several aspects of finance in the Central and Eastern Europe (CEE) and New Independent States (NIS) region including access to and use of financial services, the potential for micro-insurance, the supply of microfinance services, and the social performance of NGOs and non-bank financial institutions. Continue Reading »

Hyderabad-based microfinance institution SKS Microfinance has issued one-year 10 percent bonds, raising Rs. 75 Crore (USD 15.8 million).  The bonds, which will be listed on the Bombay Stock Exchange (BSE), were placed with Standard Chartered Bank’s Foreign Institutional Investments.  Standard Chartered was the sole book runner and lead arranger for the issue.  The funds will be used by SKS to extend loans to new and existing borrowers.  Continue Reading »

The International Finance Corporation (IFC), a member of the World Bank Group, announced on its website that Azerbaijani microfinance institution CredAgro, will join the IFC’s Azerbaijani Corporate Governance Project. As part of the program IFC will advise and train directors, managers, and key shareholders of the institution. IFC will also help revise corporate documents, improve financial reporting and information disclosure, internal control, and internal audit functions. Continue Reading »

Huot Ieng Thong, President of the Cambodian Microfinance Association, has announced that non-performing loans (NPLs) at Cambodian microfinance institutions (MFIs) rose again to 2.5 percent from around 1 percent in the first four months of the year.  This compares to less than 1 percent for the same period last year.  MicroCapital recently reported on the rise of Cambodian NPLs above 1 percent and the generally high level of disclosure by Cambodian MFIs.  To read the story click here. Continue Reading »