Lori Curtis
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Wednesday, February 4, 2009

MICROCAPITAL STORY: Tanzania’s Promotion of Rural Initiatives and Development Enterprises Ltd. (PRIDE) Anticipates Deposit-Taking Banking License By End of 2009

Promotion of Rural Initiatives and Development Enterprises Limited (PRIDE), a Tanzanian microfinance institution, anticipates securing a microfinance banking license from the Bank of Tanzania (BOT) by the end of 2009. This is according to PRIDE Director General, Rashid Malima, at a training workshop in Dar es Salaam created by Norwegian School of Economics (NHH) and the University of Dar es Salaam Entrepreneurship Centre (UDEC). This license will mark the transformation of the organization into two separate institutions, one being a non-governmental organization (NGO) and one a licensed financial instutition. The preliminary requirements and processes for the BOT have been met. Tanzania’s Minister for Trade, Industries and Marketing, Dr Mary Nagu, praised PRIDE as a “true government partner in bringing about development to people” working in both in urban and rural settings. Continue Reading »

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Wednesday, February 4, 2009

MICROCAPITAL PAPER WRAP-UP: Much Ado About Nothing: The Case of the Nigerian, Microfinance Policy Measures, Institutions and Operations, By B.O. Iganiga

Much Ado About Nothing: The Case of the Nigerian, Microfinance Policy Measures, Institutions and Operations; By B. O. Iganiga and published in The Journal of Social Science. The original paper is 13 pages and available here. Continue Reading »

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Monday, February 2, 2009

MICROCAPITAL PAPER WRAP-UP: The State of the Microcredit Summit Campaign Report 2009, by Sam Daley-Harris

The State of the Microcredit Summit Campaign Report 2009 was written by Sam Daley-Harris and is a 70 page report that discusses the human face of global poverty, reviews microfinance breakthroughs in helping slum dwellers move out of the slums and highlights innovations that have brought renewable energy to poor communities. The report is a summary of the achievements and innovations of the Microcredit Summit Campaign for the year 2008 as wells as notable achievements in the microfinance community in general and consists of contributions from a variety of experts in the microfinance industry. The original report is available here. Continue Reading »

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Friday, January 30, 2009

MICROCAPITAL STORY: GTZ Provides Microfinance Training to Participants from the Central Bank of Yemen in Anticipation of New Microfinance Law

The German Development Cooperation (GTZ) Private Sector Development Project (GTZ-PSDP) began providing training workshops on microfinance for participants from the Central Bank of Yemen. The first workshop began on January 24 2008, and is the first in a series of workshops which aims to build the capacity of the Central Bank to better understand microfinancing, according to Ozaina Al-Jundi, an advisor for microfinance at the GTZ-PSDP. The workshops will be held every month in 2009. The trainees from this initial workshop will be responsible for applying a proposed microfinance law which is awaiting approval by the Yemeni Parliament. Yemen is a priority partner of the GTZ where it aims to develop and promote business related services, improve political, legal and institutional frameworks for investments and strengthen central government and private institutions. The proposal of a Microfinance Banking Law was discussed in 2007 by representatives of the Central Bank as a first output of a National Action Plan related to the National Microfinance Policy Statement. The Action Plan was developed through a cooperation between the Ministry of Planning and International Cooperation (MOPIC), the Central Bank, Social Fund for Development and with funding from KfW. More information on this can be found in this MicroCapital Story. Continue Reading »

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Tuesday, January 27, 2009

MICROCAPITAL STORY: Bank Indonesia Welcomes The Competition Of Foreign Banks Into Indonesia’s Microfinance Sector

Bank Indonesia (BI) Deputy Governor Mulyanaman D Hadad stated recently that the entry of foreign banks into the microfinance sector in Indonesia will have a positive impact in expanding the reach of financial services and that Indonesian banks should not be concerned. He commented that the increase of foreign banks into Indonesia’s microfinance sector will improve the competitiveness of local banks, and will bring capital money as well as knowledge and managerial skills to the sector. Additionally, a recent Asian Development Bank (ADB) publication also called for increased competition in rural and microfinance markets in order to enhance the capacity of the financial sector to provide long-term financing, one of the ADB’s strategic focuses for Indonesia. While the number or foreign banks that have recently begun operations in Indonesia was not reported, there are currently 30 foreign banks registered as either ordinary or associate members of The Foreign Banks Association of Indonesia. Continue Reading »

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Monday, January 26, 2009

MICROCAPITAL STORY: Central Bank of Nigeria (CBN) Celebrates New Microfinance Licenses and Challenges Governments at 3rd Annual Microfinance and Microfinance Entrepreneurship Awards

The Central Bank of Nigeria (CBN) announced at the 3rd Annual Microfinance and Microfinance Entrepreneurship Awards Ceremony that it has licensed a total of 840 microfinance institutions throughout the country in, 25 of which have been licensed since September 2008. CBN Governor Chukwuma Soludo stated that despite this increase in MFIs, as well as an increase in branches of universal banks by two thousand since 2003, access to formal finance in Nigeria remains at 35 percent. Local and state governments were challenged to establish and mainstream microfinance programmes while praising particular microfinance initiatives such as the Agricultural Credit Guarantee Scheme (ACGSF), the insurance deposits for microfinance by the Nigeria Deposit Insurance Corporation (NDIC) as well the development of a credit bureau, the Credit Reference Company. Continue Reading »

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Monday, January 26, 2009

MICROCAPITAL STORY: Revamping Pakistan’s Microfinance Sector: Government Reveals Aggressive Goals in Second Poverty Reduction Strategy Policy Paper

As a part of a new policy matrix added to Pakistan’s Poverty Reduction Strategy Paper (PRSP)-II, new goals for the microfinance industry in Pakistan have been established, it was announced in the Daily Times. A target was set for the amount of microfinance lending throughout the sector in 2008/2009 to total Rs 37 billion (USD 468 million), and for the number of active borrowers to increase to 3 million for 2009/2010, and to 10 million by 2015. Additionally, for 2008/2009, it is intended for National Rural Support Programme (NRSP) to become a microfinance institutions (MFIs), and for the Microfinance Credit Guarantee Facility to be launched. Khushali Bank will also be granted legal status under MFIs Ordinance 2001 in this time period. By 2009/2010, a Community Investment Fund (CIF) will be launched, along with a feasibility credit rating mechanism for small borrowers. Continue Reading »

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Friday, January 23, 2009

MICROCAPITAL STORY: Arab Development Summit Commits US$2 billion to Microfinance Through Arab Fund for Economic and Social Development (AFESD)

Arab states have agreed to form a USD 2 billion fund to extend credit and help reduce unemployment in the region. While reports on an inability to make a decision on the situation in Gaza dominate the press discussing the first Arab Economic, Social and Development Summit in Kuwait City, this is one of the only material agreements that has emerged from the Summit. The funds will be managed by the Arab Fund for Economic and Social Development (AFESD) and will include a microfinance programme. Amr Moussa, secretary-general of the Arab League, was quoted as saying that economic issues had to move forward in the face of political differences between the states, while Kuwait’s foreign minister, Mohammed Al Sabah, stated that it had been proved that economic activity was the best way to control poverty. No specific details on how the funds will be used were provided, except that the total amount will be used to support small and medium enterprisers and boost investments in the Arab world, and that a Grameen Bank-model of microfinance will be used. Continue Reading »

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Wednesday, January 21, 2009

MICROCAPITAL PAPER WRAP-UP: 2008 MIX Global 100 Composite: Rankings of Microfinance Institutions

Published by Microfinance Information Exchange (MIX), 13 pages, available for viewing here.
The Microfinance Information Exchange, Inc. (MIX) has released its 2008 MIX Global 100 Composite: Rankings of Microfinance Institutions. The business results of 971 MFIs for the 2007 financial year were surveyed, from which 652 profitable MFIs were sampled to present the 100 leading MFIs. The ranking measures the balance achieved by an individual MFI of three key attributes: outreach, efficiency and transparency. Outreach is determined by the number of borrowers, the growth in borrowers, market penetration, deposit to loan portfolio ratio and the depositors to borrowers ratio. Efficiency is measured by the cost per borrower to GNI per capita ratio, profit to loan portfolio, the portfolio at risk greater than 30 days and the write off ratio. Transparency is measured by the annual reporting on MIX Market and audits on MIX Market. Continue Reading »

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Friday, January 16, 2009

MICROCAPITAL STORY: Indian Bank Launches The Latest Of Its Rural Development Initiatives, Financial Literacy and Credit Counselling Centres (FLCC) and Micro State Branches, to Support Microfinance

Indian Bank, a Government-owned banking institution, has established the first of its Financial Literacy and Credit Counselling Centres (FLCC) in Dharmapuri, one of the 32 districts in Tamil Nadu on the Southeast coast of India. The FLCCs are being established under the umbrella of the newly created Indian Bank Trust for Rural Development (IBTRD). FLCCs will provide information on various financial products and services and advice on managing debt and finances as well as helping people to understand their rights and responsibilities with regards to finances. A proposed second FLCC may open in Puducherry a Union Territory bordering Tamil Nadu. The FLCCs will provide information at no charge to the client. Additionally, training institutes entitled Indian Bank Self Employment Training Institute will be established under the IBTRD in Andhra Pradesh, Tamil Nadu and Puducherry. Continue Reading »

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Thursday, January 15, 2009

MICROCAPITAL STORY: Bill and Melinda Gates Provide US$700,000 to Microcredit Summit Campaign’s “Movement Above US$1 Per Day Threshold” Project

The Bill and Melinda Gates Foundation has donated USD 700 thousand in the form of a grant to the Microcredit Summit Campaign‘s (MSC) project entitled “Movement Above the US One Dollar Per Day Threshold“. The funds will be used to form expert panels who will develop credible methodologies for determining the number of microfinance clients who have crossed the USD 1 a day threshold between 1990 and the current year. The funds will also be used to research and produce studies based on the recommendations of these panels. A Bangladesh Expert Panel has already convened, an India Expert Panel is currently being formed, and an Ethiopia Expert Panel is being planned for 2009. While this is the first time the Bill and Melinda Gates Foundation has provided funding to the Microcredit Summit Campaign, it has previously provided funding to the RESULTS Educational Fund, MSC’s founding organization. Continue Reading »

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Wednesday, January 14, 2009

MICROCAPITAL STORY: Nigeria’s Rivers State Micro-Finance Agency (RIMA) And First City Monument Bank (FCMB) Promote Microfinance to Laid-Off Motorcycle Operators

Microfinance is being proposed as a potential solution to the large number of commercial motorcycle operators known as ‘Okada’ who have recently found themselves unemployed in the Rivers State of Nigeria. The government recently banned the motorcycles in the state capital of Port Harcourt as a part of its urban renewal programme. The government has asked all willing ‘indigenes’ who are displaced by the ban to access the N2 billion (USD 12.8 million) microfinance programme with First City Monument Bank (FCMB) to venture into a taxi business, which is being managed by Skye Bank. The state Transport Commissioner, George Tolofari said that the measure was a part of a government effort to ensure that former Okada operators of Rivers State origin are provided with assistance and continue to feel a sense of belonging. He also stressed that the credit facilities must be used as intended by government. Continue Reading »

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Tuesday, January 13, 2009

MICROCAPITAL STORY: Uganda’s Global Trust Bank Plans Expansion Throughout East Africa

Global Trust Bank, owned by the Industrial and General Insurance (IGI) Plc of Nigeria and the National Insurance Corporation of Uganda (NIC) is contemplating opening branches in Rwanda, Burundi and Southern Sudan but says that expansion throughout Uganda’s rural areas is not part of its plan.  Global Trust Bank has been described as a “new indigenous Ugandan commercial bank” in East African Business week, after it acquired Uganda’s Commercial Microfinance Limited (CMF) in July 2008. IGI of Nigeria made the purchase of CMF in order to start up Global Trust Bank, which began operations in November 2008.  MicroCapital covered the initial acquisition and additional information can be found here.  Global Trust Bank has inherited CMF’s eight branches and six agencies throughout Uganda and recently named Richard Byarugaba as its CEO. Continue Reading »

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Tuesday, January 13, 2009

MICROCAPITAL STORY: Kenya Women Finance Trust (KWFT) Becomes First Kenyan MFI to Take Deposits

Kenya Women Finance Trust (KWFT) has achieved what it calls a “major milestone” as it became the first microfinance institution (MFI) to gain permission by the Central Bank to accept customer deposits under the Microfinance Act 2006. The Act provides for protection of customers’ deposits to a maximum of Sh 100 thousand (USD 1.2 thousand), as is the case with commercial banks. MicroCapital has followed KWFT since 2005 and covered its transformation into a deposit-taking MFI. MicroCapital also recently covered the details of the Microfinance Act 2006, discussed here. Continue Reading »

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Monday, January 12, 2009

MICROCAPITAL STORY: Malawian Microfinance Institutions Accused of Profiteering – Blue Financial Services and Izwe Lose Government Backing

The Malawian Civil Servants Trade Union (CSTU) has asked the government to rethink its recent decision to cease guaranteeing loans obtained from microfinance institutions (MFIs) or to increase loan facilities to its employers. The government made the decision in December 2008, stating that MFIs were charging “exorbitant” interest rates increasing poverty among civil servants in the country. Blue Financial Services and Izwe were specifically referenced under this accusation. Finance Minisister Goodall Gondwe made the announcement and is reportedly adamant that the government would no longer guarantee or act as a collections agent for loans obtained from microfinance institutions. It is unclear from the various reports whether this will pertain to all MFIs or just to those deemed to be unfairly exploiting civil servants. Continue Reading »

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Friday, January 9, 2009

MICROCAPITAL STORY: The Push and Pull of China’s Microfinance Expansion

A series of key events over the past three months in China have indicated that microfinance is making steady, but slow, progress in its expansion. These events include the Microfinance Investor Conference, held in Beijing in December 11 and 12, 2008, which brought together Chinese MFIs, international investors and other stakeholders and provided an overview of the Chinese microfinance landscape; Citigroup Inc., one of the world’s largest financial conglomerates, opening up in China’s rural areas; and finally the Chinese government’s relaxation of financial constraints intended to increase capital flows. In a brief analysis of these events over the last three months, the following provides a brief examination of China’s microfinance industry. Continue Reading »

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Thursday, January 8, 2009

MICROCAPITAL STORY: India’s IDBI Bank Ltd. Increases Credit to MFIs While Orissa State Government Calls for Banks and MFIs to Meet Lending Targets

India’s state-owned Industrial Development Bank of India Limited (IDBI) has announced measures to increase the amount of credit to the microfinance industry. According to the Trading Market, the IDBI has reduced the interest rates for microenterprises, increased working capital limits, reduced the margin payment and provided softer loan terms for micro, small and medium sized enterprises (MSMEs). Loans for microenterprises have been reduced by 100 basis points from interest rates on November 30, 2008. It is also planning to grant need-based “ad hoc” working capital demand loans to MSMEs repayable in one year, as well as providing “adequate” increases in working capital limits to MSMEs. Continue Reading »

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Wednesday, December 17, 2008

MICROCAPITAL STORY: Spanish Agency for International Cooperation (AECID) Provides US$ 8.6 million in Funding for Jordan’s Microfund for Women

The Spanish government provided funds of Euro 6 million (USD 8.6 million) to the Microfund for Women, a Jordanian microfinance institution. Under an agreement signed on December 15, 2008 at the Ministry of Planning and International Cooperation, the Spanish Agency for International Cooperation (AECID) provided the Microfund for Women with the funds, providing additional support to the Jordanian microfinance sector, which accounts for approximately 20 percent of the of its gross domestic product (GDP). This is not the first time that the Spanish government has funded Jordanian microfinance in 2008. In February AECID provided the National Microfinance Bank (NMB) with Euro 5 million (USD 7.2 million) and the Micro Credit Company (Tamweelcom) with Euro 4 million (USD 5.74 million). Continue Reading »

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