“Goodbye, microfinance,” a column by opinion writer T K Arun, of The Economic Times, foresees an end to microfinance. The Economic Times is a publication focusing on the Indian economy. Mr Arun argues that the conditions that led to the success of microfinance are eroding in his home country of India. Continue Reading »

Milford Bateman challenges many of the common assumptions regarding microfinance in his book “Why Doesn’t Microfinance Work?” published June 10, 2010 by Zed Books. The book primarily argues that microfinance is not only an ineffective tool against poverty, but that it encourages it by trapping entrepreneurs in low-value-added enterprises [1]. Continue Reading »

The Center for Financial Inclusion of US-based nonprofit ACCION and the World Bank’s Global Partnership for Disability and Development recently hosted a roundtable discussion titled ‘A New Financial Access Frontier: People With Disabilities,’ to discuss the facilitation of financial access for disabled individuals in developing countries [1]. Continue Reading »

In a recent interview with Vanguard, a regional publication, Alhaji Umar Ibrahim, acting Managing Director of the Nigerian Deposit Insurance Corporation (NDIC), shed light on the ongoing efforts to revitalize the Nigerian microfinance sector. Mr Ibrahim revealed that NDIC examiners had recently finished a comprehensive review of distressed microfinance banks. He stated that many of these banks have not been paying government fees and that many are facing insolvency. Continue Reading »

The Unitus-Hewitt Compensation And Benefits Survey, released in early June, has demonstrated stability in the microfinance industry during the 2009 economic crisis. The study examined cash and non-cash benefits at 15 microfinance institutions (MFIs) representing 10 million clients across India. The study was jointly executed by Unitus Inc., an international nonprofit providing funding and consulting services to MFIs, and Hewitt Associates, an international human resources consulting firm. Continue Reading »

By John D. Conroy, published by the Foundation for Development Cooperation (FDC), May 2010, 4 pages, available at: http://www.fdc.org.au/files/Resources/briefing-note/Briefing%20Note%20No%2010%20-%20Final%20%28e-version%29.pdf

In this FDC Briefing Note, the author draws parallels between the worldwide development of subprime lending and microcredit over the last decade. The theme of inadequate capacity for deposits and other forms of saving through microfinance institutions (MFIs) also runs through the author’s arguments. Continue Reading »

Bangko Sentral ng Pilipinas (BSP), the central bank of the Republic of the Philippines, has announced that it is considering raising the maximum microfinance loan size of PHP 150,000 (USD 3,200) to better serve small- and medium-sized enterprises (SMEs). BSP recognizes 214 microfinance banks in the Philippines, with outstanding loans of PHP 6.4 billion (USD 137 million) to 900,000 microentrepreneurs [1]. BSP states that SMEs make up 99.7 percent of all registered companies, account for 70 percent of all jobs and manufacture 30 percent of Filipino goods. Continue Reading »

By David Apgar and Xavier Reille, published by CGAP (Consultative Group to Assist the Poor), April 2010, 12 pages, available at: http://www.cgap.org/p/site/c/template.rc/1.9.43712/

“Microfinance Foreign Exchange Facilities,” a paper recently published by CGAP (Consultative Group to Assist the Poor), reviews methods microfinance institutions (MFIs) and microfinance investment vehicles (MIVs) use to deal with foreign exchange risk. It considers the nascent microfinance hedging market by detailing the operations of The Currency Exchange Fund (TCX), Cygma Corp and MFX Solutions LLC (MFX). It concludes by examining the importance of local-currency markets and additional development of the microfinance hedging market. Continue Reading »

The Global Microcredit Summit is requesting input to assist in its planning plenary and workshop sessions FOR at the 2011 Global Microcredit Summit. The survey must be completed no later than Friday, June 11, 2010, and can be found here:
http://www.surveymonkey.com/s.aspx?sm=j4A1ZACQS0xpJV8exD1SodPKbjZjHENbYb7wVb60yVg%3d

Continue Reading »

By P. Hazell, J. Anderson, N. Balzer, A Hastrup Clemmensen, U. Hess and F. Rispoli, published by the International Fund for Agricultural Development (IFAD) and the World Food Program (WFP), May 2010, 153 pages, available at: http://www.ifad.org/ruralfinance/pub/weather.pdf

This paper provides an introduction to agricultural risk and the use of weather index funds to mitigate that risk. Participants in a weather index fund would receive financial compensation if an index highly correlated with local crop yields follows an undisclosed pattern. This pattern is kept secret to reduce the risk of moral hazard. Continue Reading »

Daiwa Securities Group, a Japanese securities broker reporting JPY 17.1 trillion (USD 186 billion) in assets as of March 2010, will be issuing bonds to Japanese retail and institutional investors to support the operations of the European Bank for Reconstruction and Development (EBRD), an international developmental finance institution focusing on Eastern Europe  and Central Asia and headquartered in London [1]. Continue Reading »

The Microfinance Information Exchange (MIX), a nonprofit organization founded in 2002 with headquarters in Washington, DC, has informed MicroCapital that it will be adding the MIX Funding Structure Data set to the MIX Market website in July 2010. Continue Reading »

Elevar Equity Advisors and SVB India Capital Partners have teamed to make an INR 400 million (USD 8.64 million) equity investment in Vistaar Livelihood Finance, an Indian microfinance institution catering to non-agricultural female entrepreneurs. While their stake in Vistaar was not disclosed, Brahmanand Hegde, CEO of Vistaar, stated that the two companies had bought a “substantial minority” in the company. Continue Reading »

While the Brazilian microfinance market has seen significant growth since President Inacio Lula da Silva took power in 2002, a recent article estimates the market has reached two percent penetration [1]. Since his election, the number of microborrowers in Brazil has increased from 159,000 to 809,000 with a total of BRL 775.5 million (USD 426 million) in outstanding loans. Growth is expected to continue with increased interest in this market from established banking institutions such as Banco Santander, Unibanco and Banco Real. Continue Reading »

The SMART Campaign, an international microfinance advocacy organization launched in October 2009, announced it has reached 1,000 endorsements from microfinance organizations across 106 countries [1]. The Campaign’s mission is promote six principles in the treatment of low-income clients: avoidance of over-indebtedness, transparent pricing, appropriate collections practices, ethical staff behavior, mechanisms for redress of grievances, and privacy of client data [2]. Continue Reading »

A report released by PlaNet Finance China, a nonprofit acting to promote development of the microfinance sector, suggests that one third of China’s people have no access to financial services [1]. According to population data from the CIA World Factbook, this would total roughly 446 million people, a segment greater than the total population of all but one other nation, India [2]. Continue Reading »

Smile Microcredit Bank (SMB), the state-run South Korean microfinance bank, announced a comprehensive restructuring of their loan practices following successful advocacy to alter key pieces of government policy. The Financial Services Commission (FSC), South Korea’s financial policy body, reduced the cash holdings equivalent from 50 percent to 30 percent for loans up to KRW 20 million (USD 17,600). It also halved the required time of pre-loan operation from two years to one [1]. Continue Reading »

Event Name: Mobile Money Services Africa

Event Date: July 20 to July 22, 2010

Event Location: Johannesburg, South Africa

Event Website: http://www.iir-telecoms.com/event/mmsa

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

Cost: Two-day conference entry available for GBP 1,295 (USD 1,880), discount for registration before June 25, 2010. Mobile money operators are entitled to two free registrations per company. Pre-conference workshop available at extra cost. Continue Reading »