The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse reported that Oikocredit, a co-operative financial development institution in the Netherlands, issued loans totaling USD 7.4 million in January 2008. Of this total, USD 3.95 million was invested in three microfinance institutions (MFIs) in Eastern and Central Asia: Opportunity Bank, Kompanion, and Microloan Fund (MLF) Microinvest. The remaining USD 3.45 million was invested in three MFIs in Latin America: Prestanic, FONDECO, and MiCrédito. Continue Reading »

This deal comes to us courtesy of the Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse. MicroCredit Enterprises, a California-based nonprofit organization (NGO) that mobilizes private capital for microfinance institutions (MFIs) in the developing world, recently invested USD 600,000 in loans in CHC Limited, a Cambodian MFI. Continue Reading »

In another deal coming to us courtesy of Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse, Calvert Foundation, a nonprofit community investment vehicle, recently invested USD 500,000 in loans in XacBank, a leading microfinance institution (MFI) in Mongolia. Continue Reading »

Dr. Akhtar Hameed Khan, a prominent figure who helped lay the basic foundations of the microcredit movement, is mostly known for his work on the Comilla Model of rural development in the 1960s and the Orangi Pilot Project in the 1980s. The Comilla Model was originally developed at the Bangladesh (formerly Pakistan) Academy of Rural Development, and focused on the integration of public and private resources in creating a central institutional base and developing around it various development programs. The Orangi Pilot Project was initiated as a grassroots development project that emphasized self-help as the primary means of developing the “katchi abadis” (informal sector). Continue Reading »

Co-operative Insurance Company (CIC), Kenya’s only microinsurance company, will pay claims resulting from the country’s recent political unrest over a disputed presidential election. As of the end of January, CIC had already received claims totaling KES 55 million, equivalent to USD 779,037, an amount that is expected to rise as over 90 percent of CIC’s insured clients have yet to file claims. CIC’s decision to honor claims is a precedent in a country where insurers do not usually offer protection against loss or damage due to political risk. Continue Reading »

Engineers for Social Impact (E4SI), a new fellowship program in India, has begun its recruitment process to match the top five undergraduate candidates from Indian engineering schools with five partner social enterprises that are focusing on development by means of sustainable for-profit entrepreneurship. Continue Reading »

The Multilateral Investment Fund (MIF) of the Inter-American Development Bank, a multilateral financial institution, recently approved grants for two technical cooperation projects in Peru and Ecuador, valued at USD 1.6 million and USD 1.5 million, respectively. In addition, each country will contribute approximately USD 1 million as counterpart financing. Both projects will aim to boost income and employment levels among low-income entrepreneurs, while also incorporating this market segment into private-sector business development. Continue Reading »

Published by CGAP, based on key chapters of Protecting the Poor: A Microinsurance Compendium, 4 pages, October 2007, available for viewing here.

The second microfinance focus note of the series, entitled “Product Design and Insurance Risk Management”, focuses on ensuring the viability and sustainability of the insurance product. In order to design a product that strikes a balance between broad inclusion, value, affordability, and sustainability, microinsurance providers must start with four basic steps: define the target group, assess insurable risks, determine key product features, and establish payment capabilities among the target population. Continue Reading »

Published by CGAP, based on key chapters of Protecting the Poor: A Microinsurance Compendium, 4 pages, October 2007, available for viewing here.

In this first of twelve microinsurance focus notes, “Marketing: Promoting Insurance to the Poor”, CGAP provides tips on how to market insurance to the low-income population. Because this market segment is particularly disinclined to purchase insurance for several reasons, including lack of insurance education, limited resources, intangible benefits, short-term perspectives, and trust issues, social marketing techniques coupled with financial education are often necessary to successfully sell microinsurance. Continue Reading »

International Finance Corporation (IFC), a member of the World Bank Group, recently invested USD 20 million (SZL 147 million) in Micro Provident Botswana, a leading consumer finance company commonly known as Letshego. The investment will help the company expand its financial products and services to under-served segments of the market through local subsidiaries, and support sustainable economic development in Botswana, Swaziland and Zambia. Continue Reading »

At a recent stakeholders’ meeting, Governor Segun Oni of the state of Ekiti, Nigeria made several announcements pertaining to the development of the microfinance sector in the state. He disclosed that by next month, an Economic Team would be established in all sixteen local governments of the state to manage a new micro-credit fund. The fund will be comprised of a state government contribution of N50 million (USD 424,502) and local council contributions of N10 to N25 million (USD 84,900 to USD 212,251). It will be used to “develop the economic strategies of each of the local government areas”. Members of the Economic Team will be nominated by traditional rulers and will serve as volunteer servants of their community. Continue Reading »

The Janasree Sustainable Development Mission, a non-governmental self-help initiative promoting small and micro-enterprises (SMEs) in India, will be officially inaugurated by Indian Finance Minister Palaniappan Chidambaram on February 2, 2008 at the Janasree Microfinance Summit. Continue Reading »

Published by CGAP, January 2006, 16 pages, available for viewing here.

Because most microfinance institutions operate in developing countries where risk of currency depreciation is high and debt restructuring occurs periodically, they are particularly vulnerable to foreign exchange rate risk. A recent CGAP survey not only revealed that 50 percent of MFIs have no protection mechanisms in place, but also indicated a general lack of understanding of both foreign exchange risk and the extent to which MFIs are exposed. This paper seeks to raise awareness of the issue of foreign exchange rate risk within the microfinance sector first, by providing a brief overview of the different components of risk, second, by looking at current techniques employed by microfinance institutions (MFIs) and investors to manage these risks, and finally, by making recommendations on mitigating or avoiding exposure to exchange risk. Continue Reading »

FRANKFURT FORUM ON DEVELOPMENT FINANCE 2008

FEBRUARY 21-22, 2008, FRANKFURT SCHOOL OF FINANCE AND MANAGEMENT, FRANKFURT AM MAIN, GERMANY Continue Reading »

IBM, a multi-national computer technology corporation, announced in a recent press release the launching of its 2008 podcast series, entitled “IBM and the Future of…”. The series, to be updated monthly, presents interviews with thought leaders on the impact of technology on everyday life, as well as on the effects of shifting economics on performance and value. One of the first episodes in the series is “The Future of Microfinance”, hosted by Tim Washer, from IBM’s Corporate Communications, with Jessica Flannery, co-founder of Kiva.org and Kevin Thompson from IBM’s Corporate Citizenship and Corporate Affairs. Continue Reading »

Swiss Agency for Development and Cooperation (SDC), has granted a sponsorship of INR 4,100,000 (USD 103,000) to Microfinance Insights, a quarterly microfinance magazine published by Intellecap, an Indian investment and consulting firm. The sponsorship will enable Microfinance Insights to increase its international reach and content, host events in conjunction with each issue, build a website, and continue to disseminate domain knowledge. According to SDC India’s Deputy Country Director Adrian Marti, SDC’s grant to Microfinance Insights stems from its belief that the knowledge sharing is a key factor in promoting the sustainable growth of the microfinance sector. Continue Reading »

According UNHCR (United Nations High Commissioner for Refugees) spokesperson William Spindler at a press briefing at the Palais des Nations in Geneva, the UNHCR has signed an agreement worth USD 700,000 with Venezuelan microfinance institution (MFI), Banco del Pueblo Soberano. The grant will be used by the bank to distribute micro-credits to about 10,000 Colombian refugees and asylum seekers in Venezuelan border states of Zulia, Táchira and Apure, and some 200,000 unregistered Colombians who are seeking international protection in Venezuela from civil conflict. Continue Reading »

Published by Microfinance Information eXchange (MIX), 32 pages, available for viewing here.

MIX recently surveyed a global sample of 820 microfinance institutions (MFIs) that had a combined loan portfolio of USD 24 billion with over 53 million borrowers and 64 million savers. In addition to ranking MFIs along single categories (outreach, scale, profitability, efficiency, productivity, and portfolio quality), the 2007 edition of the report also utilizes new composite rankings to highlight the 100 top-performing MFIs that have achieved high outreach and low transaction costs, while maintaining transparency and boosting profitability. The report concludes that leading MFIs broke performance records on all fronts. Continue Reading »