In February 2008, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) approved a new microfinance product designed specifically for housing. The new initiative was jointly proposed by the Housing and Urban Development Coordinating Council (HUDCC) and the Development Bank of the Philippines (DBP), and is part of a government-mandated initiative to provide housing solutions for the poor.   The initiative is crucial as nearly 33 percent of Filipino families live below the poverty line.  However, the viability of the plan is yet untested: the BSP’s close scrutiny of microfinance operations has alienated banks in the past, driving them away from offering the small, risky loans.  Another such government-mandated plan might actually undermine the impact of the loan product. Continue Reading »

Written by Serajul Hoque, graduate associate at the Department of Economics at Monash University in Australia, this study briefly investigates the impact of microcredit on rural Bangladeshi households.  Published in January 2008, the paper is based on a RAND survey conducted over four years, and suggests a possible relationship between a household’s membership in a microfinance program, specifically the Bangladesh Rural Advancement Committee (BRAC, previously reported), and an increased ability to financially withstand economic hardships.  Available online at http://www.microfinancegateway.org/content/article/detail/46789. Continue Reading »

The Department of Trade and Industry of South Africa (previously reported) has teamed with Old Mutual Group’s Masisizane Fund to launch the Isivande Women’s Fund (IWF), financing women-run enterprises in the country. The new fund is the result of a 2006 study conducted by the DTI’s Gender and Women Empowerment Unit, the International Finance Corporation (IFC), and FinMark. The study found that although women are more responsible managers of credit than men (p 5), they only receive 30 percent of loans, with black women receiving the least funding. Yet the data indicate that it is this particular group that is becoming increasingly important to the South African economy: approximately one million black women are self-employed, running mostly informal businesses (often referred to as “hawking”). This latest project targets this group with the goal of legitimizing informal businesses through finance. Continue Reading »

In a deal announced earlier this month and finalized last week the International Finance Corporation (IFC), a member of the World Bank group, has teamed up with Citigroup to loan USD 22 million to the microlending efforts of the Bangladeshi-based organization BRAC, formerly known as the Bangladeshi Rural Action Committee. The trenche is part of a larger financing plan of USD 55 million, of which USD 42 million will be provided by Citi. Citi Bangladesh and BRAC have worked together in the past several years to provide innovative microcredit solutions for Bangladesh, most recently in the first-ever implementation of a backstop facility for a microbank, which allows BRAC to lean on Citi in unfavorable market conditions rather than default on creditors. Continue Reading »

Following an announcement earlier this month, SKS Microfinance (previously reported (1), (2), (3)), an Indian microlending organization, has worked with ICICI Lombard General, an Indian insurance company, to roll out a health care product for the rural poor in Karnataka, Andhra Pradesh, and Orissa by March 8 of this year. This is a continuation of a pilot program introduced in Karnataka in February 2007. The problem of health insurance, while of growing concern in Western nations, is just another symptom of the severe poverty afflicting millions in developing nations. According to United Nations Development Programme, of the one billion people in India, 950 million — 95 percent — are living without health insurance. Continue Reading »

This story comes courtesy of the Consultative Group to the Poor CGAP), as reported in the January 2008 Microfinance Capital Markets Update, Issue No. 23. Oxfam Novib has made deals to lend USD 440,000 to Association Pour la Cooperation avec la Micro Enterprise (ACME) and USD 1.5 million to Fondo de Desarrollo Local(FDL), two microfinance institutions (MFIs) serving the Latin American and Caribbean (LAC) region. Oxfam Novib is a Dutch philanthropic organization founded in 1956, and is one of twelve members of Oxfam International. As of 2004, Oxfam Novib has dedicated USD 7.8 millionof its total portfolio, USD 28 million, to MFI projects in the LAC region. The fund is managed by Triple Jump Advisory Services. Continue Reading »