According to an article in the Financial Times, Hyderabad-based SKS Microfinance, India´s largest microfinance institution (MFI), is taking steps toward becoming the first microfinance institution (MFI) to be listed on Indian stock exchanges. The initial public offering (IPO) could come as early as the start of 2010. Investment firms Citigroup, Credit Suisse and Indian-based Kotak Mahindra Capital will manage the USD 200 to 250 million listing [1]. Continue Reading »

The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) has approved a USD 3.95 million grant for a program promoting the use of technologies by microfinance institutions (MFIs) in Latin America and the Caribbean (LAC). The program, set to begin early next year, will cost a total of USD 10 million. MFIs in the region are invited to submit proposals, whereupon selected MFI proposals with the most “innovation and capacity to achieve measurable results” will receive support to develop and implement a technology strategy [1]. Continue Reading »

Written by Dr. Dragan Loncar, Mr. Christian Novak and Dr. Svetlana Cicmil, published September 2009, 10 pages, available at http://www.microfinancegateway.org/gm/document-1.9.39138/MICROFINANCE%20PAPER-%20FINAL%20VERSION.pdf

This research paper attempts to answer why the microfinance industry in Eastern Europe in particular is more vulnerable to contemporary economic trends and why, unlike microfinance industries of other countries, it performs cyclically. It is divided into three sections: the first discusses microfinance and general trends within the industry; the second narrows in on trends within the microfinance industry in Eastern Europe; and the third analyzes the impact of the current global recession on microfinance in Eastern Europe. Continue Reading »

Grameenphone (GP), the largest provider of cell phone service in Bangladesh with over 20 million customers, has closed the subscription for an Initial Public Offering (IPO) expected to take place on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) this November. The subscription was “apparently hugely oversubscribed as long queues of aspirants were seen at the banks, even on the last day” [1]. Officials have not said how many times it has been oversubscribed. Continue Reading »

Written by Asadul Islam and Chongwoo Choe, published January 2009 as Munich Personal RePEc Archive (MPRA), Paper Number 16842, 49 pages, available at http://mpra.ub.uni-muenchen.de/16842/1/schooling-child_work_Bangladesh_Asad.pdf

This study presents a statistical analysis on the adverse effects of microcredit on child labor and children’s schooling in Bangladesh. Designed to be nationally representative, it compares 2,034 households in 13 districts across 91 villages and 23 sub-districts. To decrease selection bias, the study involves a comparison of two groups: the treatment group refers to the group that received microcredit; the control group refers to those from the same villages who did not receive microcredit but are “observationally similar”. Continue Reading »

In April, MicroCapital reported that President Obama, in response to the global financial crisis, announced the launch of a Microfinance Growth Fund for the Western Hemisphere to provide lending to small businesses in the region [1]. In response to this announcement, the following organizations have signed an agreement establishing the Microenterprise Growth Facility (MIGROF), a public-private partnership intended to provide USD 250 million in lending to microfinance institutions (MFIs) in Latin America and the Caribbean (LAC): BlueOrchard Finance S.A., a Swiss microfinance investment management company, which has been appointed to exclusively manage the facility; The Inter-American Development Bank (IDB), a development financial institution; the Overseas Private Investment Corporation (OPIC), an independent U.S. government agency which aims to facilitate investment in developing countries; the Inter-American Investment Corporation (IIC), an affiliate of the IDB which supports private sector and capital market development in LAC countries; and the Corporación Andina de Fomento (CAF), a multilateral financial institution which supports sustainable development in LAC countries [2]. Continue Reading »

The World Zakat Fund (WZF), established as part of an initiative by the Malaysian government to alleviate poverty, will launch in the first quarter of 2010. According to a statement released to the media, it will be the world’s first Islamic charity fund [1]. The fund aims to use Zakat, “which refers to the Muslim duty of giving a fixed portion [usually 2.5 percent] of one’s wealth to the poor and needy,” for economic development and poverty alleviation [2]. The BMB Group (BMB), an alternative asset manager based in the Caymen Islands which focuses on high-profile Islamic and Eastern investors, will co-manage the fund along with the International Zakat Organization (IZO), a charitable body of the Organization of The Islamic Conference (OIC), an inter-governmental organization established in 1969 and second largest in size only to the United Nations [3]. The BMB Group is also charged with raising USD 750 million in the fund’s first year of operation. Continue Reading »

Opportunity International, a nonprofit microfinance organization founded in 1971 by Al Whittaker and David Bussau, announced at the Clinton Global Initiative’s Fifth Annual Meeting that it will expand its Banking on Education program to five additional countries over the next 24 months.  Opportunity will commit USD 10 million to its education finance program, which provides loans for entrepreneurs to open schools in poor areas where it is difficult for children, particularly girls, to access public schools [1, 2].  Opportunity reaches over one million clients globally with products including loans, insurance and technical services.  As of December 2008, it had USD 799 million in assets [3].  To view the 2008 Annual Report, see [4] in the bibliography. Continue Reading »

Grameen Trust of Bangladesh, an NGO established by Nobel Laureate Professor Muhammad Yunus in 1989, has teamed up with Alibaba Group, China’s largest online business-to-business trading site which hosts over 42 million users from more than 240 countries, to create Grameen China [1, 2, 3].  Alibaba, which had an IPO of USD 1.7 billion on the HKSE in 2007, has kicked-off the initiative with a USD 5 million charitable donation.  Grameen China will initially focus on providing financial services to people living in Inner Mongolia and Sichuan Province, which is still recovering from the May 2008 earthquake that killed over 70,000 people and left nearly 10 million homeless [4]. Continue Reading »

The Central Bank of Nigeria (CBN) has granted permission to Integrated Micro Finance Bank Plc (IMFB) to temporarily shut its doors due to a lack of short-term liquidity [1].  The announcement comes shortly after the unexpected resignation of IMFB Chief Executive, Mr. Simon Akinteye.  According to Mr. Femi Fabamwo, Deputy Director of the Other Financial Institutions Department of the CBN, the short-term liquidity problems of IMFB were intensified when huge numbers of enraged customers demanded their money back.  Lacking sufficient financial resources to meet depositors´ requests, IMFB appealed to the CBN, which has allowed it until next month to reopen. Continue Reading »

Venture fund Lok Capital LLC has closed a US $1.5 million investment deal with Indian Chennai-based Asirvad Microfinance Private Ltd, giving it a 24% stake in the company [1].  Launched in 2001 with support from the Rockefeller Foundation, Maritius-based Lok Capital Group comprises Lok Capital LLC, a venture fund which invests in commercially-oriented microfinance institutions in India; Lok Advisory Services (LAS), an Indian-based team which advices the Fund; and the Lok Foundation, a not-for-profit entity providing grant financing to MFIs that receive investments from Lok Capital LLC [2].  Lok Capital LLC investors include the IFC, CDC Group, KfW, FMO, Accion International, responsAbility and Développement international Desjardins.  The fund has a total of US $22 million in committed capital and an average investment size ranges from US $0.5 million to US $2 million [3]. Continue Reading »