Nearly two years after the crackdown on corrupt Microfinance Institutions (MFIs) in Rwanda by the Central Bank of Rwanda (BNR), depositors are still struggling to retrieve their deposits caught up with the fraudulent MFIs. According to a press release found on AllAfrica.com, in an effort to collect their money, depositors have decided to file their concerns with Rwanda’s Ombudsman’s office. Continue Reading »

Source: Daily Monitor.

Continue Reading »

Local Non-Government Organizations (NGOs) and Microfinance Institutions (MFIs) in Benin which were subcontracted by the Government-run ‘Microloans to the Poorest’ program have been accused of taking bribes from their borrowers, according to a press release found on IRIN News. The Government-run program, which operates through five partner banks, provides loans up to a maximum of 60 US dollars to borrowers in Benin. No information on the partner banks involved in this program is available. These partner banks disburse loans to borrowers through local MFIs and NGOs which interface with the borrowers and serve as loan intermediaries. Loan payments from borrowers are also collected by these intermediaries and remitted back to the partner banks which lend them. The press release quoted Mr. Aboubacar Aboudou, the first director of the Government-run program, as saying that a lack of oversight coupled with the rapid growth of the program led to hiring of several ‘unscrupulous intermediaries’ to process loans. Mr. Aboudou stated that these intermediary organizations squandered funds and ‘made the poor even poorer’. The program’s current director, Komi Koutche has called for step to eliminate these intermediaries. No information is available on which local MFIs were involved in these fraudulent activities. Continue Reading »

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 »

Fidelity Bank Plc, a commercial bank based in Nigeria has forged a partnership with the Nigerian-German Business Group (NGBG) to host a business forum on ‘Funding MicroFinance Banks’ on January 15^th, 2009 in Lagos, Nigeria. According to a press release found on NigerianBulletin.com, this partnership between Fidelity Bank and NGBG is intended to facilitate the entry of the Dutch microfinance organization, OikoCredit International into the Nigerian market. The press release stated that the CEO of Oikocredit International, Mr. Tor Gull, would lead other prominent experts in microfinance at the business forum to discuss ways to ‘shore up the capacity’ of Nigeria’s microfinance banks. The discussion would also unveil OikoCredit’s plan of expansion in Nigeria. According to the release, OikoCredit would set up a regional office in Nigeria and serve as a forum of exchange between its officials and key players in Nigeria’s small and medium enterprise sector, cooperative societies, microfinance and regulatory authorities. No further detail on the event or its participants is currently available. Continue Reading »

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 »

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 »

Source: Daily Nation.

Continue Reading »

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 »

Source: IRIN (United Nations). Continue Reading »

Bangladesh Rural Advancement Committee (BRAC), an International Development Organization founded in Bangladesh announced the launch of the BRAC Africa Loan Fund to provide microfinance loans to poor borrowers in Tanzania, Uganda and Southern Sudan. In a press release found on PRNewswire, BRAC announced that it has raised USD 62.6 million of capital towards the loan fund. The release stated that the Africa Loan Fund would provide long-term, local currency funding that would enable BRAC to scale up its microfinance operations to reach over 700,000 borrowers through over 200 branches across the three East African countries. Continue Reading »

Source: ACCION. Continue Reading »

Kings Microfinance Bank (KMFB), a Nigerian based microfinance provider announced that it has disbursed loans worth Naira 50 million, approximately equivalent to USD 367 thousand, to nearly 5000 Nigerians over the last several months. This announcement was made by Mr. Laide Adebayo, the Managing Director of KMFB during a chat with journalists at Lagos, Nigeria, according to a press release found on Vanguard – Nigeria. KMFB is one of the 815 organizations that have been licensed by the Central Bank of Nigeria (CBN) to supply credit to the marginalized poor and thereby support the Nigerian Government in its efforts to address poverty and meet the United Nations’ Millennium Development Goals (MDGs). Originally founded as Maryland Community Bank, KMFB registered as a Microfinance Bank in January, 2008. KMFB does not report to the MIX Market, the microfinance information clearing house, nor has it published its financial data on its website. Hence information on its total assets, loan portfolio and client base is not available. Continue Reading »

Founded in 1999, Neptune Software Plc is a banking software provider.  The UK-based company has over 170 employees and offices in the UK, South Africa, Nigeria, Kenya, Uganda, and India.  Neptune partners with technology leaders such as BEA, Oracle, Sybase, IBM, and Business Objects.  While Neptune also provides financial services software to the broader financial services industry, the company has created a niche with microfinance institutions.  In Nigeria, Neptune has partnered with over 45 successful microfinance institutions.  In 2005, CGAP awarded the company the highest rating, 4 stars, for its operational excellence.  Continue Reading »

The MasterCard Foundation and Mennonite Economic Development Associates (MEDA), a Canadian Christian organization, have announced a USD 5 million five-year program that will provide financial services to youth between the ages of 15 and 24 in Morocco and Egypt.  Microfinance services for the youth market have traditionally been scarce due to the perception that youth borrowers are higher risk because they lack collateral or work experience.  The program, titled Youth Invest, will enable microfinance institutions to develop and test innovative products designed specifically for the youth maket.  Continue Reading »

The growth of Rwanda’s microfinance industry is impeded by hundreds of thousands of borrowers who have failed to service their loans, contributing to high non-performing loan portfolio percentages in microfinance institutions (MFIs), it was reported in All Africa. MFI’s in Rwanda are currently dealing with poor loan repayment from their clients as a result of diverting loan funds to meet their personal needs instead of using them for the proposed investment. A number of Rwandan officials have commented on the situation, acknowledging that this is a serious problem in Rwanda. Gideon Kayinamura, a member of Rwandan Parliament advises that it is important for clients and lenders to come to a roundtable and fully understand the transactions before loans can be disbursed and Prosper Nyirumuringa, director of the Microfinance Development and Financing Fund of Rwanda Development Bank (BRD), advised MFI management to introduce officers who will be responsible for following up on the actual spending of loan money so that the expected investment returns are achieved. A variety of studies and surveys have identified key challenges and deficiencies in Rwanda’s microfinance industry that contribute to some of the low portfolio qualities of MFIs. Continue Reading »

Source: International Finance Corporation Continue Reading »

Source: All Africa. Continue Reading »