MICROLENDING ballooned more than R6bn (USD 855mm) to nearly R30bn (USD 4.27bn) in the year to February, according to figures released by the National Credit Regulator yesterday. The data show that consumer appetite for debt is still very high, despite four rate increases last year.

The head of the National Credit Regulator’s research and statistics division, Marlene Heymans, said the microlending loan book grew 27% on the previous year to R29,2bn (USD 4.16bn). Disbursements rose 19% to R32bn (USD 4.56bn), she said. This indicated that South Africans were sinking deeper into debt, and were defying repeated warnings by the monetary authorities that they should not overextend themselves. Continue Reading »

Central Bank Nigeria (CBN) has endorsed a broadening of mergers and acquisitions among existing microfinance institutions (MFI’s) or ‘community banks’ so that they can comply with minimum capital requirements which are part of forthcoming regulation. The regulation, which requires all such organisations to register as microfinance banks by December 2007 (see previous article on microcapital.org), requires a minimum capital base of 20mm Nigerian naira (USD 156,500) for ‘state community banks’ and NGN 1bn (USD 7,824,000) for ‘federal community banks.’ After a meeting between CBN and the National Association of Community Banks of Nigeria (NACOB) Abdulgadir Bauchi, president of NACOB, said “community banks can now go into mergers and acquisitions so as to meet the deadline given by the apex bank to transform to microfinance bank[s].”

Continue reading “Mergers and Acquisitions in Nigerian Microfinance to Ease Compliance with Forthcoming Regulation”

According to an article by The Standard, talks have been in progress regarding a joint knowledge sharing initiative between two large-scale financial institutions. Equity Bank, a MFI (microfinance institution) that currently owns 35% of the bank accounts within Kenya, has been meeting with China’s main development establishment to flesh out an arrangement centered on microfinance. Continue reading “Equity Bank of Kenya Considering Partnership with China Development Bank with a Focus on Microfinance”

Boafo Microfinance Services Ltd, a newly established microfinance institution (MFI), recently disbursed its first microcredit loans in Accra, Ghana. The organisation is the product of a joint venture between CHF International, a US based non-profit humanitarian and development organisation founded in 1952, and HFC Bank, a commercial bank and the largest mortgage provider in Ghana which also has experience of providing microfinance loans.

Continue reading “CHF International and Ghana’s HFC Bank Creation, Boafo Microfinance Services Ltd, Begins Microcredit Loans”

Following news that the Central Bank Nigeria (CBN) would impose new regulations on microfinance banks last year (see article on microcapital.org) the CBN is preparing a systematic certification programme for microfinance banks operating in Nigeria. When the regulations were announced last year the deadline imposed for microfinance institutions (MFI’s) to comply with the new measures and convert to microfinance banks was December 2007. Once this deadline has passed and the micro-banks are all regulated, the certification process will begin (January 200). It forms part of a capacity building programme to try and make the domestic microfinance industry more robust and transparent. The CBN intends to base the certification on international best practices, and expects to enforce compliance with the certification requirements within 3 years.

Continue reading “Central Bank Nigeria (CBN) Prepares for Microfinance Certification Programme to Commence in 2008″

The Central Bank of Kenya has released its draft microfinance regulations which spell out the implications and enforcement of the Microfinance Act 2006 (see previous report on microcapital.org). The act allows the Central Bank to license, regulate, and supervise any deposit-taking microfinance institutions (MFI’s), and is planned to come into force on July 1st 2007. As such, any MFI’s in Kenya are required to comply with the guidelines set out by the Bank if they are to continue operating. There is also a stakeholders workshop scheduled for April 19th 2007 to ‘review and build consensus’ on the proposed regulations.

Continue reading “Central Bank Gets a Grip on Microfinance in Kenya as New Regulations are Introduced”

The government of Madagascar received USD 5 mn in credit to support their microfinance project, part of Madagascar’s Financial Sector Development Strategy and Action Plan, from the World Bank. According to the World Bank website, the additional line of credit will “help finance the costs associated with the financing gap under the current International Development Association’s funded project. The funding will also make it possible to provide technical support to microfinance institutions (MFIs) to increase membership, savings and credit by at least 25%. Additional goals of the funding are for all MFI networks in Madagascar to reach operational self-sufficiency and to complete the establishment of the national microfinance training program. The World Bank will also support the implementation of the local regulatory laws and the strengthening of to the capacity Central bank to supervise the MFIs licensed under the microfinance law.
Continue reading “World Bank Approves an International Development Association USD 5 mn in additional credit to support Madagascar’s Microfinance Project”

Fondation Zakoura is a non-governmental organization (NGO), founded in 1995 with the mission to fight poverty and promote civic responsibility. The organization’s main goal is to improve the quality of life of underprivileged Moroccans who can not access traditional sources of financing, by providing loans, and workshops on a wide range of issues including legal rights, healthcare and environmental education. Since its creation, Zakoura has disbursed 1.82 million loans for a total value of about USD 380 million. In addition, Zakoura currently serves more than 150,000 clients, about 80 percent of whom are women.

Continue reading “Who’s Who in Microfinance: Fondation Zakoura”

PlaNet Finance is a French non-profit organisation based in France, founded by Jacques Attali and Arnaud Ventura. After a pilot programme in East Africa the organisation was founded in 1998; it now has 147 employees and 31 regular volunteers. PlaNet Finance and its subsidiaries or spin-offs operate in three main areas; technical assistance; assessing and rating microfinance institutions (MFI’s); and financing MFI’s. It manages PlaNet Microfund, a fund which targets young MFI’s often in countries where foreign investment in microfinance is rare. In November 2005 PlaNet Microfund reported total assets of USD 407,129 to the Mix Market, the microfinance information clearinghouse. It founded and has a major shareholding in PlaNet Rating, a specialised ratings agency, and Microcred, an international holding company.

Continue reading “Who’s Who in Microfinance: PlaNet Finance”

Dr. Muhammad Yunus, winner of the 2006 Nobel Peace Prize and founder of the path breaking Grameen Bank, will work with the Norwegian foreign ministry as they introduce microcredit programmes into their international development and foreign aid efforts across Africa. Dr. Yunus will act as a special advisor to the ministry’s micro-credit project and furthermore, the Grameen Bank will also receive Norwegian funding. The Grameen Bank project started in Jobra, Bangladesh, and was established as an official bank in 1983. At the year end 2006 it reported a gross loan portfolio of USD 481,290,766 to the Mix Market, the microfinance information clearinghouse. In a more comprehensive report at the year end 2005 Grameen Bank had a debt to equity ratio of 553.25% and a return on assets of 0.32%.

Continue reading “Dr. Muhammad Yunus to Work with Norway’s Foreign Ministry on Microcredit Projects in Africa Despite Conflict of Interest and Ongoing Tension with Telenor”

Cambodian microfinance institution (MFI) Thaneakea Phum (Cambodia) Ltd. (TPC) received a USD 1.57 loan from the responsAbility Global Microfinance Fund. TPC began as part of the Small Enterprise Development program of the Catholic Relief Services in Cambodia, but has since evolved into a limited liability company licensed as a microfinance institution by the National Bank of Cambodia. MIX market, the microfinance information clearinghouse, reports that THC has 55,870 active borrowers, a gross loan portfolio of USD 7.3 mn and USD 7.7 mn in total assets as of 31 December 2006. ResponsAbility was created in 2003 by several large Swiss financial institutions. It has USD 96 mn in fund assets as of 31 January 2007 and also reports that USD 89 mn of its fund assets were allocated to microfinance investments during the same period.
Continue reading “Cambodian Microfinance Institution Thaneakea Phum Cambodia receives USD 1.57 mn in Loans from ResponsAbility Global Microfinance Fund”

Another deal coming to us courtesy of the CGAP-MIX MCM Newsletter, the Morocco based Association Al Karama de Micro Credit, received a USD 155, 700 loan from responsAbility Global Microfinance Fund. Creates in 1999, Al Karma mission is to help fight poverty by providing financial services to micro-enterprises. According to the MIX Market, the microfinance clearing house, as of December 31^st 2006, its gross loan portfolio equaled USD 1,741,806 and its total assets were USD 2,140,920. Its debt to equity ratio was 3.96%, and as of December 2006, Al Karama had 8,071 active borrowers.

Continue reading “Association Al Karama de Micro Credit Receives $155, 700 Loan from the ResponsAbility Global Microfinance Fund”

In a speech at a regional training course on regulation and practical operations of microfinance institutions, Famara Jatta, the Governor of the Central Bank of Gambia publicly criticized governments that use credit schemes to transfer resources to specific target populations and agrees with the groups that advocate that governments disengage from microfinance. He added that the role of governments is in a legal and supervisory role. Governor Jatta did not criticize microfinance as an industry, praising the financial services it provides as helpful to human and economic development. He did, however, suggest that, since poor clients require financial services beyond credit, microfinance institutions (MFIs) operating in his country expand their services into savings, transfers and insurance, pointing out the success of such programs in Latin America.

Continue reading “Governor of the Central Bank of Gambia Criticizes Government Provision of Microfinance and Calls for a More Integrated Approach for MFIs Operating in the Gambia”

MicroCredit Enterprises (MCE) announced the approval of three new loans to microfinance institutions (MFIs), total USD 1.4 mn to Hattha Kaksekar Limited of Cambodia with USD 600,000, Finance for Development LLC in Azerbaijan with USD 700,000, and FINCA Peru with USD 150,000.

Continue reading “MicroCredit Enterprises Provides Loans to Microfinance Institutions Cambodia-based Hattha Kaksekar Limited, Azerbaijan-based Finance for Development, and FINCA Peru”

Another story coming to us courtesy of the CGAP-MIX Capital Markets Update newsletter, Hivos-Triodos Fund loans USD 561,600 to Marang Financial Services, based in South Africa. The investment by Hivos-Triodos Fund hopes to encourage growth in the foundation by providing the means for new loans. Marang Financial Services (Marang) is a Development Microfinance Institution, working towards enabling poor to access a range of financial services. Marang does not report to the MIX Market, the microfinance clearing house, but according to its annual report, as of March 31^st 2003, Marang had total assets amounting to approximately USD 16.5 mm.

Continue reading “Hivos-Triodos Fund Invests 561,600 in Marang Financial Services”

French-based PlaNet Finance, umbrella organization of the PlaNet Microfinance Fund, has teamed up with the United Nations Development Programme (UNDP) to launch the Programme for the Support of the Associates and Communities struggling against HIV/AIDS (PAMAC). The program, whose goal is to provide guarantee funds to people with HIV/AIDS, began in January of 2007 in Burkina Faso, a West African landlocked nation with a population of 13.2 mn, 2.3 percent of which are infected with AIDS.

Continue reading “PlaNet Finance and the United Nations Development Programme Launch the Programme for the Support of the Associates and Communities Struggling Against HIV/AIDS in Burkina Faso”

Another story coming to us courtesy of the CGAP-MIX Capital Markets Update newsletter, Hivos-Triodos Fund loans USD 650,300 to Sinapi Aba Savings and Loans Ltd, based in Ghana. Sinapi established in 2004 to provide financial services in the form of loans and deposits to micro and small entrepreneurs in order to help increase their income. According to the MIX Market, as of December 31^st 2005, Sinapi had a gross loan portfolio of USD 4,766,482 total assets of 8,211,045, a return on assets of -0.45% and a debt to equity ratio of 160.69%.
Continue reading “Hivos-Triodos loans 650,300 to Sinapi Aba a Ghanaian Microfinance Institution”

Another story coming to us courtesy of the CGAP-MIX Capital Markets Update newsletter. Hivos-Triodos Fund loans USD 1.18 mm to Pride Tanzania. The investment by Hivos-Triodos Fund hopes to encurage growth in the foundation by providing the means for new loans. Established in 1994, the mission of Pride Tanzania is to create a sustainable financial services network for micro-entrepreneurs in order to stimulate business growth, and alleviate poverty in Tanzania. According to the MIX Market, as of December 31^st 2005, Pride Tanzania had a gross loan portfolio of USD 12,738,424 total assets of 13,779,696, a return on assets of 3.79% and a debt to equity ratio of 271.11% . In addition, as of December 31^st 2005, Pride Tanzania had active borrowers totaling 71,315.

Continue reading “Hivos-Triodos Fund Loans 1.18 million to Pride Tanzania”