Reuters reports on a $15 million microfinance loan by the World Bank to the government of Bangladesh (see story). The capital city of Bangladesh, Dhaka, recently passed a Non-Motorized Transportation ban on major roads within the city. This jeopardizes rickshaw drivers’ economic stability. These newly-awarded funds will be directed at those whose livelihood is seriously threatened by the ban.

Continue reading “MICROCAPITAL STORY: World Bank makes $15 Million Microfinance loan to Bangladesh’s Palli Karma-Sahayak Foundation to Aid Rickshaw Drivers”

Sanvada, a Sri Lankan non-profit supported by the Centre for International Enterprise, and its founder, the Pathfinder Foundation, a Sri Lankan think tank, hosted an open forum on the Microfinance Institutions Act (MFIA). The MFIA, which would provide various regulations for microfinance institutions (MFIs), is scheduled to be debated in the Parliament of Sri Lanka this month (see 5/20/07 MicroCapital Story).

Continue reading “MICROCAPITAL STORY: Pathfinder Foundation, Sanvada, and the University of Colombo’s Dr. S. P. Premaratne Review Sri Lanka’s Microfinance Institutions Act (MFIA)”

The Economic Times, a division of the India Times, reports on the strength of the Indian microfinance industry, and its possible innovative role in the supply chain. Large companies like SHARE Microfin Limited, SKS, Basix and Spandana maintain vast customer networks. According to the MIX Market, the microfinance information clearinghouse, SHARE has 826,517 active borrowers, while SKS has 513,108. Basix reports 198,282 active borrowers, and Spandana, 916,261. Driven by the power of private equity investment, these companies hope to expand in the near future to over 5 million customers apiece. As reported by the Microcapital Monitor, in March of this year SKS received a private equity investment from Sequoia (a US-based private equity fund) and Unitus (a global microfinance accelerator) of USD 11.5 mn. To date, this had been the largest ever private equity investment in Indian microfinance. However, it was soon eclipsed by a USD 27 mn private investment to SHARE by Legatum (an international investment group) and Aavishkaar Goodwell (an India-based for-profit business development company). Although these insitutions aim to increase their reach in the interest of profit, this broad web of microloan consumers could be tapped for peddling insurance, money transfer, procurement and supply chain financing for agricultural and allied activities.

Continue reading “MICROCAPITAL STORY: Indian Microfinance Industry to Expand Outreach, Products, and Services”

Calcutta: Three public sector banks — Union Bank of India, Indian Bank and Corporation Bank — and the Life Insurance Corporation have picked up a 30 per cent stake in Financial Information Network & Operations Ltd (Fino) for about Rs 35 crore. Fino provides cost-effective technology solutions to help banks and insurance companies garner business from remote areas without setting up branches or ATMs. Continue Reading »

WASHINGTON— The World Bank today approved additional financing of US$15 million to the Government of Bangladesh, designed to support poor rickshaw-pullers that have been adversely affected by a ban on Non-Motorized Transport (NMT) on certain roads in Dhaka, the nation’s capital.

The additional financing to the Second Poverty Alleviation Microfinance Project, which was approved by the World Bank in January 2001, will help finance the costs associated with scaling up the Urban Microcredit component of the project to reach an underserved segment of the urban poor (poor rickshaw-pullers). The financing will be passed-on by the Government as a grant to the apex microfinance institution Palli Karma-Sahayak Foundation (PKSF) for activities that will scale up the project’s impact and development effectiveness. Continue Reading »

Development Credit Bank (DCB), an Indian private sector bank, is creating its own microfinance business with the help of the Aga Khan Development Network (AKDN), the manager of a network of ten microfinance institutions (MFIs). DCB is seeking to increase its financing of agricultural loans. The Reserve Bank of India (RBI), the nation’s central bank, requires that 40 percent of the advances of the DCB be used for what are known as “priority sectors” (see Business Standard), which include the mentioned loan type. DCB is currently below the requirement, with 32.73 percent lent within priority sectors.

Continue reading “MICROCAPITAL STORY: India’s Development Credit Bank (DCB)Partners with the Aga Khan Development Network’s (AKDN) Aga Khan Agency for Microfinance (AKAM)”

SEEMA (name changed), who is serving a life sentence at the female prison of the Yerawada Central Jail, for the first time had a cash amount of Rs 10,000 in her bank account when she sought parole to visit her ailing mother and children.

She is a member of a self-help group of 13, each of whom could deposit more than Rs 12,000 in their accounts with the State Bank of India (SBI) over the last one year. Behind this success story are the SBI and the Janeev Sanghatana, who introduced the micro-credit system in the jail for the first time last year. Continue Reading »

Mumbai, May 28: Buoyed by the growing success of micro-finance movement in the country, National Bank for Agriculture and Rural Development (NABARD) has proposed to set up an institution for this purpose which would have a corpus of Rs 500 crore in three years.

The micro-finance institution, to be set up on a pilot basis, is aimed at providing easy credit to needy farmers who are now at the mercy of local money lenders. “I intend to start a micro-finance institution with the approval of my Board. Its a pilot project, initially the investment will not be very high but it will reach Rs 500 crore in three years,” NABARD Chairman Y S P Thorat said. Continue Reading »

Madison, WI—Seated in front of a camera in Madison, Wisconsin, for the Digital Video Conference on Self-help Groups in India, Pete Crear, President and CEO of World Council of Credit Unions (WOCCU), shared insights from the US credit union experience in microfinance with Indian counterparts gathered in Chennai, India.

To date, microfinance in India has been focused almost exclusively on the provision of microcredit. As in other parts of the world, people there are recognizing that the poor need access to more than credit to work their way out of poverty. Continue Reading »

The micro-credit division of Malaysia based CIMB bank, CIMB Express, is aiming to have a loan book of USD 152 million by end of this year, with RM300 million (USD 88 million) already lent as of March 2007.

Continue reading “MICROCAPITAL STORY: South Asian Bank CIMB intends to deliver RM515 million (USD 152 million) in Micro-credit Loans”

Unitus, a non-profit consultancy and venture capital firm, has announced three new microfinance institutions (MFIs) in India which it will bring under its wing as partners. By doing so Unitus will provide consultancy advice and financial support, aiming to accelerate the growth of each organisation, and by 2010 expects them to collectively serve more than 650,000 clients; a combined growth of nearly 1000%. Unitus partners are selected for their operational strength, growth strategies and leadership vision. Geof Davis, president and CEO of Unitus, has said that Adhikar, the Institute of Integrated Resource Management (IIRM), and Vardan Trust have all been chosen as they “embrace our philosophy of rapid, high impact growth.”

Continue reading “MICROCAPITAL STORY: Unitus Forms Three new Partnerships with Microfinance Institutions in India with Adhikar, IIRM, and Vardan Trust”

Western Union, a global leader in money transfer services, has confirmed a partnership with Sandana, a microfinance institution housed in the city of Hyderabad, the capital of Andhra Pradesh. Money transfer services will be available via Western union from all 280 of Sandana’s branches, which cover both the rural and urban populations of the states of Andhra Pradesh and Karnataka.

  Continue reading “MICROCAPITAL STORY: Indian Microfinance Firm Sandana Partners up with Global Money Transfer Company Western Union” 

Continue Reading »

Private firms Legatum and Aavishkaar Goodwell have agreed to a joint equity investment of USD 27 mm in the capital shareholdings of SHARE Microfin Limited (SML), a microfinance institution (MFI) of India. With a USD 25 mm share of the equity investment, Legatum gains the majority interest of SML, while Aavishkaar Goodwell acquires a minority interest in the MFI with USD 2 mm. The equity investment reaches a record high for Indian SMLs, becoming the largest equity investment of capital ever received by an Indian MFI. SML speculates that the new finances will provide an additional five million loans across five years.
Continue reading “MICROCAPITAL STORY:SHARE Microfin Ltd. Receives Historically Largest Indian Microfinance Equity Investment from Legatum and Aavishkaar Goodwell”

ABN-AMRO bank, based in the Netherlands, has recently reported strong growth in its Indian operations, including the microfinance sector. For the year ending March 31st 2006 the bank’s total profit in India grew 23.7% to 2.4bn rupees (EUR 42.9mm). For the first part of 2007 (January – March) ABN-AMRO said their Indian operations had their best quarter ever, as the balance sheet grew 52.9% to Rs. 235.4bn (EUR 4.2bn) and revenue increased by 48%.

Continue reading “ABN-AMRO Reports Strong First Quarter Growth in India and its Microfinance Operations”

Winners of the 2007 Srijan Microfinance business Plan Competition Award, based in India, were recently announced. The awards are organised by Intellecap, a consultancy firm which works in business innovation, capacity development, and investment initiatives in the development sector, and the Aavishkaar Goodwell India Microfinance Development Company (AGI), which runs microfinance venture capital funds. The top 3 awards include cash prizes of 150,000 rupees (USD 3,600), Rs. 100,000 (USD 2,400) and Rs. 50,000 (USD 1,200) as well as mentoring support from Intellecap for the new initiatives. The organisers say the competition intends to recognise new ideas and encourage innovative thinking and entrepreneurial spirit in the sector.

Continue reading “Microfinance Innovation Competition Run by Intellecap and Aavishkaar Goodwell India Declares Vijaya Switha of Chitrika as Winner with Runners Up from Rickshaw Bank and DhanaX”

President Gloria Macapagal Arroyo of the Philippines announced in a bullish speech given at the 2^nd National Convention of the Account Officers of the Social Security System (SSS) that the SSS would move into “investment areas like microfinance.” Since the SSS funds have increased from 196.3bn Philippines Pesos (USD 4.1bn) in 2005 to P225bn (USD 4.8bn) in 2006, overcoming what President Arroyo has called ‘insurmountable challenges’, it aims to widen its market and get into further investment areas.

Continue reading “President Arroyo urges Philippines Social Security System to Move into Microfinance Investments after Overcoming “Seemingly Insurmountable” Challenges”