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Thursday, September 22, 2011

MICROCAPITAL BRIEF: MasterCard Foundation, UN Capital Development Fund (UNCDF) Announce $23m Expansion of MicroLead Program to Promote Savings in Developing Countries

The MasterCard Foundation, a Canada-based philanthropic organization that supports projects in the microfinance and education sectors, has agreed to grant USD 23.5 million to the MicroLead program, a financial inclusion initiative that was designed by the United Nations Capital Development Fund (UNCDF), an investment facility intended to encourage private sector development. Continue Reading »

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Tuesday, March 8, 2011

MICROCAPITAL BRIEF: Mobile Technology as an Alternative Channel for Foreign Aid Delivery May Increase Access to Finance

Recent developments in mobile technology, including biometric identification and point-of-sale devices, are being considered as alternatives to current foreign aid delivery mechanisms. The possible shift towards electronic transfers of foreign aid comes at a time of rising concern regarding its delivery methods and effectiveness. Continue Reading »

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Monday, November 22, 2010

MICROCAPITAL BRIEF: Policy Studies Organization (PSO) Releases “Microfinance, Commercialization and Ethics” by Reinhard Schmidt of Johann Wolfgang Goethe-Universitat Frankfurt am Main

Poverty & Public Policy, a journal published by the Policy Studies Organization (PSO), a US-based policy think tank, has announced the release of a paper titled, “Microfinance, Commercialization and Ethics” by Reinhard Schmidt of Germany’s Johann Wolfgang Goethe-Universitat Frankfurt am Main. Continue Reading »

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Wednesday, November 10, 2010

MICROFINANCE PAPER WRAP-UP: The Impact of International Influence on Microbanks’ Performance: A Global Survey

By Roy Mersland, Trond Randoy, Reidar Oystein Strom, forthcoming in the International Business Review (2010), available for purchase at http://dx.doi.org/10.1016/j.ibusrev.2010.07.006 Continue Reading »

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Tuesday, October 19, 2010

MICROCAPITAL BRIEF: Indian Microfinance Institution Equitas Securitizes $22m in Loans, Arranged by IFMR Capital, Subscribed to by IFMR Capital, UTI Mutual Fund, HDFC Bank and Reliance Capital

Microfinance institution (MFI) Equitas Microfinance India Private Limited has announced that it has securitized loans totaling INR 1 billion (USD 22 million). Continue Reading »

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Friday, October 15, 2010

MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Labels IPO of Indian Microfinance Institution SKS “A Critical Transition”

A paper recently published by CGAP (Consultative Group to Assist the Poor) discusses how initial public offerings (IPOs) can shape the microfinance industry. Continue Reading »

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Friday, October 8, 2010

MICROCAPITAL BRIEF: Former Sun MicroSystems CEO Vinod Khosla Discusses Benefits of For-Profit Microfinance Institutions (MFIs)

Vinod Khosla, former CEO of Sun MicroSystems and founder of venture capital firm Khosla Ventures, argues that both for-profit and nonprofit microfinance models can serve a beneficial role, but ultimately points to for-profit status as the goal microfinance institutions (MFIs) should be aiming achieve. Continue Reading »

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Thursday, September 16, 2010

MICROCAPITAL BRIEF: Government of Ebonyi State, Nigeria, Plans to Disburse $1.3m in Microfinance Loans to Low-Income Groups and Individuals Within the Year

The government of Ebonyi state in Nigeria recently announced that it will disburse NGN 200 million (the equivalent of USD 1.3 million) in microcredit loans at an annual interest rate of five percent to low-income groups and individuals within the year. Continue Reading »

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Tuesday, November 3, 2009

PRESS RELEASE: Actress Yeardley Smith Donates $1.14m to Grameen Foundation, Microfinance Institution Fonkoze of Haiti

Source: Grameen Foundation. Continue Reading »

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Wednesday, August 26, 2009

MICROCAPITAL.ORG STORY: Controversial Reuters Blog On Microfinance Investments Generates Comments And Criticisms

In a blog by Felix Salmon controversially entitled ‘Don’t invest in microfinance’ [1], Mr Salmon carries on the recent debate about the viability of investing in the microfinance sector. The blog was initiated soon after a series of provocative articles on the Wall Street Journal [2] that likened the increasing valuations of MFIs in by participants in the private equity sector to a ‘bubble’ that was not sustainable. Mr Salmon notes in his blog that it is ‘much better that microfinance organizations grow a little more slowly, and much more organically, either by getting grants rather than loans, or by funding themselves locally’ rather than to grow rapidly using private-equity backed microfinance dollars. He stated that whilst private equity funding was ‘the only way to scale up quickly’, he added that ‘speed is the enemy of quality’. Mr Salmon further noted that a lot of institutional investors reap their profits from taking on board the significant foreign currency risks that are inherent in most microfinance investment transactions. He added that these significant profits will mean that the new organizations that have started to offer hedging services to MFIs are unlikely to be hugely successful. Foreign currency hedging in microfinance is an issue that has been covered in previous Microcapital.Org stories [3], [4]. He ended the blog with a blanket statement that ‘western do-gooders’ should provide funds to grassroots organizations and added that ‘if [investors] want to make a profit, they should stick to more conventional investments’. He also noted that the participation of institutional investors in the microfinance sector has at times exacerbated the problem of over-indebtedness Continue Reading »

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Wednesday, March 18, 2009

MICROCAPITAL STORY: Omidyar-Tufts $100m Microfinance Fund Earns 12 Percent Return and $6.6m for Tufts University in 2008

In 2005, MicroCapital reported enthusiastically that Pierre Omidyar, founder of eBay, and his wife donated USD 100 million to their former school Tufts University, to be managed as a for-profit fund exclusively for investments into microfinance initiatives. At the time, the Omidyar-Tufts Microfinance Fund was the largest single for-profit microfinance fund in the world. Continue Reading »

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Tuesday, August 26, 2008

MICROCAPITAL STORY: Philip Vassiliou of Legatum Capital Publishes Editorial Supporting For-Profit Microfinance in The Economic Times

In a recent Economic Times editorial, Philip Vassiliou, managing director of Legatum Capital, an international investment firm, argues that, “to reach its full potential, the microfinance sector must embrace free market principles of competitive pricing and commercial incentives.” He also believes that “modifying these incentives, however noble the intention, will only damage the natural development of the sector.” His comments come at a time of fierce debate over the benefits of commercial microfinance. Continue Reading »

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Friday, August 1, 2008

MICROCAPITAL STORY: Nobel Laureate Muhammad Yunus Speaks Out Against For-Profit Microfinance from Asia-Pacific Microcredit Summit

Muhammad Yunus, the microfinance pioneer and winner of the Nobel Prize for founding the Grameen Bank, spoke out against the growing trend of commercial microfinance. In an interview with CNNMoney.Com, Yunus chastised those involved with for-profit microfinance by saying that “poor people should not be considered an opportunity to make yourself rich.” These remarks come at the start of the Asia-Pacific Regional Microcredit Summit 2008 in Bali Indonesia. Continue Reading »

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Friday, July 18, 2008

MICROCAPITAL STORY: Indian Village Council Issues Gram Sabha Credit Cards (GSCCs) for Microfinance Loans

In the rural Indian village of Jaltara, the village council is extending microfinance loans to villagers by issuing Gram Sabha (village council) Credit Cards (GSCCs). As part of the government-sponsored Madhya Pradesh Rural Livelihoods Project, the council issues the GSCCs, which serve as loans from the village treasury, instead of distributing money. The size of each loan, which must be repaid in six months, and the repayment schedule are decided in the council meetings. Continue Reading »

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Monday, July 7, 2008

MICROCAPITAL STORY: Pakistani Government Agency PPAF (Pakistan Poverty Alleviation Fund) Launches USD $45 million PRISM (Program for Increasing Sustainable Microfinance)

Pakistan’s PPAF (Pakistan Poverty Alleviation Fund), a government program to support poverty alleviation, recently launched PRISM (Programme for Increasing Sustainable Microfinance). PRISM’s main objective is to assist Pakistani microfinance institutions that largely rely on donor funding in forging new partnerships with commercial funders. The program’s establishment represents an acknowledgement by policy makers that Pakistan’s microfinance institutions have proven themselves to be commercially viable enterprises and worthy targets of commercial investment in lieu of grant support. The PRISM program has an operating budget of USD $45 million, and involves partnerships with 72 organizations working in 33,000 villages. In addition to government support, PRISM was financed by a USD 35 million loan from IFAD (International Fund for Agricultural Development). Continue Reading »

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Tuesday, April 29, 2008

MICROCAPITAL STORY: Crackdown on Crooked Microfinance in Rwanda

Rwandan Prosecutor General, Martin Ngoga announced that fifteen former microfinance institution managers had been arrested over a period of four days for defrauding depositor money after a year-long investigation following a government shut-down of 8 bankrupt microfinance institutions in June 2006. Continue Reading »

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Monday, February 18, 2008

MICROCAPITAL STORY: IDB Makes Donation to Billion Dollar Standard & Poor’s

The Inter-American Development Bank (IDB) will subsidize USD 405,000 of a Standard & Poor’s (S&P) project to develop a globally accepted rating system of microfinance institutions (MFIs). S&P is a rating service and a division of McGraw-Hill Companies. The actual funding will be by the Multilateral Investment Fund (MIF), a fund administered by the IDB to encourage private sector development of micro-enterprise in Latin America and the Caribbean (LAC).

The stated goal and rationale of this project is to increase capital flow to micro-banks. However, with MIF’s public money subsidizing a company with over USD 1 billion in annual profits, such justification is thin. Top micro-banks do not suffer from too little investment, but rather there is now far too much money chasing too few micro-banks.  Has the IDB gotten it exactly wrong? Continue Reading »

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Thursday, December 20, 2007

PRESS RELEASE: “Microfinance, Subsidies and Dynamic Incentives” Study Released By US University

The authors assert that, “Private moneylending and subsidised microfinance can complement each other at certain levels of subsidy.” Continue Reading »

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