MICROCAPITAL BRIEF: responsAbility Social Investments AG Makes Debt Investments Totaling $1.7m in MBK Ventura of Indonesia, COOPAC Norandino of Peru and COAC Mushuc Runa of Ecuador

responsAbility Social Investments AG (responsAbility), an investment manager founded in 2003 in Switzerland, reported to MicroCapital that it recently made four debt investments totaling USD 1.7 million in microfinance institutions (MFIs) MBK Ventura of Indonesia, COOPAC Norandino of Peru and COAC Mushuc Runa of Ecuador.

MICROCAPITAL BRIEF: European Fund for Southeastern Europe (EFSE) Loans $26.7m to Raiffeisenbank EAD of Bulgaria for Housing Finance

The European Fund for Southeastern Europe (EFSE) has recently signed a loan of EUR 20 million (USD 26.7 million) to Raiffeisenbank EAD (Joint Stock Corporation) of Bulgaria for the provision of loans to low-income households for renovating, enlarging or purchasing their homes.

MICROCAPITAL BRIEF: India’s Finance Ministry Asks Banks to Ensure That Microfinance Institutions (MFIs) to Which They Lend Cap Lending Rates at 24%

The financial services secretary of India, Mr R Gopalan, has written a letter to public-sector banks asking them to ensure that the microfinance institutions (MFIs) to which they lend on a wholesale basis do not charge more than 24 percent interest to retail borrowers.

MICROCAPITAL BRIEF: Article Defends Indian Microfinance Institutions (MFIs) from Calls to Rein in Profitability

An article was published recently on the website of the Economic Times newspaper defending the Indian microfinance industry from more regulation, especially caps that might restrict the profitability of microfinance institutions (MFIs).

MICROCAPITAL BRIEF: Social Investment Company responsAbility Makes Debt Investments Totaling $2.5m in FINCA Kosovo and fondiBESA of Albania

responsAbility Social Investments AG (responsAbility), a social investment company founded in 2003 in Switzerland, reported to MicroCapital that it made four debt investments during the month of August totaling EUR 2 million (USD 2.5 million) to microfinance institutions (MFIs) Foundation for International Community Assistance (FINCA) Kosovo and fondiBESA of Albania.

MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Report Recommends Withdrawal of Priority Sector Status from Microfinance Institutions (MFIs)

An unreleased report by a committee of the Reserve Bank of India (RBI) that was recently leaked to the Indian newspaper Economic Times recommended that RBI withdraw the priority sector status of microfinance institutions (MFIs), which allows MFIs borrow at lower interest rates.

MICROCAPITAL BRIEF: Credit Awareness Nigeria Urges Banks to Provide Low-Income Groups with Better Access to Microfinance Products

At the Lagos State Conference on Credit Awareness, Credit Awareness Nigeria, a nonprofit organization which aims to promote financial literacy, recently called on banks to provide low-income groups with better access to financial services.

MICROCAPITAL BRIEF: Indian Microfinance Institutions (MFIs) Under Sa-Dhan to Lower Interest Rates by 2-3%

Officials from Sa-Dhan, an Indian microfinance industry association, announced that some of its 223 member microfinance institutions (MFIs) have agreed to lower interest rates by 2 percent to 3 percent.

MICROCAPITAL BRIEF: Microcredit Regulatory Authority of Bangladesh Will Soon Finalize Microfinance Lending Rates

The Microcredit Regulatory Authority (MRA) of Bangladesh will soon finalize the lending rate for the country’s microfinance institutions, announced the chairman of the MRA, Dr Atiur Rahman, at a seminar in Bangladesh, according to a recent article [1].

MICROCAPITAL BRIEF: South Korea to Investigate Interest Rates Charged by Microfinance Institutions

The South Korean Financial Services Commission, South Korea’s financial industry regulator, announced that it will begin an investigation into the interest rates charged by microfinance institutions on loans and that it will implement corrective action as necessary.

MICROCAPITAL BRIEF: National Microfinance Bank (NMB) Launches ‘Juhudi’ Loan Program to Improve Access to Microcredit in Tanzania

The National Microfinance Bank (NMB), a commercial bank in Tanzania, has announced its intentions to provide ‘Juhudi’ loans of TSH 5 million (USD 3,300) to TSH 500 million (USD 330,000) to entrepreneurs in the country. According to Mr Kees Verbeek, the chief commercial officer of NMB, the issue for entrepreneurs is not whether loans are available, but rather if the interest rates, which reportedly vary between 18 to 25 percent in Tanzania, are affordable. Juhudi loans will be distributed at a 15 percent annual interest rate.

MICROFINANCE PAPER WRAP-UP: Why Microfinance Take-up Rates Are Low & Why It Matters, by Dean Karlan, Jonathan Morduch and Sendhil Mullainathan

By Dean Karlan, Jonathan Morduch and Sendhil Mullainathan, published by Financial Access Initiative, June 2010, available at: http://financialaccess.org/sites/default/files/RFN11_Why_microfinance_takeup_rates_are_low%286-17-10%29.pdf

Evidence indicates that under half of eligible households participate in microfinance. In this paper, Mr Karlan, Mr Morduch and Mr Mullainathan begin by reviewing why take-up rates are important and how they can be measured. Data from thirteen projects show that take-up rates vary from 2 to 84 percent of eligible individuals.

MICROCAPITAL BRIEF: Indian Microfinance Institutions (MFIs) Receive $84m in Private Equity Investment in the First Half of 2010

Indian microfinance institutions (MFIs) have reportedly attracted private equity investment totaling INR 3.86 billion (USD 84 million) between January and June of this year – an increase of approximately 15 percent over the first half of 2009. According to unnamed “industry experts,” the increase is a result of the high profitability of the majority of Indian MFIs, brought about by the high interest rates that MFIs charge (30-60 percent per year) and high repayment rates (exceeding 95 percent).

MICROCAPITAL BRIEF: More Details Emerge After Examination of Microfinance Institutions (MFIs) by Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC)

Following growing complaints of fraudulent practices leveled against several microfinance institutions (MFIs) and the failure some, the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) conducted an examination of the sector, which has revealed some irregularities and unethical practices.

MICROFINANCE PAPER WRAP-UP: The State of Iraq’s Microfinance Industry by The Louis Berger Group Incorporated, Produced for the US Agency for International Development (USAID)

By The Louis Berger Group Incorporated, produced for the US Agency for International Development (USAID), June 2010, 56 pages, available at: http://www.imfi.org/files/StateOfIMFI_USAID_en.pdf

The authors of this paper report that Iraq’s microfinance industry was established in 2003 and is now comprised of 14 microfinance institutions (MFIs) spread out over Iraq’s 18 provinces.

MICROCAPITAL BRIEF: Uzbek Association for Microfinance Institutions and Credit Unions to Implement New Group Loan Program

Uzbekistan is reportedly implementing a new microfinance development project with help from the United Nations Development Program, German Technical Cooperation Center (GTZ) and the International Finance Corporation (IFC).

MICROCAPITAL BRIEF: Microfinance Institution in India, SKS Microfinance, Reports NCDs, Commercial Paper Will Help Cut Lending Rates by 200 Basis Points

In a release from IndiaMicrofinance.com, it is reported that SKS Microfinance, an Indian microfinance institution (MFI) which claimed assets of USD 596 million for 2009, will be able to lower its retail lending rates by 200 basis points to 26.3 percent by lowering its costs of funds through the issuance of non-convertible debentures (NCDs) and commercial paper.