by the MicroCapital Team -

MICROCAPITAL BRIEF: Sindhuja Microcredit of India Raises $8.7m in Equity Sale to Carpediem Capital, Nordic Microfinance Initiative

The majority owners of Sindhuja Microcredit, a lender to women in India, recently sold minority shareholdings to Carpediem Capital, an India-based private equity fund manager, and the Nordic Microfinance Initiative (NMI), a public-private partnership based in Norway, for a total of USD 8.7 million. The sizes of the stakes have not been released. Carpediem also invested USD 4 million in Sindhuja in 2019. India’s Vidura Capital served as advisor on the transaction.

The promoters of Sindhuja, Abhisheka Kumar and Malkit Didyala, issued a statement that, “Our customers, self-employed rural women, are the most vulnerable in the COVID–19 world… with their livelihoods under direct threat, this funding will be used to

by Madigan Ruch -

MICROCAPITAL BRIEF: Accion Venture Lab Takes Equity Stake in Colombian Fintech R5, Provider of Online Loans, Car Insurance

Accion Venture Lab, a unit of US-based NGO Accion, recently purchased an unspecified amount of equity in Colombian financial technology (fintech) firm R5, an online insurance and lending platform. Most of R5’s borrowers pledge vehicles as collateral and use the loan proceeds for

by the MicroCapital Team -

MICROCAPITAL BRIEF: 9 Microfinance Investment Vehicles Coordinate Response to Effects of Pandemic on MFIs, MSMEs in 80 Countries

The COVID-19 pandemic and efforts to reduce its health impacts have had major negative economic consequences for micro-, small and medium-sized enterprises (MSMEs). These enterprises thus are having difficulty repaying the loans they have outstanding from microfinance institutions (MFIs) and other retail lenders, leading to liquidity challenges for these lenders. In response, nine investors in these lenders, which have an aggregate of USD 15 billion invested in 80 low- and middle-income countries, are working together to support the long-term viability of the retail financial services providers (FSPs).

The nine investors, which manage a range of microfinance investment vehicles (MIVs) and other funds seeking to generate positive social impact, have arrived at a non-binding agreement to

by Madigan Ruch -

MICROCAPITAL BRIEF: Reserve Bank of India Moves to Increase Liquidity for MSMEs, Farmers Impacted by COVID-19 via MFIs, NBFCs

In response to the COVID-19 pandemic, the Reserve Bank of India (RBI), India’s central banking authority, recently moved to increase the supply of credit to farmers and micro-, small and medium-sized enterprises (MSMEs) via microfinance institutions (MFIs) and non-banking finance companies (NBFCs). These steps include

by Madigan Ruch -

MICROCAPITAL BRIEF: MFIs in Bosnia and Herzegovina, Georgia, India, Panama, Tajikistan, Uzbekistan Refinance $38m in Microloans via Sales to IIV Mikrofinanzfonds

Microfinance institutions (MFIs) in six countries recently sold non-securitized loan claims for USD 7.8 million-plus EUR 28 million (USD 30.4 million) to IIV Mikrofinanzfonds, a fund managed by Germany-based Invest in Visions (IIV). While the MFIs have not been named, they are located in

by the MicroCapital Team -

MICROCAPITAL BRIEF: Tarayana Foundation Offers Rural Microfinance, Mobile Repayments via B-Ngultrum of Bhutan Telecom

Tarayana Micro Finance recently became licensed as a microfinance institute (MFI), independent of its incubator, the Tarayana Foundation of Bhutan. The MFI provides individual and group loans in rural areas, with interest rates of 15 percent. Smaller “classic” loans support existing enterprises, while larger loans are available for “pre-selected livelihood models with a proven market and reliable value chain.” These larger “development” loans are disbursed in the form of “materials and

by the MicroCapital Team -

MICROCAPITAL BRIEF: Bangladesh Capping Interest Rates at 9%, Observers Warn Microfinance Lending Would Become “Unviable Overnight”

As of April 1, all lending in Bangladesh is to occur at a cost of no more than 9 percent per year. The only exception is for loans via credit card. In advance of the deadline, the average lending rate for cottage, micro- and small enterprises (CMSEs) reportedly stands at 16 percent. Economist Zahid Hussain argued, “The 9 per cent interest rate cap will

by the MicroCapital Team -

MICROCAPITAL BRIEF: Fusion Microfinance of India Borrows $4.9m from BNP Paribas

France-based BNP Paribas informed MicroCapital that today it disbursed a loan of INR 350 million (USD 4.9 million) to Fusion Microfinance, which offers microloans in amounts from INR 3,000 (USD 42) to INR 60,000 (USD 840) with terms of five months to

by the MicroCapital Team -

SPECIAL REPORT: Burkinabe PM, Luxembourg Minister Attend SAM Opening Ceremony with Senegalese, BCEAO High Representatives

At SAM 2019the opening ceremony of SAM yesterday, in the presence of Prime Minister Christophe Joseph Marie Dabiré of Burkina Faso, about 900 conference participants had the opportunity to hear commentary from several prominent government officials on the status of financial inclusion in the region. Norbert Toé, Vice Governor of the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), explained that his institution has made financial inclusion a priority, with the goal of increasing to 75 percent the portion of people in West Africa who have access to affordable financial services. He explained that this is motivated by the idea that financial inclusion supports sustainable development, economic growth and several of the UN Sustainable Development Goals, including gender equity, access to jobs, lower inequality and less hunger. Despite challenges in the realm of technology and other arenas, Dr Toé foresees the regulatory changes that BCEAO is now developing will lead to a “safe, resilient and inclusive financial sector.”

Zahra Iyane Thiam, the Senegalese Minister of Microfinance, Social Economy and Solidarity, described how access to finance affects so many aspects of people’s lives. In addition to helping with access to education and health, it allows entrepreneurs to create wealth, which promotes stability. Ms Thiam expressed concern, however, that

by Anna Gravois -

MICROCAPITAL BRIEF: RBI Raises Caps on Microfinance Loan Size, Microborrower Income

The Reserve Bank of India (RBI), India’s central banking authority, recently raised the income limit for households to be eligible for microfinance loans from INR 100,000 (USD 1,400) to INR 125,000 (USD 1,760) in rural areas and from INR 160,000 (USD 2,250) to INR 200,000 (USD 2,800) in urban areas. RBI also increased the

by the MicroCapital Team -

MICROFINANCE EVENT: SAM (Semaine Africaine de la Microfinance / African Microfinance Week); October 21 – 25, 2019; Ouagadougou, Burkina Faso

The SAM 2019fourth SAM (Semaine Africaine de la Microfinance) includes five full days of trainings, conference sessions, an investors’ fair, an innovators’ village and research presentations, all on the theme “Pathways Towards Impact: African Inclusive Finance for the Sustainable Development Goals.” The training presenters are ADA, Amarante Consulting, Arendt, Banca Etica, BNP Paribas, BRS, Caritas Africa, Food and Agriculture Organization, Graine, Grameen Crédit Agricole Foundation, the Microinsurance Network, MicroSave Consulting, Pamiga,

by the MicroCapital Team -

MICROCAPITAL BRIEF: Myanmar Lowers Microloan Interest Rate Cap from 30% to 28%, Compulsory Savings Minimum from 15% to 14%

The Ministry of Planning and Finance of Myanmar reportedly decreed recently that microfinance institutions (MFIs) must start charging less for loans immediately. Daw Phyu Yamin Myat, the general secretary of the 107-member Myanmar Microfinance Association, reportedly stated that a minimum of

by the MicroCapital Team -

MICROCAPITAL BRIEF: MASLOC Halves Interest Rates to 12% as Bank of Ghana Starts $172m Bailout of Microfinance Industry

The Ghanaian government’s Microfinance and Small Loans Centre (MASLOC), a provider of retail and wholesale microcredit, recently received approval to cut its annual interest rate from 24 percent to 12 percent. Meanwhile, the institution has received GHC 75 million (USD 14 million) from the government to expand its operations. This expansion includes a plan to have offices in 70 percent of the nation’s districts by the end of 2019 and

by the MicroCapital Team -

MICROCAPITAL BRIEF: Oikocredit Buys $3.3m in Equity in Laudex, Education Lender in Mexico

The Netherlands’ Oikocredit recently paid USD 3.3 million to purchase an equity stake of unspecified size in Laudex, a lender to low- and moderate-income Mexican students pursuing undergraduate and graduate degrees around the world. The institution has an “online approval platform” and a “risk-based pricing model” with a maximum annual interest rate of 29.5

by the MicroCapital Team -

SPECIAL REPORT: SAM (African Microfinance Week) Scheduled for October 21-25, 2019, in Ouagadougou, Burkina Faso

Luxembourgish NGO ADA recently announced that the next SAM (Semaine Africaine de la Microfinance) will be held in Ouagadougou, Burkina Faso, from October 21 to 25, 2019. The themes for this fourth SAM include Agricultural Finance; Macro-Level Alignment with the UN Sustainable Development Goals; Digital Finance and Fintech; Cash Transfers; Gender Inequality; and Small & Medium Enterprise Development and Youth Employment. In addition to the conference sessions on October 22 and October 23, there will be an Investor’s Fair, an Innovator’s Fair, “Research Meets Africa” discussions and 20 free

by the MicroCapital Team -

MICROCAPITAL BRIEF: C-Quadrat’s Dual Return Vision Microfinance Fund Lends in 11 Countries, Including for Women in Bolivia, Farmers in China

C-Quadrat Asset Management, a unit of Austria-based C-Quadrat Investment, recently informed MicroCapital that it disbursed loans to microfinance institutions (MFIs) in 11 countries during December 2018. The identities of the MFIs and the amount each borrowed remain confidential.

One of the MFIs is a Bolivian NGO providing health and financial services to women via 70 urban and rural locations. The MFI offers loans, financial education, health education and testing for cervical

by the MicroCapital Team -

MICROCAPITAL BRIEF: Georgia Cracking Down on Consumer “Microfinance,” Capping Interest Rates at 50%

Georgian Prime Minister Mamuka Bakhtadze reportedly stated recently that 630,000 of the 3.7 million people in Georgia have debt they cannot repay. Questionable loans have been disbursed by banks, online lenders and others using the term “microfinance” to describe their services.

One woman earning GEL 150 (USD 58) per month reportedly was able to borrow GEL 5,000 (USD 1,900) from a bank for a

by Nicholas Galimberti -

MICROCAPITAL BRIEF: With Delinquency Up 24%, Sri Lanka Paying Off Women’s Microfinance Loans, Capping Microloan Interest Rates

Sri Lanka’s Ministry of Finance recently announced that it has placed a cap on the interest rate microfinance institutions (MFIs) can charge borrowers at 30 percent per year. This comes as the Central Bank of Sri Lanka has found the microfinance sector’s gross non-performing loan account