MFTransparency, a US-based nongovernmental organization (NGO) that provides information on credit products and pricing, has published updated pricing data for Cambodia. The updated data builds on the original data published in 2009 as part of its collection of international microloan product pricing data. Continue Reading »

Associate director Ms Madeleine Bunting of British newspaper The Guardian recently facilitated a discussion to address the question of whether microfinance helps reduce poverty with Mr Ha-Joon Chang, Cambridge University economist; Mr Ajaz Khan, microfinance advisor for Swiss nonprofit organization Care International; Mr David Roodman, senior fellow at US-based, nonprofit think tank Center for Global Development; and Mr Vikram Akula, chairperson and founder of Indian microfinance institution (MFI) SKS Microfinance [1]. Continue Reading »

Most Nigerian microfinance institutions (MFIs) reportedly continue to place conditions on borrowers who are seeking to take out loans, despite the stated policy of the Central Bank of Nigeria (CBN) to de-emphasize such requirements. Continue Reading »

Indian banks that have disbursed loans to microfinance institutions (MFIs) have reportedly prepared a blueprint for restructuring these loans. Under the proposal, Indian microfinance institutions (MFIs) would be given a maximum of ten years to repay loans to financial institutions at an interest rate of 12 percent. The loans that would be restructured under the proposal are estimated to total INR 130 billion (USD 2.8 billion) [1]. Continue Reading »

The US-based nonprofit data provider Microfinance Information Exchange (MIX) recently published an updated review of the methodology for categorizing microcredit interest rates proposed by Nobel laureate Dr Muhammad Yunus in his book “Creating a World Without Poverty”. The review, which uses 2009 data from approximately 1,020 microfinance institutions (MFIs) covering approximately 88 million borrowers, updates the findings of the previous review presented by MIX that uses 2008 data. Continue Reading »

The government of the Indian State of Andhra Pradesh reportedly is set to alter the Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act, which was enacted December 2010 in response to complaints of high interest rates and coercive loan recovery, by replacing the term “self-help group (SHG) women” with “below poverty line (BPL) households” [1] [2]. According to unspecified sources at the Andhra Pradesh Chief Minister’s Office, the purpose of the replacement is “to ensure that MFIs adhere to the existing stringent rules” by “bringing all kinds of MFI loan products, existing and future, under the purview of the Act [1].” Continue Reading »

Vikram Akula, chairman of SKS Microfinance, a for-profit microfinance institution (MFI) in India, has stated that the recommendations released by the “Malegam Committee” of the Reserve Bank of India (RBI) in response to unrest in microfinance in the Indian state of Andhra Pradesh, would give a boost to the microfinance sector by further encouraging bank lending to MFIs. Mr Akula also stated that the proposed microloan interest rate cap of 24 percent would not impact SKS Microfinance as its lending rate falls below the cap, but that it would impact smaller institutions that are yet to achieve efficiencies of scale. He viewed this recommendation as a measure to encourage consolidation within the sector. Continue Reading »

Representatives of the Indian microfinance industry recently commented on the likely impact of the USD 250 million Asian Development Bank (ADB) initiative that will offer guarantee facilities to banks that loan to microlenders in the Asia-Pacific region, as was covered by MicroCapital.org on December 22, 2010 [2]. Continue Reading »

On the website “livemint.com”, an Indian partner of the US-based Wall Street Journal, independent researcher MS Sriram presented his evaluation of the recommendations issued in response to the crisis in the microfinance sector in Andhra Pradesh by the Malegam Committee of the Reserve Bank of India (RBI). While he argues that the report has some positive aspects, he states that it largely fails to deliver. Continue Reading »

Salil Tripathi, director of policy at the British nonprofit Institute for Human Rights and Business, argues through the “Poverty matters blog” on the website of the UK’s Guardian newspaper that, while recent Reserve Bank of India (RBI) regulation is a positive step for the future of microfinance, the legislation passed by the state government of Andhra Pradesh reflects a monopolistic tendency. Mr Tripathi states that the move by local officials favors its own lending activities through self-help groups (SHGs) while it restricts the role of the private sector. On the other hand, he argues that the regulation suggested by RBI, while reducing choice and access to finance for the poor to a certain extent, is actually intended to protect the interests of the poorest [1]. Continue Reading »

SKS Microfinance, a for-profit microfinance institution (MFI) in India, has announced a universal cut in “effective” interest rates charged to microfinance borrowers from 26.7 percent to 24.6 percent. Continue Reading »

The Reserve Bank of India (RBI) recently stated that it has no solution for microfinance institutions (MFIs) whose clients refuse to repay their loans amidst the recent turmoil in India’s microfinance industry. Continue Reading »

MFTransparency, a US-based nongovernmental watchdog that focuses on interest rates in the microfinance industry, recently expanded its Transparent Pricing Initiative to Rwanda to educate citizens in that country on interest rates in an effort to impel microfinance institutions (MFIs) in the country to lower microfinance interest rates. Plans for this expansion were announced on this website in October. Continue Reading »

Dr Muhammad Yunus, founder of Grameen Bank and winner of the Nobel Peace Prize for his work in microcredit, has again spoken out against the commercialization of microfinance institutions (MFIs) and their deviation from the mission of poverty alleviation. Continue Reading »

responsAbility Global Microfinance Fund, a microfinance investment vehicle (MIV) operated by Swiss-based social investment company responsAbility Social Investments AG, announced that it would resume the acceptance of applications for shares. Continue Reading »

The market for Shariah loans, those that are in compliance with Islamic law, has reportedly been dominated by microloans, prompting several of Indonesia’s commercial banks to focus on offering the small loans in underserved areas. Continue Reading »

Bangladesh’s Microcredit Regulatory Authority (MRA) has enacted a new regulation capping microfinance institution (MFI) loan rates at 27 percent per year as of July 2011. Continue Reading »

Several major microfinance institutions (MFIs) in the Indian state of Andhra Pradesh have agreed to cap interest rates at 24 percent per year after a series of politically-triggered freezes on bank lending to MFIs that followed an uproar regarding debt collector harassment that was linked to a number borrower suicides. Continue Reading »