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]. Continue Reading »

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. Continue Reading »

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. Continue Reading »

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. Continue Reading »

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). Continue Reading »

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. Continue Reading »

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. Continue Reading »

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). Continue Reading »

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. Continue Reading »

Event Name: Microfinance Transparency’s Kenya Data Launch Webinar

Event Date: June 29, 2010 at 10:00am–11:30am EDT (5:00pm–6:30pm Nairobi, 4:00pm–5:30pm CEST, 7:30pm–9:00pm Delhi).

Event Location: The internet Continue Reading »

Bank Respublika, a private commercial bank in Azerbaijan, has reduced interest rates in order to increase lending flow for small and medium-sized enterprises. According to an unnamed bank official, “High levels of liquidity allow the bank to offer the above loan products on unrestricted long-term basis to entities engaged in entrepreneurial activity.” As of April 1, 2010, Bank Respublika held total capital of approximately AZN 56.1 million (USD 9.7 million) and total assets of AZN 334.5 million (USD 415.5 million). Continue Reading »

Ujjivan Financial Services, an Indian microfinance institution, announces that it will reduce borrowing rates on new and renewal loans by 190-290 basis points. As a result, new business loans will cost 23 percent per annum and renewal loans will cost 22 percent per annum beginning in July 2010. As MicroCaptial reported on May 4, 2010, Bandhan Financial Services Private Limited, another Indian microfinance institution, reduced its annual rates on loans possibly triggering the Ujjivan reduction. Continue Reading »

MFTransparency, a non-governmental organization which promotes accurate and transparent pricing in the microfinance industry, recently expanded its work to launch its transparent pricing initiative in both Ecuador and Bolivia.  The initiative is being funded by the Ford Foundation, which provided a grant (amount unspecified) to MFTransparency to expand its data collection and dissemination efforts in Argentina, Bolivia, Colombia and Ecuador. Continue Reading »

Kerala and Andhra Pradesh, two states in southern India, have mandated that non-banking financial companies (NBFCs) and microfinance institutions (MFIs) register under local moneylending laws, but The Shriram Transport Finance Company (STFC), an NFBC in India, has challenged this mandate in Supreme Court [1]. Continue Reading »

Vastushodh Projects Private Limited, a real estate development company in India, is pairing up with The Micro Housing Finance Corporation (MHFC) to provide housing for the urban poor. MHFC has total funds of INR 22.5 million (USD 483,000) and total share capital INR 22 million (USD 473,000) as of March 2009 [1]. The organizations are setting up a micro township located in Yevat, a village in the Pune district of Maharashtra, located in southwestern India. Continue Reading »

Ecuador’s central bank, Banco Central del Ecuador (BCE), recently further reduced the cap on annual interest rates to 30.5 percent from 33.9 percent for retail microlenders, and to 27.5 percent from 33.3 percent for all others lenders [1]. Since 2007, when the national government enacted banking reforms allowing the central bank to set a maximum interest rate for all banking institutions, the cap for microlenders has been dropping. According to Javier Vaca, the executive director of Red Financiera Rural (RFR), an Ecuadorian network of organizations that is focused on facilitating and promoting access to financial services, this forces microlenders to increase the average amount of their loans. Some are left with no choice but to sell their portfolios to larger institutions with lower fixed costs [2]. Continue Reading »

Bandhan Financial Services Private Limited, a microfinance institution (MFI) based in Kolkata, India, has decreased its annual interest rate on loans from 24 percent to 19.1 percent on a reducing balance. Continue Reading »

A recent article featured in the New York Times newspaper entitled, “Banks Making Big Profits From Tiny Loans,” argues there is a growing mission drift among microfinance providers and discusses the efficacy of microloans and the need for more transparency in the industry. Continue Reading »