“Multiple borrowing was endemic,” in Bangladesh as of 2008, says Shameran Abed, the director of microfinance at Bangladesh-based Brac International, “but we didn’t know if this was bad, although we knew it was a risk.” Mr Abed was speaking this morning at the opening plenary of the last day of European Microfinance Week, which is organized by the Luxembourgish NGO European Microfinance Platform (e-MFP). In the past, he explained, the members of borrowing groups were good at letting Brac staff know who was a good credit risk. As the market was getting saturated, “Groups became less cohesive, so we couldn’t totally rely on them to tell us if individuals were becoming overindebted.” Continue reading
Absolute Portfolio Management (APM), an arm of Austria-based asset management group C-Quadrat, recently informed MicroCapital that it has disbursed credits worth approximately USD 1.5 million to an unspecified microfinance institution (MFI) in Ecuador from its Vision Microfinance funds – the Dual Return Fund-Vision Microfinance and the Dual Return Fund-Vision Microfinance Local Currency . Continue reading
MicroCapital: Please describe one of the key issues to be covered this year at European Microfinance Week.
Christoph Pausch: The question of over-indebtedness is still the major risk for the sector, as identified in the most recent Banana Skins survey. We had a very successful plenary last year exploring the issue from a research perspective. This year, we’re taking a very different approach by bringing CEOs of leading microfinance institutions (MFIs) from three countries – Bangladesh, Morocco, and Mexico – to discuss how they’ve been dealing with the issue. Each of these countries has had a different experience, with Bangladesh having successfully averted a potential crisis by slowing market growth (as described in an excellent paper by Stuart Rutherford and Greg Chen). Morocco was one of the original “microfinance crisis” countries during 2008 and 2009, and the MFIs there have had an interesting experience in resolving the problems from that period. Finally, Mexico is a major market with serious concerns regarding over-indebtedness, and MFIs there are working to avert a potential crisis. Continue reading
MicroCapital: Can you tell us a bit about your talk planned for European Microfinance Week on “balancing financial inclusion with market stability”?
Narda Sotomayor: A key element to achieve this balance is the principle of proportionality, under which regulations vary based on the risks associated with the product or service in question. For instance, for microloans for businesses with overall debt below PEN 20,000 (USD 7,000), the required documentation is minimal, and loan provision requirements are based only on the number of days any loans are overdue. The lender has the freedom to establish prices to cover its costs, such that institutional sustainability is guaranteed. It was determined that anti-money-laundering rules were making it too costly to open deposit accounts for the poor, mainly because of the heavy burden of “know-your-customer” documentation. Continue reading
The International Finance Corporation (IFC), a member of the World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, has announced that it will loan a total of USD 60 million to Banco Bilbao Vizcaya Argentaria Paraguay (BBVA Paraguay), a subsidiary of the Spanish financial services group BBVA. Continue reading
The Center for Financial Inclusion (CFI), an affiliate of US-based nonprofit Accion, and HelpAge USA, an affiliate of UK-based NGO network HelpAge International, have launched a research initiative on the financial inclusion of older adults in developing countries. Continue reading
Banco Macro, a private bank in Argentina, recently announced that it has launched “Alumbra,” a lending vehicle for micro- and small enterprises. Continue reading
Accion, a US-based nonprofit organization, recently announced the acquisition of a 10-percent stake in Credinka, a microfinance institution (MFI) based in the Peruvian city of Cusco, from Diviso Grupo Financiero, a financial group that has been listed on the Lima Stock Exchange since 2007. Continue reading
“Microinsurance Distribution Channels: Insights for Insurers;” by Alice Merry, Pranav Prashad and Tobias Hoffarth; published by the Microinsurance Innovation Facility of the International Labour Organization as Paper Number 33; June 2014; 25 pages; available at http://www.microinsurancefacility.org/sites/default/files/MP33.pdf
The Microinsurance Innovation Facility of the International Labour Organization (ILO), an agency of the United Nations that addresses labour standards and related issues, recently analyzed the distribution channels available to microinsurance providers based on the experiences of 60 of its partner institutions.
The Asociación de Bancos del Perú (ASBANC), an association of 23 financial institutions in the country, has announced a partnership with Ericsson, a Sweden-based telecommunications company, with the aim of implementing a mobile money platform in Peru called Mobile Money. Continue reading
MicroCapital: Would you please tell us about the European Microfinance Platform (e-MFP) Microfinance and Environment Action Group?
Marion Allet: The e-MFP Microfinance and Environment Action Group was officially launched in February 2013. It is an initiative of various organizations that were already involved in “green microfinance,” such as MicroEnergy International, ADA, PlaNet Finance, Enclude, PAMIGA (the Participatory Microfinance Group for Africa), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) etc. A few years ago, there were very few actors addressing the issue of the environment within microfinance, so we thought there was a real need for sharing experiences. We also wanted to provide some practical tools to help stakeholders understand what green microfinance is and how to get involved. Continue reading
MicroCapital: Please tell us a bit about the Remittances Action Group of the European Microfinance Platform (e-MFP).
Gera Voorrips: As you know, e-MFP is a membership organization that promotes members working together on specific topics on which they have a shared interest. In 2011, I took the initiative to engage several members who were working on remittances to launch an Action Group to collaborate on this topic. As one of the requirements of an e-MFP Action Group is to work toward specific results, we decided that we wanted to focus on best practices for microfinance institutions (MFIs) that want to be successful in remittances. Continue reading
Event Name: Opportunity Collaboration
Event Date: October 12-17, 2014
Event Location: Playa Quiet Beach, Ixtapa, Mexico Continue reading
The Inter-American Development Bank (IDB), a US-based multilateral finance institution operating in Latin America and the Caribbean, reportedly has approved a loan of USD 100 million to promote lending to micro-, small and medium-sized enterprises (MSMEs) in El Salvador. Continue reading
Event Name: 17th Inter-American MicroEnterprise Forum (Foromic)
Event Date: November 4-6, 2014
Event Location: Guayaquil Convention Center, Guayaquil, Ecuador Continue reading
Event Name: 10th Clinton Global Initiative (CGI) Annual Meeting
Event Date: September 21-24, 2014
Event Location: New York, New York, USA Continue reading
“Female Leadership, Performance, and Governance in Microfinance Institutions;” by Reidar Øystein Strøm, Bert D’Espallier and Roy Mersland; published by Elsevier; 2014; 16 pages; available for purchase at http://www.sciencedirect.com/science/article/pii/S0378426614000284
This report examines the relationship between the performance of microfinance institutions (MFIs) and whether women occupy high management positions, including CEO, chair or director, in those MFIs. Continue reading
Absolute Portfolio Management (APM), an arm of Austria-based asset group C-Quadrat, recently informed MicroCapital that it has distributed credits in several currencies that total approximately the equivalent of USD 13.5 million to unspecified microfinance institutions (MFIs) in Armenia, China, India, Peru and Tajikistan through its Dual Return Fund-Vision Microfinance and Dual Return Fund-Vision Microfinance Local Currency. Continue reading