Category: Latin America

MICROFINANCE PAPER WRAP-UP: Peru, Colombia, the Philippines Top 2014 Global Microscope on Microfinance Business Environment

According to the Global Microscope on the Microfinance Business Environment 2014, a recent report by the UK-based Economist Intelligence Unit (EIU), Peru is the top country in enabling microfinance for the seventh consecutive year. Continue reading

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MICROCAPITAL BRIEF: Credit Suisse to Fund Opportunity International’s “Empowering Generational Change Through Education” in Africa, Asia, Latin America

Credit Suisse, a Swiss global financial services company with operations in 50 countries, has agreed to donate an undisclosed sum to Opportunity International, a US-based nonprofit providing microfinance in 22 countries, to launch a three-year program entitled “Empowering Generational Change Through Education” that focuses on lending for education initiatives. Continue reading

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MICROCAPITAL BRIEF: International Financial Organization (IFC) to Provide $18m to Peru-based La Positiva Seguros Generales through Convertible Subordinated Loan to Expand Insurance to Poor People

The International Finance Corporation (IFC), a member of the US-based World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, recently announced that it will provide USD 18 million to La Positva Seguros Generales, a Peru-based insurance company, through a convertible subordinated loan to expand the availability of insurance to disadvantaged populations within Peru. Continue reading

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MICROCAPITAL BRIEF: Absolute Portfolio Management’s Vision Microfinance Funds Invest $11m in Microfinance Institutions in Cambodia, Costa Rica, Ecuador, Kyrgyzstan, Mexico, India

Absolute Portfolio Management (APM), an arm of Austria-based asset management group C-Quadrat, recently informed MicroCapital that it disbursed credits totaling approximately USD 11 million from its two Vision Microfinance funds, the Dual Return Fund-Vision Microfinance and the Dual Return Fund-Vision Microfinance Local Currency, to unspecified microfinance institutions (MFIs) in Cambodia, Costa Rica, Ecuador, Kyrgyzstan, Mexico and India. Continue reading

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SPECIAL REPORT: Distinguishing Multiple Lending from Over-indebtedness at European Microfinance Week

“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

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MICROCAPITAL BRIEF: Absolute Portfolio Management’s Vision Microfinance Funds Loan $1.5m to Microfinance Institution in Ecuador

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 [1]. Continue reading

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SPECIAL REPORT: Over-indebtedness, Microfinance and Environment Award, Conflict Zones at e-MFP’s European Microfinance Week

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

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SPECIAL REPORT: Narda Sotomayor on Regulating Microfinance via Proportionality, Financial Education and Mobile Money in Peru

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

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MICROCAPITAL BRIEF: International Financial Organization (IFC) Syndicates Loans Totaling $60m to BBVA Paraguay to Fund Small, Medium-sized Enterprises

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

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MICROCAPITAL BRIEF: Center for Financial Inclusion (CFI), HelpAge USA Launch Research Initiative on Financial Inclusion of Older Adults in Colombia

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

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MICROCAPITAL BRIEF: Accion Acquires 10% Stake in Peruvian Microfinance Institution (MFI) Credinka from Diviso Grupo Financiero

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

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MICROFINANCE PUBLICATION ROUND-UP: Microinsurance Distribution Channels, Friendship Bridge, MicroVest Impact Reports

“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.

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MICROCAPITAL BRIEF: Asociación de Bancos del Perú (ASBANC) Partners with Ericsson to Implement Mobile Money System

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

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SPECIAL REPORT: Marion Allet: e-MFP Microfinance and Environment Action Group Offers Tools for Microfinance Institutions Looking to Go Green

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

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SPECIAL REPORT: European Microfinance Platform (e-MFP) Action Group Proposes Best Practices for Microfinance Institutions Offering Remittances

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

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