While the Brazilian microfinance market has seen significant growth since President Inacio Lula da Silva took power in 2002, a recent article estimates the market has reached two percent penetration . Since his election, the number of microborrowers in Brazil has increased from 159,000 to 809,000 with a total of BRL 775.5 million (USD 426 million) in outstanding loans. Growth is expected to continue with increased interest in this market from established banking institutions such as Banco Santander, Unibanco and Banco Real. Continue reading
MicroCapital: What is your personal motivation for investing in microfinance?
Rick Beckett: I spent the first 20 years of my career in the private sector. My motivation is really rooted in a couple things: one is I want to live in a world where everybody is treated like they matter, and for me that’s a lot about people having the opportunity to earn a living and provide for their families. We don’t live in that kind of a world. I do the work I do at Global Partnerships and Direct Relief and elsewhere because I’m interested in how we can use market solutions to advance the common good. I’m intrigued by the opportunity to change investment markets to incorporate more social motivations. I’m intrigued by the evolution of enterprises and products to incorporate more of the common good, both in terms of global poverty and global health issues as well as environmental issues. So it’s a combination of wanting to see a different world and intrigue in how the market mechanisms are evolving to advance that. So it’s a pretty interesting place to be in right now.
MC: You have said previously that “All microfinance is not created equal.” How you make such distinctions?
Lockheed Martin, a global security company based in the US state of Maryland, has given a USD 30,000 grant to support the microfinance efforts of the Foundation for International Community Assistance (FINCA) . Established in 1984, FINCA is a global microfinance network, which serves approximately 700,000 people through its subsidiaries in 21 countries . The funding from Lockheed Martin will help provide loan capital for FINCA’s clients in Afghanistan and El Salvador and will support FINCA Haiti’s relief fund efforts following the January 12th earthquake. Continue reading
The responsAbility Mikrofinanz-Fonds, a microfinance investment vehicle (MIV) founded in 2007, recently reported to MicroCapital that it has executed debt investments totaling USD 3.2 million in four microfinance banks. The largest amount, USD 1.5 million, went to Inecobank, an Armenian bank founded in 1996 with a gross loan portfolio of USD 91.7 million . The MIV reports total assets of USD 108.5 million as of 2009, and is one of four funds operated by responsAbility, the others being responsAbility Base of the Pyramid, responsAbility Global Microfinance Fund and responsAbility Microfinance Leaders Fund. Continue reading
The responsAbility Global Microfinance Fund, headquartered in Switzerland and founded in 2003, has executed debt investments totaling the equivalent of USD 2.76 million to three microfinance banks, according to a report submitted by responsAbility to MicroCapital. The microfinance investment vehicle (MIV) reports total assets of USD 358 million as of 2009 and is one of four funds operated by responsAbility, the others being responsAbility Base of the Pyramid, responsAbility Mikrofinanz-Fonds and responsAbility Microfinance Leaders Fund. Continue reading
IGNIA Fund I, a social venture capital fund that aims to support the low-income population in Mexico and other regions of Latin America, recently invested USD 4 million in Finestrella, a Mexican company that offers postpaid mobile plans to consumers without the necessity of a credit history or upfront deposit. Continue reading
In a recent interview on the Microfinance Focus website, Dr John Hatch, founder of FINCA International, a global microfinance network serving 700,000 people, discusses the successes of microfinance and FINCA’s experiences in disaster and conflict zones. 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 . 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 . Continue reading
The nonprofit Microfinance Information Exchange (MIX) recently released the 2009 benchmarking report on the microfinance sector in Brazil, available in Spanish. Continue reading
Pro Mujer, an international microfinance organization serving 202,000 clients in Latin America, recently released the first issue of a publication that will evaluate field research on new microfinance services. Continue reading
Citigroup, a major American financial services company based in New York City, has pledged USD 1 million in grants to help rebuild Haiti’s microfinance industry . The money will be distributed via three microfinance providers: SOGESOL, Fonkoze and FINCA-Haiti. The grants are to be used by microentrepreneurs whose businesses were damaged by the earthquake in mid-January. This adds to the large grants already given to microfinance institutions in Haiti. Fonkoze has already received a USD 4.5 million grant from the MasterCard Foundation, based in Canada . Continue reading
Vision Microfinance Fund, a Luxembourg-based fund that focuses on microfinance institutions (MFIs) in emerging countries in Latin America, Eastern Europe and Asia, recently invested USD 2 million in EcoFuturo, a Bolivian microfinance institution (MFI) with 43,486 active borrowers and total assets of USD 118 million as of 2009. Continue reading
MicroSave, a technical assistance, training and technical resource center for microfinance organizations, has released a podcast discussing issues surrounding the controversially lucrative 2007, USD 458 million initial public offering of the Mexican microfinance bank, Compartamos. Continue reading
Mark Coffey has been named the chief investment officer of Global Partnerships (GP), a Seattle-based non-profit that supports microfinance institutions (MFIs) in Latin America. Continue reading
Event Name: Latin American Forum: Carrying out Social Management in Microfinance: “Turning Mission into Practice”
Event Date: April 28 to April 29, 2010
Event Location: Hotel Holiday Inn Managua, Nicaragua
In an effort to acknowledge the achievements of organizations supporting microenterprise development in Latin America and the Caribbean, the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) recently launched the Inter-American Awards for Microenterprise Development 2010. Continue reading
The MasterCard Foundation, a private Canadian foundation that supports microfinance, recently announced it would provide a USD 4.5 million grant to Fonkoze, a Haitian microfinance institution (MFI) serving 200,000 borrowers and savers. Continue reading
The International Finance Corporation (IFC), the investment arm of the World Bank, will provide a USD 30 million loan to Banco Patagonia S.A., a commercial bank in Argentina, to lend to farmers and small and medium-sized agribusinesses. Continue reading