Category: Regulation

MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas (BSP) Places New Restrictions on Lending to Related Parties by “Microfinance-Oriented Banks” in the Philippines

Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has imposed a conflict-of-interest restriction on 18 thrift and rural banks that have added microfinance operations through affiliated nongovernmental organizations (NGOs) and foundations in an effort to limit the credit available to directors, owners, stockholders and related interests (DOSRIs). Continue reading

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MICROCAPITAL BRIEF: Government of Ghana Budgets $10m to Support Ghana Interbank Payment and Settlement System (GHIPSS) to Reach Rural Customers Through “E-Zwich” Biometric Identification System

The government of Ghana has budgeted EUR 7.5 million (USD 10.6 million) to support the Ghana Interbank Payment and Settlement System (GHIPSS) in an effort to ensure high-quality delivery of financial services and to better serve the under-banked population of Ghana. Ghana’s Finance Minister, Dr Kwabena Duffuor, has been quoted as stating “the funds would allow GHIPSS to implement a countrywide biometric system as well as undertake a rural banking project that uses the National Switch and Smart card payment system, branded as e-zwich…This technology will permit offline transaction and fingerprint recognition making it highly suitable for rural areas and for the uneducated people in our country” [1]. Goals regarding the number of people to be reached and schedule of the project have not been disclosed. Continue reading

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MICROCAPITAL BRIEF: Frankfurt School of Finance and Management, Protestant University of Congo Accepting Applications for Masters Degree in Microfinance

Frankfurt School of Finance and Management, a private German university, in partnership with Protestant University of Congo, a post-secondary college based in the Democratic Republic of the Congo, is issuing a call for applications for a Masters in Microfinance offered at the Protestant University of Congo. Continue reading

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MICROCAPITAL BRIEF: Microfinance Regulatory Authority (MRA) of Bangladesh to Maintain Interest Rate Cap of 27%, Reduce Grace Period, Number of Loan Instalments

Reportedly at the request of microfinance institutions (MFIs) in the country, Bangladesh’s Microcredit Regulatory Authority (MRA) has agreed to lower the number of instalments for microloans and reduce the grace period allowed, so that MFIs may begin collecting repayments 15 days after loan disbursement. Continue reading

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MICROCAPITAL BRIEF: SKS Microfinance Reconsidering Business Strategy to Rebuild Reputation

SKS Microfinance, a microfinance institution (MFI) that serves groups of impoverished women in India, is reportedly considering new business growth avenues in an attempt to increase revenue and improve its reputation. Along with collateral-free loans, four new products would be offered: loans using gold as collateral, housing loans, loans to buy mobile phones and loans to local grocery stores in a supply arrangement with the cash-and-carry chain, Metro. “The pilot projects have been yielding very encouraging results,” says Vikram Akula, chairperson and founder of SKS Microfinance. Continue reading

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MICROCAPITAL BRIEF: Central Bank of Nigeria’s (CBN’s) Cash Withdrawal Limit Expected to Impact Microfinance Institutions (MFIs)

The Central Bank of Nigeria (CBN) recently issued limits on daily cash withdrawals by individuals and corporate customers of NGN 150,000 (USD 962) and NGN 1 million (USD 6,417), respectively, effective June 1, 2012. Continue reading

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MICROCAPITAL BRIEF: Ministry of Planning and International Cooperation (MoPIC) Announces New Policy Framework for Expansion of Microfinance Industry in Jordan

The Ministry of Planning and International Cooperation (MoPIC) in Jordan, with assistance from KfW, a German government-owned development bank, recently developed a new policy framework for the microfinance industry.  Continue reading

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MICROCAPITAL BRIEF: Reporting Tepid Growth, State Bank of Pakistan (SBP) Permits Microfinance Institutions (MFIs) to Accept Gold as Collateral

The State Bank of Pakistan (SBP) is reported to be permitting microfinance institutions (MFIs) to accept gold as collateral to secure microfinance loans. International: The News, a Pakistan-based news source, speculates that SBP has changed its stance on the issue in an effort to boost the issuance of loans following the floods that greatly affected Pakistan in 2010. In a circular reportedly issued to all MFIs in the country, SBP stated, “the negative growth [in 2010] was mainly due to the devastating floods during the third quarter of 2010 that gripped most parts of the country…Moreover, an overall difficult macroeconomic environment continues to challenge the credit growth of microfinance players” [1]. Continue reading

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MICROFINANCE PAPER WRAP-UP: Rural and Microfinance in the Lower Mekong Region: Policies, Institutions, and Market Outcomes: by Binh T Nguyen, Robert Vogel; Published by Asian Development Bank (ADB)

By Binh T Nguyen and Robert Vogel, published by Asian Development Bank (ADB), 2011, 126 pages, available at: http://www.microfinancegateway.org/p/site/m/template.rc/1.9.51104/ Continue reading

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MICROCAPITAL BRIEF: New Draft Bill From Ministry of Finance Would Expand Role of Reserve Bank of India (RBI) to Regulate Entire Indian Microfinance Sector, Cutting Roles of NABARD, State Governments

The Indian Ministry of Finance is in the final stages of drafting a new microfinance bill that would transfer all regulatory power over microfinance to the Reserve Bank of India (RBI), the country’s central bank, in an effort to create a uniform framework for all microfinance institutions (MFIs), according to Indian news website Moneycontrol.com. Continue reading

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MICROCAPITAL BRIEF: Reserve Bank of India (RBI) to Allow Urban Cooperative Banks to Lend to Self-Help Groups (SHGs), Joint Liability Groups (JLGs) in Effort to Increase Microfinance Activities

The Reserve Bank of India (RBI), the country’s central banking authority, has recently begun permitting urban cooperative banks (UCBs), commonly known as credit unions, to lend directly to self-help groups (SHGs) and joint-liability groups (JLGs) in an effort to facilitate financial inclusion by increasing the availability of microfinance in India. Continue reading

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MICROCAPITAL BRIEF: G20 SME (Small and Medium-Sized Enterprise) Finance Online Consultations Being Held Through June 17, 2011

The G20 SME (Small and Medium-Sized Enterprise) Finance Online Consultations are now ongoing through June 17 to help shape the policy recommendations of the SME Finance Sub-Group, which was launched as part of the G20 Global Partnership for Financial Inclusion to improve access to financial services for the poor. The Group of Twenty (G20) was established in 1999 to bring together finance ministers and central bank governors of “systematically important” industrialized and developing economies to discuss key issues in the global economy. Continue reading

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MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Mandates Personal Guarantees from Promoters of Microfinance Institutions (MFI) Looking to Restructure Debt

The Corporate Debt Restructuring (CDR) cell of the Reserve Bank of India (RBI), after a unanimous decision, declared that promoters of microlenders will be required to provide personal guarantees in order for their institutions to refinance their debt in the wake of the microfinance turmoil in the Indian state of Andhra Pradesh that began in 2010. Continue reading

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MICROCAPITAL BRIEF: Equifax India to Launch Microfinance Credit Bureau In Partnership with Bank of Baroda, Bank of India, Kotak Mahindra Prime, ReligareFinvest, Sundaram Finance, Union Bank of India

The Indian unit of Equifax Credit Information Services, a US-based consumer credit reporting agency, has partnered with the following six Indian banks to launch a credit bureau devoted to transactions in the microfinance sector: Bank of Baroda, Bank of India, Kotak Mahindra Prime, ReligareFinvest, Sundaram Finance and Union Bank of India. Continue reading

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MICROCAPITAL BRIEF: Bank of Thailand Introduces Guidelines to Promote Microfinance, But Interest Rate Ceiling Reportedly Discourages Commercial Banks

The Bank of Thailand (BOT), the country’s central bank, has recently allowed commercial banks to engage in microfinance, whereby there is no collateral requirement, a credit limit of THB 200,000 (USD 6,000) and an annual interest rate cap of 28 percent [1]. Continue reading

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MICROCAPITAL BRIEF: Myanmar’s (Burma’s) Banned Opposition Party, National League for Democracy (NLD) to Launch Microfinance Program

The National League for Democracy (NLD), a banned political opposition party in Myanmar (formerly known as Burma), is reported to be planning the launch of a microcredit program to provide small, interest-free-loans in South Okkalapa Township of Burma’s capital city, Rangoon. Continue reading

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MICROCAPITAL BRIEF: African Microfinance Transparency Forum (AMT) Calls for Applications to Host Organization as it Relocates from Luxembourg

African Microfinance Transparency Forum (AMT), a Luxembourg-based nonprofit that seeks to promote transparency and efficiency among African microfinance institutions (MFIs), is set to relocate its operations to the African continent in 2011. AMT is inviting organizations based in Africa to apply to host and manage the AMT Secretariat. Continue reading

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