Regulators in Cambodia are planning the creation of the nation’s first credit bureau to link the country into a national financial database, it was reported in the Phnom Penh Post. The credit bureau would act as a registry for the details of all loans which would be submitted by microfinance institutions (MFIs) in Cambodia. While the report did not specify which authorities will launch the credit bureau, The International Finance Corp, a member of the World Bank Group, and the National Bank of Cambodia, Cambodia’s Central Bank, made statements regarding the need for the bureau and the desired date for the launch, which is in April 2010, while Angkor Microfinance Kampuchea (AMK) and ACLEDA Bank also spoke about the benefits of regulation in the microfinance sector. The motivation for the creation of a credit bureau has been brought on by the global credit crisis as its effects expand to Cambodia, combined with the rapidly growing banking sector. Continue Reading »

Comat, a technology company providing services to rural India, recently raised INR 60 crore (USD 12.5m) from the Omidyar Network and the Unitus Equity Fund (UEF). According to a Business Standard article, the new investment will allow “Comat to expand to new States, accelerate service delivery for training and financial services [and] strengthen management bandwidth.” Continue Reading »

Ernst & Young LLP (E&Y), a “Big Four” accounting firm headquartered in London, has donated up to USD 1 million of in-kind resources over the next three years to provide oversight and accountability to the micro-lending process of Kiva Microfunds LLC, a micro-lending website that connects individual lenders with target entrepreneurs via microfinance institutions (MFIs).  The partnership was announced at the 2008 Clinton Global Initiative (CGI) summit, an annual gathering of global leaders in government, business and civil society for the purpose of discussing pressing development challenges and their solutions. Continue Reading »

Indian Government representatives and members of industry weighed in on the role of microinsurance from a recent Confederation of Indian Industry (CII) conference. During his speech, Tarun Bajaj, joint secretary of the department of financial services and the ministry of finance, expressed his view that insurance companies should place more emphasis on microinsurance: “Microfinance will not be complete without microinsurance as one event is enough to push back an aspiring farmer into his original state.” He urged insurance companies to work with microfinance institutions (MFIs) to provide insurance to the poor. Continue Reading »

The Reserve Bank of India (RBI), the country’s central bank, is contemplating requiring that financial institutions direct at least ten percent of their total loans to medium small and micro enterprises (MSMEs). These new restrictions would come on top of the current requirements that banks devote at least 40 percent of lending to the priority sector, which includes poor and agricultural areas and industries. These current laws do not require that loans be made to enterprises of a certain size. Continue Reading »

Recent increases in the cost of borrowing for many organizations around the world and new capital adequacy requirements are putting pressure on Indian Microfinance Institutions. According to The Times of India, both Equitas Micro Finance India (Equitas) and Madura Micro Finance ltd (Madura) are raising interest rates due to increases in the cost of borrowing. Also, SKS Microfinance (SKS) has begun looking for new sources of private equity funding, citing both the reserve requirements and increased interest rates. Continue Reading »

The Governor of the Bangladesh Bank, the country’s central bank, recently made stated that only 13 percent of the country utilizes banking services, comprising a total of 19 million bank accounts. The New Nation, a Bangladeshi newspaper, in an article covering the new figures, argued that a lack of savings and a focus by banks on rich clients were the main causes of the problem. Continue Reading »

A survey conducted the German Technical Corporation (GTZ), a government aid agency, shows that 60 percent of Sri Lankan households have utilized microfinance services and 82.5 percent of households have accessed some sort of financial services (pg 7). Despite the already high adoption of microfinance services and apparent preference for state-run Samurdhi banks, the report suggests that further improvements could be made by instituting market-based reforms (pg 8). The report also suggests that poverty alleviation remains “modest” despite the high penetration of financial services (pg 8). Continue Reading »

Controversy has arisen over the governance and operations of microfinance institutions (MFIs) in Nigeria. A recent Daily Sun article reported that Pastor Kehinde Alaba, Managing Director and Chief Executive Officer of Lagos State University Micro Finance Bank (LMFB), believes that government restrictions hinder the ability of MFIs to provide quality financial services to the poor. Meanwhile, members of the Central Bank of Nigeria (CBN) recently made comments suggesting that MFI mangers were acting inappropriately and it may be necessary to revoke the licenses of egregious offenders. Continue Reading »

The Government of Tanzania will sell a 21 percent stake in National Microfinance Bank (NMB), valued at USD 55m, starting August 18th. The Tanzanian Government will bar members of other countries, including Kenya and Uganda, from participating in the initial public offering (IPO), apparently violating the East African Customs Management Act. Continue Reading »

Source: Finextra. Continue Reading »

Written by Kate Lauer, lawyer and a policy advisory consultant to Consultative Group to Assist the Poor (CGAP), published in June 2008 as Number 13 of Occasional Papers, a publication of CGAP, 28 pages, available at http://www.cgap.org/gm/document-1.9.4213/OccasionalPaper_13.pdf Continue Reading »

Nepal’s government recently unveiled a new national microfinance policy that aims to expand the lending capacity of its microfinance sector by addressing problems that have arisen from the relatively unregulated industry. Continue Reading »

Authored by Scott B. Gaul, the Microfinance Information eXchange’s (MIX) Product Development Manager and Lead Analyst for Eastern Europe and Central Asia (ECA), and Olga Tomilova, the Consultative Group to Assist the Poor’s (CGAP) Consultant for ECA, a joint publication of the Central Asian Microfinance Center (CAC), CGAP, the Microfinance Centre for Central & Eastern Europe and the New Independent States (MFC), and the MIX, released February 2008, 20 pages, available at http://www.mixmbb.org/Publications/002-REG/EASTERN%20EUROPE%20AND%20CENTRAL%20ASIA%20(ECA)/02-Central%20Asia%20Benchmarking%20Reports/Central%20Asia%20Benchmark%20Report%20-%20English%20-%20Final.pdf Continue Reading »

Following a meeting with fellow cabinet members, Cameroon’s Minister of Finance Lazare Menye announced that Cameroon’s microfinance sector must be strengthened, citing key challenges to the sector’s growth and offering potential solutions to these challenges. Menye noted that the microfinance sector must be preserved because microcredit is an effective instrument that suits the socio-cultural context of Cameroon, and fosters the integration of people marginalized by traditional banks into the formal financial sector. Continue Reading »

Prepared by the Russian Microfinance Center (RMC), an organization supporting microfinance institutions (MFIs) by providing knowledge management, policy advocacy, and technical services since July 2002, in cooperation with the Microfinance Information eXchange (MIX), released February 2008, 20 pages, available at http://www.microfinancegateway.org/files/48948_file_Microfi_nance_in_Russia___Benchmarks_and_Analysis_2006.pdf

Continue Reading »

Produced for review by the United States Agency for International Development (USAID), released July 2007, written by Marc de Sousa-Shields of Enterprising Solutions and Caroline Esther Averch of Chemonics International, 26 pages, available at: http://www.microfinancegateway.org/content/article/detail/49344

Once it became evident that microfinance could be a financially sustainable enterprise, many microfinance institutions (MFIs) operating as non-governmental organizations (NGOs) sought to change their legal status to a commercial MFI. As private entities, these MFIs would not only be able to turn a profit, they would also gain access to private investors offering the debt-capital necessary to expand operations.

“Transitions To Private Capital” reviews the funding strategies employed by three Latin American MFIs following their establishment as for-profit MFIs. Below is a summary of each case, highlighting the key changes in funding, and an accompanying rationale behind each funding decision. Continue Reading »

Source: United Nations – IRIN (Integrated Regional Information Networks). Continue Reading »