Category: Regulation

MICROCAPITAL BRIEF: Former CEO of Jammu and Kashmir Bank Calls Efforts to Regulate Indian Microfinance Institutions (MFIs) “Flawed”, Argues NABARD Has Conflicts of Interest

Haseeb Drabu, former CEO of Jammu and Kashmir Bank, a bank owned by the Indian state governments of Jammu and Kashmir, recently wrote an article published on the LiveMint website calling recent efforts by authorities to rein in the Indian microfinance industry “flawed”. Continue reading

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MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor), United Nations Principles for Responsible Investment Initiative Set Standards for Microfinance Investment Vehicle Environmental, Social and Governance (ESG) Performance

CGAP (Consultative Group to Assist the Poor), a policy and research center dedicated to providing financial access for the world’s poor, and the United Nations Principles for Responsible Investment (UNPRI), a network of international investors created to promote the practice of responsible investing, have partnered to create the following criteria for measuring the environmental, social and governance (ESG) performance of microfinance investment vehicles (MIVs) Continue reading

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MICROCAPITAL BRIEF: Experts Warn that New Legislation in Andhra Pradesh Might Reduce Profitability of Indian Microfinance Institutions (MFIs)

On the website of the LiveMint newspaper, a number of experts in India recently cautioned that legislations currently proposed in Andhra Pradesh, India, might cause a sharp drop in profitability of microfinance institutions (MFIs). Continue reading

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MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor), LuxFLAG, United Nations Principles for Responsible Investment (UNPRI), Eurosif Partner to Award Three Microfinance Investment Vehicle (MIV) Environmental, Social and Governance (ESG) Awards

CGAP (Consultative Group to Assist the Poor), an independent policy and research center dedicated to providing financial access for the world’s poor, has teamed up with the United Nation’s Principles for Responsible Investment (UNPRI), a network of international investors created under the auspices of the UN to promote the practice of responsible investing; LuxFLAG, an organization that certifies that microfinance vehicles (MIVs) actually invest in the microfinance sector; and the European Social Investment Forum (Eurosif), a pan-European network aiming to foster sustainable development through European financial markets, to create the CGAP Microfinance Investment Vehicle (MIV) Environmental, Social and Governance (ESG) Awards. Continue reading

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MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Gives Provisional Approval for 121 New Microfinance Bank (MFB) Licenses

After announcing that Nigerian microfinance banks (MFBs) would have to fulfill stricter capital requirements in order to obtain licenses, the Central Bank of Nigeria (CBN) has begun to grant provisional approval for new licenses to approximately 121 out of the 224 MFBs whose licenses were revoked earlier this year. Continue reading

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MICROCAPITAL BRIEF: MFTransparency Launches Transparent Microfinance Pricing Initiative in Rwanda and Uganda

MFTransparency, a US-based nongovernmental organization launched in July 2008 that aims to provide information on credit products and pricing, the Association of Micro Finance Institutions in Rwanda and the Association of Microfinance Institutions of Uganda, are partnering to expand MFTransparency’s Transparent Pricing Initiative to those two countries with the aim of providing training on interest rate calculations, publishing online pricing information and promoting consumer protection. Continue reading

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MICROCAPITAL BRIEF: Indian Microfinance Institutions (MFIs) in Andhra Pradesh Offer Debt Restructuring

Microfinance institutions (MFIs) in Andhra Pradesh, India, are offering many of their estimated 6.7 million borrowers the option of restructuring their outstanding loans in an effort to defuse recent popular and political hostility towards microfinance in the area. Continue reading

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MICROCAPITAL BRIEF: Indian Government Ponders Role of NABARD in New Microfinance Regulatory Framework

The Indian government is considering giving the National Bank for Agriculture and Rural Development (NABARD), a development bank that formulates the credit and banking policy for the rural sector, more supervisory powers over microfinance institutions (MFIs) in India. Continue reading

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MICROCAPITAL BRIEF: Indian Government Finalizes Debt-Swap Scheme, Ordinance to Counter Coercive Practices of Microfinance Institutions (MFIs)

The Cabinet of the Indian government has hammered out a debt-swap scheme to relieve self-help groups troubled by high interest rates charged on microloans and has approved a draft of an ordinance intended to end coercive collections practices by microfinance institutions (MFIs) in India. Continue reading

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MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas (BSP) Approves Establishment of Microfinance Institutions in Underserved Areas of the Philippines

Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, announced that microfinance institutions (MFIs) can now start operations in cities and rural areas that had no programs aiming at low-income groups. Continue reading

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MICROCAPITAL BRIEF: Microfinance Banks (MFBs) Whose Licenses Were Recently Revoked by the Central Bank of Nigeria (CBN) May Reapply Under Stiffer Requirements

The 224 microfinance banks (MFBs) whose licenses were recently revoked by the Central Bank of Nigeria (CBN), Nigeria’s central banking authority, must satisfy a new requirement of a minimum capital base of NGN 100 million (approximately USD 650,000) and NGN 2 billion (USD 13.1 million) respectively for unit and state MFBs if they wish to obtain new licenses to resume lending. Continue reading

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MICROCAPITAL BRIEF: Series of Suicides Related to Microloan Repayment Rock India, Raises Questions of Whether Interest Rates Charged by Microfinance Institutions (MFIs) are Too High

A series of microfinance-related suicides in India have recently been reported, raising questions about whether the interest rates charged by microfinance institutions (MFIs) are usurious. Continue reading

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MICROCAPITAL BRIEF: Andhra Pradesh Government Plans Legislation to Restrict Collection Practices of Microfinance Institutions (MFIs) After Rise in Suicides Among Borrowers

A rise in suicides among microfinance clients in the Indian state of Andhra Pradesh has the local government considering legislation to restrict the loan collection practices of microfinance institutions (MFIs) in the area. Continue reading

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MICROCAPITAL BRIEF: Reserve Bank of India (RBI), in Move to Expand Rural Financial Access, Updates Guidelines to Allow Individuals, Nonprofits and Corporations—But Not Microfinance Institutions—to Serve as Business Correspondents for Banks

The Reserve Bank of India (RBI), India’s central banking authority, recently announced that it has updated guidelines so that “individuals, non-governmental organizations, cooperative societies, post offices and companies with ‘large and widespread retail outlets’” may serve as business correspondents (BCs). Continue reading

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MICROCAPITAL BRIEF: The Economist Intelligence Unit “Microscope” Study Discusses Challenges to The Rapidly Growing Microfinance Industry

A study from The Economist Intelligence Unit, publisher of The Economist magazine reports that microfinance is increasingly gaining global recognition as a viable business model, whereby technology in particular is allowing for growth in lending and other financial services for the world’s low-income microentrepreneurs. Continue reading

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