The Central Bank of Nigeria (CBN) has exempted microfinance banks from participating in the Cash-Lite banking system in recognition of the challenges of training and persuading microfinance customers to use electronic and cashless banking services, such as automated teller machines (ATMs) and checks.
Category: Regulation
MICROCAPITAL BRIEF: Credit Bureau Cambodia Launched to Facilitate Information Sharing Among Banks, Microfinance Institutions
The Association of Banks in Cambodia (ABC) and the Cambodian Microfinance Association (CMA), two trade associations with a combined membership of 64 financial institutions, have formed a joint venture with New Zealand-based credit bureau developer Veda Advantage to launch the Credit Bureau (Cambodia) Company Limited (CBC), which will maintain a database of credit information intended to help banks and microfinance institutions (MFIs) in making “accurate loan decisions based on borrower’s positive and negative credit history” [1].
MICROCAPITAL BRIEF: Microfinance CEO Working Group Issues Road Map for Microfinance Industry Promoting Smart Campaign, Microfinance Transparency, Social Performance Task Force
A group of eight CEOs of nonprofit microfinance organizations has issued a “Road Map for the Microfinance Industry: Focusing on Responsible and Client-Centered Microfinance.”
MICROCAPITAL BRIEF: Central Bank of Uzbekistan Raises Minimum Capital Requirements for Microcredit Organizations
The Central Bank of Uzbekistan, the country’s central banking authority, has increased the minimum amount of charter capital required of microcredit organizations (MCOs) to the local currency equivalent of USD 129,000 [1].
MICROCAPITAL BRIEF: Cambodian Government: Microfinance Interest Rates of Up to 50 Percent Threaten Loss of Land, “Social Instability”
Cambodian government officials reportedly are looking to negotiate down the interest rates on microfinance loans, arguing that current rates are unsustainable for the country’s rural farming population and that defaults are causing many farmers to become landless. [1]
MICROCAPITAL BRIEF: To Promote Electronic Payments, Central Bank of Nigeria Taxing Cash Transactions
The Central Bank of Nigeria has begun taxing cash withdrawals and deposits that exceed NGN 150,000 (USD 931) per day for individuals and NGN 1,000,000 (USD 6,205) per day for corporations [1].
MICROCAPITAL BRIEF: Preferring Sector-Wide Solution, Reserve Bank of India Refuses to Classify Restructured Loans as Performing Assets for Microfinance Institutions BASIX, Sharada’s Women’s Association for Weaker Section (SWAWS)
The Reserve Bank of India (RBI), India’s central banking authority, has refused to give a special exemption to commercial banks, that include HDFC Bank, Corporation Bank and Axis Bank, to restructure loans outstanding to microfinance providers BASIX Group and Sharada’s Women’s Association for Weaker Section (SWAWS) Credit Corporation India Private Limited under a classification other than as non-performing assets [1] [2].
MICROFINANCE PAPER WRAP-UP: “Bank Agents: Risk Management, Mitigation, and Supervision;” by Kate Lauer, Denise Dias, Michael Tarazi; Published by CGAP (Consultative Group to Assist the Poor)
By Kate Lauer, Denise Dias and Michael Tarazi; published by CGAP (Consultative Group to Assist the Poor); December 2011; 24 pages; available at: http://www.cgap.org/p/site/c/template.rc/1.9.55781/
MICROCAPITAL BRIEF: Indian Microfinance Institutions Allowed to Raise $10m Each in External Commercial Borrowings
Reserve Bank of India (RBI) Deputy Governor Mr H R Khan has announced that Indian microfinance institutions (MFIs) will now be allowed to execute external commercial borrowings (ECB)–those that are raised from outside India–of up to USD 10 million per financial year, twice as much as was previously allowed [1]. Such funds must be “utilised for lending to self-help groups or for micro-credit or for bonafide micro finance activity including capacity building.” [2] The change is intended to address liquidity issues in the industry [1].
MICROCAPITAL BRIEF: Central Bank of Kenya to Allow Deposit-Taking Microfinance Institutions (DTMs) to Use Agents to Provide Financial Services
The Central Bank of Kenya (CBK), Kenya’s central banking authority, has reportedly issued guidelines allowing deposit-taking microfinance institutions (DTMs) to use agents to provide financial services in an effort to promote financial inclusion of the “unbanked and under-banked population” [1].
MICROCAPITAL BRIEF: Nigeria’s National Association of Microfinance Banks (NAMB) Asks Government Not to Set Up Microlenders
The Lagos State Chapter of the National Association of Microfinance Banks (NAMB), a trade group of microfinance banks (MFBs) in Nigeria, has reportedly asked the federal government not to set up MFBs [1].
MICROCAPITAL BRIEF: State Bank of Pakistan Releases Five-Year “Microfinance Strategic Framework,” Launches Financial Literacy Programme
The State Bank of Pakistan (SBP), Pakistan’s central bank, recently announced that it has developed a detailed strategy to promote the sustainable growth of microfinance as outlined in its “Microfinance Strategic Framework 2011-2015” that is intended to “foster a pro-poor and sustainable development of the country” [1].
MICROFINANCE PUBLICATION ROUND-UP: Directory of Microfinance Investors in Africa; Impact Investors in Asia; Book on Microfinance Due Diligence
“AMT Directory of Microfinance Investors,” published by the African Microfinance Transparency Forum (AMT), November 2011, available for a fee through info@amt-forum.org, preview available at: http://www.amt-forum.org/fileadmin/media_amt/publications/AMT_Directory_…
Luxembourg-based nonprofit African Microfinance Transparency Forum (AMT) recently published the third edition of its directory of microfinance investors, which is updated every two years to facilitate relationships between African microfinance institutions (MFIs) and investors active in Africa.
MICROCAPITAL BRIEF: Vietnam Sets 10-Year Microfinance Strategy, French Development Agency Donates $1.3m
The Prime Minister of Vietnam recently approved a National Microfinance Strategy, which aims to develop a safe and sustainable microfinance system to ensure social welfare and sustainable poverty eradication in the country
MICROCAPITAL BRIEF: Stymied by Local Regulation, Microfinance Institutions (MFIs) based in India’s Andhra Pradesh Expand Into Northern States
Following the enactment of the Regulation of Microlending Act in October 2010 by government of the Indian state of Andhra Pradesh (AP), which requires government approval of each microloan, microfinance institutions (MFIs) based in AP have began expanding into northern India.
MICROCAPITAL BRIEF: Nepal to Introduce Microinsurance Fund, Deems Work of NGOs Offering Microinsurance “Illegal” Unless Working with Licensed Insurance Companies
The Nepalese government is instituting a microinsurance fund that will “reinsure” products sold by insurers to “divert risk created by settlement of insurance claims” [1].
MICROCAPITAL BRIEF: Securities and Exchange Commission of Pakistan (SECP) to Launch Microinsurance Regulatory Framework by June 2012
The Securities and Exchange Commission of Pakistan (SECP), an autonomous body whose purpose is to develop the corporate sector in the country, will reportedly launch a microinsurance regulatory framework by June 2012.
MICROCAPITAL BRIEF: Government of Andhra Pradesh, India, Introduces Interest-Free Loans for Women in Self-Help Groups (SHGs)
On January 1, the government of the Indian state of Andhra Pradesh will introduce Vaddi Leni Runnam, a scheme that will provide women in self-help groups (SHGs) interest-free loans of up to INR 500,000 (USD 9,500) [1,2].