MICROCAPITAL BRIEF: Colombian Government Creating Licensing System for Electronic Deposit-Taking Entities

The government of Colombia recently approved a law to regulate and license electronic deposit-taking entities. These financial institutions, designated Sociedades Especializadas en Depósitos y Pagos Electrónicos (Specialized Electronic Deposit and Payment Institutions), may be incorporated by individuals or legal entities, such as telecom operators or postal offices. With a minimum capital requirement of USD 3 million, these entities can allow users to save, make payments and receive money, primarily through correspondent agents [1] [2].

MICROCAPITAL BRIEF: Social Performance Task Force, Smart Campaign Launch Responsible Microfinance Facility (RMF) for Training, Technical Assistance in the Middle East, Africa

The Social Performance Task Force, a US-based nonprofit charged with addressing questions about measuring and managing social performance, in collaboration with the Smart Campaign, a client-protection initiative of US-based nonprofit Accion, recently launched the Responsible Microfinance Facility (RMF), a three-year initiative funded by the French government’s Agence Francaise de Developpement (AFD)  to improve the capacity and performance of microfinance institutions in Africa and the Middle East.

MICROCAPITAL BRIEF: Fonds pour l’inclusion Financière en République Démocratique du Congo (FPM) Receives Authorization from Central Bank of the Congo to Issue Wholesale Financing to Lenders Serving Micro-, Small, Medium-Sized Enterprises (MSMEs)

Fonds pour l’inclusion Financière en République Démocratique du Congo (FPM) SA, a nonprofit organization based in the Democratic Republic of the Congo (DRC) that was formerly known as Fonds de Promotion de la Microfinance, recently received authorization to operate as a financial company from the Central Bank of the Congo, DRC’s central banking authority.

MICROCAPITAL BRIEF: Decree in Belarus Requires Microfinance Organizations to Register with National Bank Within 6 Months

The National Bank of the Republic of Belarus (NBRB), the central banking authority of the country, has announced that organizations providing microfinance services in the country have six months to register with the bank to comply with the guidelines set forth in “Decree No. 325,” a presidential order “on the raising and provision of loans, the operation of microfinance organizations” [1].

MICROCAPITAL BRIEF: India Completes Phase I of Jan-Dhan Initiative to Provide Banking Services to Every Household

Arun Jaitley, the Indian Finance Minister, reportedly announced that the government has completed Phase I of the Jan-Dhan initiative, a scheme created by Prime Minister Modi to give all Indians access to banking services, including credit, savings, insurance, direct benefits transfer and electronic payments.

MICROCAPITAL BRIEF: Egyptian Financial Supervisory Association Regulates Microfinance Companies, Setting $2m Capital Requirement

The Egyptian Financial Supervisory Association (EFSA), a governmental body that supervises and regulates the financial sector in the country, recently issued a resolution regulating the activities undertaken by microfinance companies.

MICROCAPITAL BRIEF: Microcredit Regulatory Authority (MRA) of Bangladesh Launches Lead Microfinance Institution System to Coordinate Poverty-reduction Programmes

The Microcredit Regulatory Authority (MRA), a Bangladeshi government body that oversees the operations of nongovernmental organization (NGO) microfinance institutions (MFIs), reportedly is planning the launch of a Lead Microfinance Institution System to coordinate government-funded poverty reduction programmes at the ground level. [1] The model replicates the Lead Bank System present in the country, where a lead bank oversees the arrangement of loan syndications. One goal of this new system is to reduce possible overlaps among international and domestic poverty-reduction programmes that are active in the country. MRA Director Sazzad Hossain also offered the following example of what a lead MFI would do: “Suppose, 200 people are eligible for credits in an upazila, but under the existing system 150 people are getting the credit facilities. The lead MFI will find out why the rest are not under MFI credit programme.”

MICROFINANCE PAPER WRAP-UP: Peru, Colombia, the Philippines Top 2014 Global Microscope on Microfinance Business Environment

According to the Global Microscope on the Microfinance Business Environment 2014, a recent report by the UK-based Economist Intelligence Unit (EIU), Peru is the top country in enabling microfinance for the seventh consecutive year.

MICROCAPITAL BRIEF: Assets of “Several” Microfinance Institutions (MFIs) Frozen by Azerbaijani Government

An anonymous source has informed MicroCapital that several microfinance institutions (MFIs) in Azerbaijan have had their bank assets frozen by the government over the past few months.

MICROCAPITAL BRIEF: Global Systems for Mobile Association (GSMA) Launches Code of Conduct for Mobile Money Providers

The Global Systems for Mobile Association (GSMA), a UK-based association of 1,000 mobile operators and associated companies, recently launched a “Code of Conduct for Mobile Money Providers” to provide guidance on best practices for its members.

SPECIAL REPORT: European Microfinance Week Participants: Transparency, Competition, Product-specific Rate Caps Can Lower Microloan Interest Rates

To open the two-day conference portion of European Microfinance Week, which is hosted by the 130-member, Luxembourg-based European Microfinance Platform (e-MFP), panelists and attendees addressed “Balancing financial inclusion, market stability and client protection.” Narda Sotomayor, who leads the Department of Microfinance Analysis at Peru’s Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones, stated that “MFIs [microfinance institutions] moving further down market to serve new people is risky, as this group has less financial education, less collateral. An institution’s credit portfolio can deteriorate quickly unless its lending methodology is revised as part of a dynamic process.” On the issue of increasing financial capability, she added, “We find synergies between financial education and stability. This also leads to benefits for institutions and the whole system.”

MICROCAPITAL BRIEF: Technology Recognized as Tool to Improve Property Rights, Payment Platforms, Reduce Transaction Costs at International Monetary Fund (IMF) Seminar: “Future of Finance – Technology and Financial Inclusion”

The International Monetary Fund (IMF), a US-based arm of the United Nations, and the US-based World Bank Group, recently held a seminar on technology and financial inclusion as part of its seminar series entitled “The Future of Finance,” panelists discussed the role of technology as a tool to amend market failures in the provision of financial services for low-income people such as via the documentation of property rights and reductions in transaction costs.

MICROCAPITAL BRIEF: International Monetary Fund (IMF) Releases 2014 Financial Access Survey (FAS)

The International Monetary Fund (IMF), a US-based organisation that is part of the United Nations, has released the results of its 2014 Financial Access Survey (FAS), a publication that provides data and analysis on financial inclusion around the world.

SPECIAL REPORT: Narda Sotomayor on Regulating Microfinance via Proportionality, Financial Education and Mobile Money in Peru

MicroCapital: Can you tell us a bit about your talk planned for European Microfinance Week on “balancing financial inclusion with market stability”?

Narda Sotomayor: A key element to achieve this balance is the principle of proportionality, under which regulations vary based on the risks associated with the product or service in question. For instance, for microloans for businesses with overall debt below PEN 20,000 (USD 7,000), the required documentation is minimal, and loan provision requirements are based only on the number of days any loans are overdue. The lender has the freedom to establish prices to cover its costs, such that institutional sustainability is guaranteed. It was determined that anti-money-laundering rules were making it too costly to open deposit accounts for the poor, mainly because of the heavy burden of “know-your-customer” documentation.

MICROCAPITAL BRIEF: Microfinance Institutions in Ghana to Charge Clients Unspecified Fee for Maintaining Deposits Beginning in October 2014

According to a statement attributed to Mr. Collins Amponsah, the board chairman of the Ghana association of microfinance companies (GAMC), an association of 560 member companies providing microfinance services, all Ghanaian microfinance institutions (MFIs) that are members of GAMC will begin charging clients an unspecified fee for managing their deposits beginning in October of 2014.