by the MicroCapital Team -

SPECIAL REPORT: “Trend Toward Rigor,” Microfinance Barometer, Financial Inclusion Compass Offer Views of the Past, Future at European Microfinance Week

At European Microfinance Platformthis week’s session titled “Looking Back / Looking Ahead” at European Microfinance Week, the European Microfinance Platform (e-MFP) officially launched the second Financial Inclusion Compass, a survey indicating the top trends in financial inclusion are: (1) digital transformation (institutional-side); (2) client protection; (3) digital innovation (client-side); (4) regulatory environments; and (5) social performance / impact measurement. Meanwhile, the document identifies the following as top “areas of focus:” (1) agri-finance; (2) climate change; (3) finance for small and medium-sized enterprises (SMEs); (4) finance for displaced populations; and (5) finance for youth.

Sam Mendelson of e-MFP notes that financial services providers (FSPs) responding to the Compass are more interested in

by the MicroCapital Team -

SPECIAL REPORT: Credit Scoring Methods, Data for Farmers, Digital Financial Services on Offer as 30 Firms Showcase Inclusive Finance Products at SAM Innovators’ Village (Part One)

Dozens SAM 2019of firms presented their newest technologies and other products during the full-day Innovators’ Village of the recent SAM conference. Among these was ICCO Cooperation, whose representatives described their organization’s ACAT tool for evaluating the creditworthiness of agricultural producers. ACAT, which was designed in partnership with the French bank Crédit Agricole, offers features to help loan officers who do not specialize in agriculture to evaluate producers’ operations. The tool calculates the input needs per hectare for crops such as sesame as well as predicting farmers’ income. While the pilot phase has gone well, there have been a few challenges, such as poor internet connectivity and difficulty calculating the sizes of the farmers’ plots due to deficient land surveys.

Mohamed Asri of HPS (Hightech Payment Systems) discussed his firm’s PowerCard core banking system, which allows the “client to act as an agent.” The

by Jolene Khor -

MICROFINANCE PAPER WRAP-UP: “Microfinance Barometer 2019,” Published by Convergences

Published by Convergences in partnership with the Advans Group, BNP Paribas, the European Microfinance Platform (e-MFP) and the Grameen Credit Agricole Foundation; October 2019; 16 pages; available at http://www.convergences.org/en/104906-2/

This tenth edition of the “Microfinance Barometer” offers insights into the microfinance sector garnered through interviews, case studies and a review of data from the Microfinance Information Exchange (MIX). The publication explores trends in the sector over

by the MicroCapital Team -

SPECIAL REPORT: Sébastien Boyé of I&P on Microfinance Institutions Digitalizing for SMEs, Taking on “Aggressive New Actors” in Africa

At SAM 2019last week’s SAM conference, Sébastien Boyé, the Chief Investment Officer of Investisseurs & Partenaires, delivered a keynote address on the future of financial inclusion in Africa. Mr Boyé expressed optimism about Africa’s future because of the continent’s dynamism and entrepreneurial spirit. He cited forecasts that by 2050, 250 million new jobs will be created in Africa as the continent’s GDP overtakes that of the EU. In terms of weaknesses, there is significant volatility, and several countries are getting into trouble with too much public borrowing.

Mr Boyé argues that stakeholders in the financial inclusion sector need to focus on topics such as human resources, academic research and digitalization. When it comes to digitalization, institutions must look to

by the MicroCapital Team -

SPECIAL REPORT: Burkinabe PM, Luxembourg Minister Attend SAM Opening Ceremony with Senegalese, BCEAO High Representatives

At SAM 2019the opening ceremony of SAM yesterday, in the presence of Prime Minister Christophe Joseph Marie Dabiré of Burkina Faso, about 900 conference participants had the opportunity to hear commentary from several prominent government officials on the status of financial inclusion in the region. Norbert Toé, Vice Governor of the Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), explained that his institution has made financial inclusion a priority, with the goal of increasing to 75 percent the portion of people in West Africa who have access to affordable financial services. He explained that this is motivated by the idea that financial inclusion supports sustainable development, economic growth and several of the UN Sustainable Development Goals, including gender equity, access to jobs, lower inequality and less hunger. Despite challenges in the realm of technology and other arenas, Dr Toé foresees the regulatory changes that BCEAO is now developing will lead to a “safe, resilient and inclusive financial sector.”

Zahra Iyane Thiam, the Senegalese Minister of Microfinance, Social Economy and Solidarity, described how access to finance affects so many aspects of people’s lives. In addition to helping with access to education and health, it allows entrepreneurs to create wealth, which promotes stability. Ms Thiam expressed concern, however, that

by Jolene Khor -

MICROFINANCE PAPER WRAP-UP: “Making Digital Credit Truly Responsible: Insights From Analysis of Digital Credit in Kenya;” published by MicroSave Consulting, SPTF, Smart Campaign, AFD

Published by MicroSave Consulting, the Social Performance Task Force, the Smart Campaign and Agence Française de Développement; September 2019; 103 pages; available at https://www.microsave.net/wp-content/uploads/2019/09/Digital-Credit-Kenya-Final-report.pdf

This report draws on first-hand data, secondary research and the use of data analytics to provide insights into the Kenyan digital credit sector from the perspectives of both customers and suppliers of digital credit. The authors highlight advances that have been

by Anna Gravois -

MICROCAPITAL BRIEF: RBI Raises Caps on Microfinance Loan Size, Microborrower Income

The Reserve Bank of India (RBI), India’s central banking authority, recently raised the income limit for households to be eligible for microfinance loans from INR 100,000 (USD 1,400) to INR 125,000 (USD 1,760) in rural areas and from INR 160,000 (USD 2,250) to INR 200,000 (USD 2,800) in urban areas. RBI also increased the

by Anna Gravois -

MICROCAPITAL BRIEF: Azerbaijan Implements Movable Collateral Registry, Credit Bureau with Technical Assistance from IFC, Funding from SECO

The government of Azerbaijan, with technical assistance from the World Bank Group’s International Finance Corporation (IFC), has instituted a series of regulatory reforms to improve financial infrastructure in the country. The Azerbaijan Financial Advisory Services program, which was

by the MicroCapital Team -

MICROFINANCE EVENT: SAM (Semaine Africaine de la Microfinance / African Microfinance Week); October 21 – 25, 2019; Ouagadougou, Burkina Faso

The SAM 2019fourth SAM (Semaine Africaine de la Microfinance) includes five full days of trainings, conference sessions, an investors’ fair, an innovators’ village and research presentations, all on the theme “Pathways Towards Impact: African Inclusive Finance for the Sustainable Development Goals.” The training presenters are ADA, Amarante Consulting, Arendt, Banca Etica, BNP Paribas, BRS, Caritas Africa, Food and Agriculture Organization, Graine, Grameen Crédit Agricole Foundation, the Microinsurance Network, MicroSave Consulting, Pamiga,

by Anna Gravois -

MICROCAPITAL BRIEF: The Philippines Passes Law to Encourage Islamic Finance

President Rodrigo Duterte of the Philippines recently signed a law mandating Bangko Sentral ng Pilipinas (BSP), the nation’s central bank, to provide for the regulation and supervision of Islamic banks. An Interagency Working Group on Islamic Banking and Finance will work to

by Jolene Khor -

MICROFINANCE PAPER WRAP-UP: “Taxing Mobile Phone Transactions in Africa: Lessons from Kenya,” by Njuguna Ndung’u

By Professor Njuguna Ndung’u, published by the Africa Growth Initiative at the Brookings Institution, August 2019, 14 pages, available at https://www.brookings.edu/wp-content/uploads/2019/08/Taxing_mobile_transactions_20190806.pdf

In this paper, the author uses data from the Central Bank of Kenya to explore the impact that the taxation of mobile phone financial transactions and airtime may have on the use of mobile

by Eugene DeCosse -

MICROCAPITAL BRIEF: Bank of Ghana Revokes Licenses of 23 Microfinance Banks Due to Insolvency

The Bank of Ghana (BOG) recently revoked the licenses of 23 microfinance banks (MFBs) that became insolvent and remained so despite being given additional time to seek fresh capital from investors. The MFBs reportedly will be able to

by Eugene DeCosse -

MICROCAPITAL BRIEF: Government of India May Waive Microfinance Debt for “Small Distressed Borrowers”

The Indian government reportedly is planning a debt waiver program for “small distressed borrowers” under the country’s insolvency and bankruptcy code. While the criteria under which a borrower would qualify for the program remain under discussion, potential parameters include

by Jolene Khor -

MICROFINANCE PAPER WRAP-UP: “The Inclusion Imperative: A Call to Action. Recommendations for Policy Makers and Regulators from FDC’s Inclusive Growth and Development Initiatives;” by Shawn Hunter

By Shawn Hunter; published by FDC; May 2019; 25 pages; available at https://docs.wixstatic.com/ugd/309bf5_bc2c238a402e45b0aa3125a058f136b6.pdf

Aimed at policy makers and regulators, this report sets out 11 recommendations intended to aid “inclusive growth and development efforts” in the Asia-Pacific region, in line with the financial inclusion priorities

by the MicroCapital Team -

SPECIAL REPORT: Practitioners, Researchers Among Those Sought to Participate in 2019 “Financial Inclusion Compass” Survey of Microfinance Trends

TheEuropean Microfinance Platform European Microfinance Platform (e-MFP), an NGO in Luxembourg with over 130 members, recently began accepting responses to the survey from which it will build second annual Financial Inclusion Compass. The 2018 edition of the Compass identified the following as the most important trends: Client Protection; Regulatory Environment; Governance; Outreach to Low-Income Segments; and Technology & New Delivery Channels. In the New Areas of Focus section

by Eugene DeCosse -

MICROFINANCE EVENT: IAMTN (International Association of Money Transfer Networks) Global Summit; October 2-3, 2019; London, UK

Event Summary: This summit offers those in the cross-border payments industry opportunities to discuss topics such as distributed ledger technology, artificial intelligence, regulations and new products while also providing

by Jolene Khor -

MICROFINANCE EVENT: Africa Global Payment Summit; August 27 – 28, 2019; Johannesburg, South Africa

The 2019 Africa Global Payment Summit will cover “developments in payments and wallets as well as the larger, cross-border regional platforms that are transforming the African payments landscape.” Sessions with address regulatory best practices, bringing together the 16 central banks of the Southern African Development Community to identify what an enhanced global payment system for the region