Category: Risks

MICROCAPITAL BRIEF: Bangko Sentral Ng Pilipinas (BSP) Increases Maximum Microinsurance Benefits for Clients in the Philippines to $11k

The Bangko Sentral Ng Pilipinas (BSP), the central bank of the Philippines, has issued Circular Number 841, which amends the Manual of Regulation for Banks, increasing mandated maximum microinsurance premiums and benefits. Continue reading

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MICROFINANCE PUBLICATION ROUND-UP: Microfinance “Banana Skins” Risk Assessment; Effects of Microloans from Compartamos in Mexico; Youth Financial Inclusion Video

“Microfinance Banana Skins 2014: Facing Reality;” published by Centre for the Study of Financial Innovation; July 2014; 84 pages; available athttp://csfi.org/files/Microfinance_Banana_Skins_2014_-_WEB.pdf

This report, which is based on data collected by surveying 306 people associated with the microfinance industry, examines 19 risks faced by microfinance institutions (MFIs) across the globe. Continue reading

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MICROFINANCE PUBLICATION ROUND-UP: Over-indebtedness in Mexico; Achieving Customer Centricity; Managing Over-indebtedness

“Over-Indebtedness in Mexico: Its Effect on Borrowers;” published by Microfinance CEO Working Group; May 2014; 32 pages; available at http://microfinanceceoworkinggroup.org/wp-content/uploads/2014/05/Over-Indebtedness-in-Mexico-Its-Effect-on-Borrowers-552014.pdf

This report cautions lending institutions in Mexico about rising levels of over-indebtedness – meaning more borrowers cannot reasonably repay their debts – which can threaten the financial system as well as the economic outlook of low-income individuals. Continue reading

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MICROCAPITAL BRIEF: PlaNet Finance, China Microfinance Institution Association (CMIA) Seek to Strengthen Risk Management

PlaNet Finance, an NGO based in Paris, France, recently announced a partnership with the China Microfinance Institution Association (CMIA), a trade group of microfinance institutions (MFIs), to enhance risk management in the microfinance industry in China. Continue reading

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MICROCAPITAL BRIEF: Entrepreneurial Finance Lab Offers Microfinance Institutions (MFIs) Credit Scores for Micro-, Small Enterprises (MSEs) Based on Psychometric Tests

In an effort to promote financing to self-employed entrepreneurs and micro- and small enterprises (MSEs) in emerging economies, Entrepreneurial Finance Lab (EFL), a US-based company, is employing psychometric analyses to assess the creditworthiness of loan applicants. Continue reading

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OPINION: No Silver Bullet: While Microfinance Alone Won’t End Poverty, It Is Making an Impact – So Let’s Re-focus It to Serve the Poor

The debate about the contributions that microfinance is making to global poverty alleviation is an interesting one. But it’s also getting a little tedious.

We are all disappointed that microfinance has not, as the popular culture has promoted it, proven to be the “silver bullet” for poverty alleviation. If, however, we challenge ourselves to really understand (and be transparent about) the strengths and limitations of microfinance, and begin to think about it as just one part of a more comprehensive package of development services, the debate (and potential for impact) becomes much more interesting. Continue reading

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MICROFINANCE PAPER WRAP-UP: “Using Subsidies for Inclusive Insurance: Lessons from Agriculture and Health;” by Ruth Vargas Hill, Gissele Gajate-Garrido, Caroline Phily, and Aparna Dalal; Published by International Labour Organization

“Using Subsidies for Inclusive Insurance: Lessons from Agriculture and Health;” by Ruth Vargas Hill, Gissele Gajate-Garrido, Caroline Phily, and Aparna Dalal; published by International Labour Organization; January 2014; 55 pages; available at http://www.microinsurancefacility.org/publications/mp29

This report was published by the Microinsurance Innovation Facility, a nonprofit research institution housed within the UN’s International Labour Organization (ILO) that promotes the development of insurance products and risk-mitigation markets in developing economies. Continue reading

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MICROCAPITAL BRIEF: MFX Solutions, Fonds pour l’Inclusion Financière en République Démocratique Congo to Provide Technical Assistance to Banks, Microfinance Institutions (MFIs)

MFX Solutions, a US-based company that provides currency hedging solutions for microfinance institutions (MFIs) and microfinance investment vehicles (MIVs), recently announced that it has entered into a two-year technical assistance partnership with Fonds pour l’inclusion financière en république démocratique Congo, a nonprofit microlending organization in the Democratic Republic of Congo (DRC) that is known by its English acronym FPM, in an effort to help financial institutions better manage risks. Continue reading

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MICROCAPITAL BRIEF: Indian Microfinance Institutions Trident, Bhartiya Samruddhi Finance Limited (BSFL) May Close Due to Lack of Funds

Trident Microfin Private Limited, a microfinance institution (MFI) in India, reportedly may shut down operations after being denied a loan write-down and additional funding from a forum of 21 lenders in the Indian state Andhra Pradesh. Continue reading

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SPECIAL REPORT: Why Microfinance Institutions Offer Unprofitable Housing Loans

On November 14, the closing day of the European Microfinance Platform’s (e-MFP’s) European Microfinance Week, Wilson Twamuhabwa, CEO of Uganda’s Ugafode Microfinance Limited, explained that his organization began to offer housing loan products partly because its clients were using 30 percent of their loans for housing anyway. Continue reading

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SPECIAL REPORT: Overcoming Barriers to Agricultural Microfinance

At European Microfinance Week, which is hosted by Luxembourg’s 140-member European Microfinance Platform (e-MFP), Daniela Rottger, a consultant to German development finance institution Deutsche Investitions-und Entwicklungsgesellschaft (DEG), spoke Wednesday about her study of the agricultural lending products offered by several African banks and microlenders. Continue reading

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SPECIAL REPORT: Women Microfinance Clients Often Save More, Are More Loyal to Lenders

At today’s session on gender at European Microfinance Week in Luxembourg, panelists eschewed the idea that lenders have a moral obligation to serve a greater proportion of women. Instead, Anne-Marie Chidzero of South Africa and Anna Gincherman of the US-based Women’s World Banking (WWB) network both argued strenuously that lenders are leaving money on the table by failing to reach out to women. Continue reading

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SPECIAL REPORT: Michael Chu: “Disrupt this Old Model to Unlock the Potential of Microfinance”

At today’s opening plenary of European Microfinance Week, which is hosted by Luxembourg’s 140-member European Microfinance Platform (e-MFP), Michael Chu of the US-based Harvard Business School and the Mexico-based venture capital fund Ignia, argued that microfinance is generally implemented using a 20-year-old model that is inefficient and “ripe for disruption” through technology. Continue reading

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SPECIAL REPORT: “Making Microfinance Investment Responsible” Group Wrestles with Inconsistent Data Reporting at European Microfinance Week

On this first day of European Microfinance Week, which is hosted by the 140-member European Microfinance Platform (e-MFP) of Luxembourg, e-MFP’s “Making Microfinance Investment Responsible” Action Group convened to work on the data it has collected on client protection from 10 microfinance investors, rating agencies and NGOs. Continue reading

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MICROCAPITAL BRIEF: Développement International Desjardins (DID) Invests in Microfinance Currency Hedging Company MFX Solutions

Développement International Desjardins (DID), a nonprofit organization based in Canada that provides technical support and investment for development finance in emerging economies, has invested an unspecified amount in US-based MFX Solutions, a company that provides currency hedging solutions for microfinance institutions (MFIs) and microfinance investment vehicles (MIVs) [1]. Continue reading

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