Category: Risks

MICROCAPITAL BRIEF: FinMark Trust, Centre for Financial Regulation & Inclusion, The MasterCard Foundation to Create “insight2impact” Data Facility to Assess Banking Needs of Poor People

The FinMark Trust, a nonprofit that promotes financial inclusion and regional financial integration; the Centre for Financial Regulation & Inclusion (CENFRI), a nonprofit affiliated with FinMark Trust; and The MasterCard Foundation, a Canadian organization founded by the US-based payments firm MasterCard, recently have announced that they will launch a joint data facility named “insight2impact” (i2i). Continue reading

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Written by Comments Off on MICROCAPITAL BRIEF: FinMark Trust, Centre for Financial Regulation & Inclusion, The MasterCard Foundation to Create “insight2impact” Data Facility to Assess Banking Needs of Poor People Posted in Risks, Transparency

MICROFINANCE PUBLICATION ROUND-UP: Islamic Banking and Growth; Sharia-Compliant Microfinance Products; Islamic Financial Services in Yemen

“Is Islamic Banking Good for Growth?”; by Patrick Imam and Kangni Kpodar; published by the International Monetary Fund; April 2015; 33 pages; available at: http://www.microfinancegateway.org/library/islamic-banking-good-growth

This paper analyzes the relationship between the development of Islamic banking and economic growth in low- and middle-income countries, finding that “countries where Islamic banking is present experience faster economic growth than others” [1]. Continue reading

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SPECIAL REPORT: Crédit Rural de Guinée Wins $110k European Microfinance Award for Response to Ebola

Crédit Rural de Guinée (CRG) has been announced as the winner of the 6th European Microfinance Award, focusing this year on Microfinance in Post-disaster, Post-conflict Areas & Fragile States, for its innovative response to the Ebola outbreak in Guinea. The Award was presented during European Microfinance Week by Her Royal Highness the Grand Duchess of Luxembourg, during a ceremony on 19th November held at the European Investment Bank headquarters in Luxembourg. Continue reading

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MICROFINANCE EVENT: Microfinance Egypt Summit, March 23-24, 2016, Cairo, Egypt

Event Name: Microfinance Egypt Summit

Event Dates: March 23-24, 2016

Event Location: The Nile Ritz-Carlton Cairo, Egypt Continue reading

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SPECIAL REPORT: Anne Contreras and Christoph Pausch of e-MFP on European Microfinance Week, Sustainable Growth, Serving Clients in Zones Affected by Boko Haram

MicroCapital: Would you please discuss this year’s focus on sustainable development?

Anne Contreras: Given the recent adoption of the UN Sustainable Development Goals, this issue is particularly relevant. The plenary on “Sustainable Development Goals and financial inclusion” will address the topic directly. Breakout sessions will also cover related topics: How can we implement clean cooking options to decrease mortality and mitigate air pollution? How can practitioners bundle finance and training to serve farmers? What can networks do in these areas? Continue reading

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SPECIAL REPORT: On “Microfinance in Crisis,” an Interview with Edvardas Bumsteinas of the European Investment Bank, Host of the European Microfinance Award Ceremony

MicroCapital: Please tell us a bit about how you to came to work in microfinance.

Edvardas Bumsteinas: My interest in microfinance began with a summer job some 20 years ago when I was a student at the London School of Economics. At the request of Lithuania’s Open Society Institute, I spent one of my summers helping to set up external financing facilities for the Lithuanian Credit Union’s network. During my meetings with staff members and clients, I was impressed with positive results that those member-owned financial institutions were having in their communities.

MC: In reading about the European Investment Bank (EIB)-funded Microfinance in Crisis project, I was struck by the language “The main thing is to make the system user-centric, not provider-centric, and to consider microfinance (and more broadly finance) as a common good.” Continue reading

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Written by Comments Off on SPECIAL REPORT: On “Microfinance in Crisis,” an Interview with Edvardas Bumsteinas of the European Investment Bank, Host of the European Microfinance Award Ceremony Posted in European Microfinance Week, Risks

MICROCAPITAL BRIEF: Bank of Ghana Rejects Appeal by Customers of DKM Diamond Micro-Finance Limited; President Intervenes

The Bank of Ghana (BoG), the country’s central bank, recently rejected an appeal by the customers of the Ghana-based savings and microfinance company DKM Diamond Micro-Finance Limited (DKM) who had requested their cash deposits and matured investments with DKM to be paid out. BoG rejected the appeal due to the investigation into DKM’s practices being pending. BoG argued that it had to establish whether the MFI had violated the Ghanaian banking act before it allowed access to funds held by DKM. Continue reading

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Written by Comments Off on MICROCAPITAL BRIEF: Bank of Ghana Rejects Appeal by Customers of DKM Diamond Micro-Finance Limited; President Intervenes Posted in Africa, Regulation, Risks

SPECIAL REPORT: Boosting Rural Finance via Collaboration Among AFMIN, AMT Forum, AFRACA, MAIN

Semaine Africaine de la Microfinance (SAM) is a production of four African microfinance networks in collaboration with Luxembourgish NGO ADA. As this is only the second SAM, a session was held this week on how the networks can expand their collaboration to increase their effectiveness in promoting rural finance on the continent.

Davy Serge Azakpame, the CEO of the Benin-based African Microfinance Network, proposed “creat[ing] an advocacy group to pressure government to boost funding for rural areas.” Continue reading

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SPECIAL REPORT: Opening Ceremonies of Semaine Africaine de la Microfinance (SAM) Raise Hopes of Reducing Poverty Through Improved Value Chains, Government Support of Agriculture

African Microfinance Week, also known as Semaine Africaine de la Microfinance (SAM), was launched this morning in Dakar, Senegal, by speakers including Minister Moustapha Diop of Senegal’s Ministry of Women, Family and Children. (While related meetings, training sessions and vendor presentations are running from June 25 through July 3, the main conference sessions are being held on June 30 and July 1.)

Minister Diop Opens SAM

In keeping with the event theme, “Accelerating Innovative Rural Finance in Africa,” Minister Diop argued that climate change is expected to reduce crop yields in Africa over time and that “to focus on this challenge, family farms are needed, and they need access to finance. Government is helping them, but they need more…. We would like to attract financing to the rural zones; by merging the efforts of the public and private sectors, we will meet this challenge.” Continue reading

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MICROFINANCE PAPER WRAP-UP: “Is Health Microinsurance Sustainable? An Analysis of Five South Asian Schemes,” by Michael E. Weilant, published by the International Labour Organization

“Is Health Microinsurance Sustainable? An analysis of Five South Asian Schemes,” by Michael Weilant, published by the International Labor Organization, May 2015, 45 pages, available at: http://www.impactinsurance.org/sites/default/files/mp41_final.pdf

This paper analyzes five health microinsurance (HMI) schemes operating in India, Bangladesh and Pakistan in order to evaluate the sustainability of HMI. All five schemes were in operation for more than 3 years and serve more than 25,000 active customers. Continue reading

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MICROFINANCE PUBLICATION ROUND-UP: Morocco’s Microfinance Market; Trends in Funding Financial Inclusion; Growth Projections in Islamic Microfinance

“Ending the Microfinance Crisis in Morocco: Acting early, acting right;” published by the International Financial Corporation in partnership with the Canadian Department of Foreign Affairs, Trade, and Development; the Danish International Development Agency; Japan; Switzerland’s State Secretariat for Economic Affairs; and UKaid; October 2014; available at http://www.ifc.org/wps/wcm/connect/5e1e5a0047850bdba0d4f5299ede9589/IFC+Morocco+MicroFinance+Crisis+report.English.pdf?MOD=AJPERES
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Da Afghanistan Bank (DAB), International Development Association (IDA), International Finance Corporation (IFC), Harakat Implement Credit, Collateral Registry in Afghanistan

Da Afghanistan Bank (DAB), the central bank of Afghanistan, recently implemented a credit infrastructure modernization project involving the establishment of Collateral Registry (CR) and Public Credit Registry (PCR) systems, which enable automation of loan processing by tracking information about clients, outstanding loans and assets pledged to back those loans. Continue reading

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MICROCAPITAL BRIEF: International Labour Office’s (ILO’s) Impact Insurance Facility, Agence Francaise de Developpement (AFD) Seek to Stimulate Innovation in Microinsurance in Sub-Saharan Africa

The Impact Insurance Facility of the UN’s International Labour Office (ILO) and the French government’s Agence Francaise de Developpement (AFD) recently signed a three-year partnership seeking to strengthen the resilience of middle-income workers in the informal sector in Sub-Saharan Africa. Financial details of this partnership have not been reported. Continue reading

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Written by Comments Off on MICROCAPITAL BRIEF: International Labour Office’s (ILO’s) Impact Insurance Facility, Agence Francaise de Developpement (AFD) Seek to Stimulate Innovation in Microinsurance in Sub-Saharan Africa Posted in Africa, Deals, Key Players, Microinsurance, Risks

MICROCAPITAL PUBLICATION ROUND-UP: Improving the Wellbeing of the Poorest of the Poor; Finance in Motion’s Impact Investment Report; Investing in Africa’s Small, Growing Businesses

“A multifaceted program causes lasting progress for the very poor: Evidence from six countries;” published by American Association for the Advancement of Science (AAAS), 2015-05, available at http://dspace.mit.edu/handle/1721.1/97047

This study reports that a multifaceted “graduation” program generated improvements in the wellbeing of the “poorest of the poor.” Continue reading

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Written by Comments Off on MICROCAPITAL PUBLICATION ROUND-UP: Improving the Wellbeing of the Poorest of the Poor; Finance in Motion’s Impact Investment Report; Investing in Africa’s Small, Growing Businesses Posted in Africa, Investment Funds, Risks, Trends/Challenges

SPECIAL REPORT: European Microfinance Award Application Period Open Through June 3: $110k for Services in Post-Disaster, Post-Conflict, Fragile States

MicroCapital: Please tell us about the theme of this year’s EUR 100,000 (USD 110,000) European Microfinance Award: serving people in post-disaster, post-conflict and fragile states.

Davide Forcella: This is a very timely issue because of the increasing frequency of microfinance institutions (MFIs) being forced to operate under very difficult conditions, due to both natural disasters and human conflict. The aim of the prize is to reward MFIs that Continue reading

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SPECIAL REPORT: June 3 is Deadline to Apply for $106k Sixth European Microfinance Award: “Microfinance in Post-Disaster, Post-Conflict Areas and Fragile States”

Through June 3, the European Microfinance Platform (e-MFP), a Luxembourg-based network of approximately 130 microfinance organizations and individuals, is accepting applications for the Sixth European Microfinance Award, which will include a cash prize of EUR 100,000 (USD 106,000). This year’s award aims to recognize providers of financial services in post-disaster, post-conflict and fragile states. Successful applicants will illustrate their strategy for increasing “both their own resilience and that of their clients,” while highlighting how these services will respond to the immediate, medium- and long-term needs of clients in afflicted areas. To qualify, an institution must be based in a developing country and obtain a letter of support from a member of e-MFP. Continue reading

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MICROFINANCE PUBLICATION ROUND-UP: Maize Insurance in Burkina Faso, Risks to Microfinance in Pakistan, Claims Analysis in Health Microinsurance

“Loan Protection for Maize Farmers in Burkina Faso;” by Barbara Magnoni and Danielle Sobol; published by The MicroInsurance Centre; 2014; 13 pages; available at http://www.microinsurancecentre.org/resources/documents/milk-brief-35-doing-the-math-loan-protection-for-maize-farmers-in-burkina-faso/download.html

This paper presents the findings of a study focusing on the impact of droughts, specifically the costs to maize farmers in Burkina Faso. Continue reading

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SPECIAL FEATURE: Are Microfinance Institutions and Investors Removed from Business Reality?

This opinion piece was contributed by David MacDougall, a consultant based in the US city of New York.

Microfinance inspires optimism. Investors – especially private equity investors – anticipate handsome returns; aid agencies see strong social impact; and microfinance institution (MFI) managers are certain they can grow themselves out of every tight situation. While microfinance can play an important role in development, most MFIs nevertheless are relatively simple financial institutions that need to be grounded in sound market and business principles rather than pie-in-the-sky expectations. These “Business 101” principles, which may sound like common sense truisms, in my experience, have not trickled down to many MFIs. In over 10 years of examining the viability of MFI business models as an analyst and risk manager, I have seen decision makers fail again and again to do reality checks. What’s still urgently needed is sound market analysis and professional risk management. Continue reading

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