Category: Risks

MICROFINANCE PAPER WRAP-UP: “Microfinance at The Margin: Evidence from Bosnia and Herzegovina”; by Ralph De Haas, Heike Harmgart, Britta Augsburg and Costas Meghir; published by European Bank for Reconstruction and Development

By Ralph De Haas, Heike Harmgart, Britta Augsburg and Costas Meghir, published by European Bank for Reconstruction and Development, November 2012, 8 pages, available at: http://www.ebrd.com/downloads/research/economics/publications/specials/bosnia_mircofinance.pdf

This report from the European Bank for Reconstruction and Development (EBRD) describes a randomized field experiment in Bosnia and Herzegovina analyzing the effects that a lack of credit may have on entrepreneurship and poverty. Continue reading

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MICROFINANCE PAPER WRAP-UP: “Microinsurance Product Development for Microinsurance Providers;” by Michael J. McCord; published by Microfinance Centre, Microinsurance Centre, International Fund for Agricultural Development

By Michael J. McCord; published by the Microfinance Centre for Central and Eastern Europe and the New Independent States, the Microinsurance Centre and the International Fund for Agricultural Development (IFAD); 2012; 124 pages; available at: http://www.ifad.org/ruralfinance/wrmf/manual.pdf

In this manual, Mr. McCord proposes a “systematic new-product development process” for the microinsurance market. Continue reading

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MICROCAPITAL BRIEF: Governor Yuba Raj Khatiwada of Nepal Rastra Bank Cites Multiple Lending and Low Outreach to Poor People by Microfinance Sector

Governor Yuba Raj Khatiwada of the Nepal Rastra Bank (NRB), the central banking authority of the country, reportedly expressed concern that “the growing tendency of lending money to people who have already taken a loan from other financial institutions might expose the microfinance sector to risk.” Continue reading

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MICROFINANCE PAPER WRAP-UP: “Microfinance in Myanmar Sector Assessment”; by Eric Duflos, Paul Luchtenburg, Li Ren and Li Yan Chen; published by CGAP (Consultative Group to Assist the Poor), International Finance Corporation

By Eric Duflos, Paul Luchtenburg, Li Ren and Li Yan Chen, published by CGAP (Consultative Group to Assist the Poor) and International Finance Corporation, January 2013, 43 pages, available at:  http://www1.ifc.org/wps/wcm/connect/d87bf8804e5aba9bad7dadfce4951bf6/Microfinance+in+Myanmar+Sector+Assessment-Final.pdf?MOD=AJPERES

This joint CGAP (Consultative Group to Assist the Poor) and International Finance Corporation (IFC) report reviews the current state of Myanmar’s microfinance sector and the challenges involved with its future development. Continue reading

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MICROFINANCE PAPER WRAP-UP: “Map of Microfinance Distribution in India” by Amulya Krishna Champatiray, Parul Agarwal and Santadarshan Sadhu; published by the Centre for Micro Finance (CMF)

By Amulya Krishna Champatiray, Parul Agarwal and Santadarshan Sadhu; published by the Centre for Micro Finance (CMF); 2012; 41 pages; available at: http://www.centre-for-microfinance.com/wp-content/uploads/2012/02/Updated_Final_Report_Map_of_Microfinance_Report_CMF_June27.pdf

This report summarizes the findings of an initiative that gathered information on the portfolios, products and business correspondents of 103 microfinance institutions (MFIs) across India. Continue reading

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MICROCAPITAL BRIEF: Nigeria’s Bank of Industry (BOI) to Set Up Microcredit Fund for Microentrepreneurs in Effort to Promote Financial Inclusion

The Bank of Industry (BOI), which was established by the Nigerian government to promote the industrial sector in Nigeria, recently announced plans to establish a microcredit fund to assist microentrepreneurs in an effort to promote financial inclusion and reduce the risks associated with the small and medium-sized enterprise (SME) industry. Continue reading

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MICROCAPITAL BRIEF: Azerbaijan Microfinance Association Proposes Guarantee Fund for Agricultural Credits

The Azerbaijan Microfinance Association (AMFA), a trade group of 28 microfinance institutions, recently announced that it will explore the possibility of creating a guarantee fund to insure up to 80 percent of an entrepreneur’s agricultural loan. Continue reading

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MICROFINANCE PAPER WRAP-UP: “Financial Inclusion and the Linkages to Stability, Integrity and Protection: Insights from the South African Experience,” published by CGAP

Published by CGAP (Consultative Group to Assist the Poor); November 2, 2012, 47 pages; available at: http://www.cgap.org/sites/default/files/I-SIP%20Report_1.pdf Continue reading

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MICROCAPITAL BRIEF: National Association of Microfinance Banks of Nigeria to Launch Money Market Operation in 2013

The National Association of Microfinance Banks (NAMB), a trade group of microfinance banks in Nigeria, announced that the Microfinance Money Market Operation (MMMO) is in its final stages of completion and will be launched by the first quarter of 2013. Continue reading

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MICROCAPITAL BRIEF: Estimate: 90% of Nigerian Microfinance Clients Commit Fraud to Obtain Loans

The National Association of Microfinance Banks (NAMB) South West Zone, a chapter of Nigerian trade group NAMB, recently hosted a capacity building program on combatting fraud and forgery committed by staff and management of microfinance banks (MFBs). Continue reading

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MICROCAPITAL BRIEF: Fonkoze, Microinsurance Catastrophe Risk Organisation (MiCRO), Make Insurance Payout to Haitian Women After Hurricane Sandy

Microinsurance Catastrophe Risk Organisation (MiCRO), a reinsurance company based in Barbados that provides tropical storm and earthquake reinsurance to microinsurance schemes, is due to make a payout of an undetermined amount to Fonkoze, a Haitian microfinance institution, to help its borrowers, who are largely female microentrepreneurs, recover from Hurricane Sandy, which struck the country in November. Continue reading

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MICROCAPITAL BRIEF: Bank of Ghana Warns of False Advertising by Microfinance Institutions Medlorm Microfinance, African Guarantee Trust, AbbeyCash Microfinance, Swift Financial Services

The Bank of Ghana (BOG), the regulatory and supervisory body with authority over financial institutions in the country, is warning customers of the following Ghanaian microfinance institutions (MFIs) falsely claiming to be licensed by BOG in Ghana: Medlorm Microfinance Limited, African Guarantee Trust, AbbeyCash Microfinance Limited and Swift Financial Services. Continue reading

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SPECIAL REPORT: Panel: Seeking Diversification, Microfinance Investors Often Reap Annual Returns of 4%

On Friday, November 16 at European Microfinance Week, a conference hosted by the Luxembourg-based European Microfinance Platform (e-MFP), Sebastian von Stauffenberg, the CEO of US-based microfinance rating agency MicroRate, said of the larger investment community, “People outside of our microfinance bubble speak another language – if we don’t speak their language, the whole trickle-down effect [of increased investment in microfinance] does not occur.” Mr von Stauffenberg was speaking as part of a panel on microfinance investment that also included Sebastien Juhen of Swiss microfinance investor BlueOrchard Finance, who said that microfinance investment vehicles (MIVs) should work to improve their communication to investors regarding the risks of investing in microfinance including how investment managers address these risks. Continue reading

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SPECIAL REPORT: Responsible Microfinance Implementation Action Group Looks to Boost Usage of Existing Tools, Distributes Template of Covenants for Investors to Attach to Loans to Microbanks

At the European Microfinance Week conference today in Luxembourg, representatives of the European Microfinance Platform (e-MFP) Action Group on the Implementation of Responsible Microfinance led a discussion on its work. The group presented graphics compiling existing social performance tools such as social audits and the publication of pricing data via the US-based nonprofit Microfinance Transparency. One of the suggested steps for microbanks embarking on the process of evaluating its social performance is to make a public commitment through an effort such as the Smart Campaign, which is backed by US-based nonprofit Accion, or the Global Appeal for Responsible Microfinance, which is promoted by a set of institutions led by Oxus Group, an initiative of French NGO Agency for Technical Cooperation and Development (ACTED). Continue reading

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SPECIAL REPORT: Sanjay Sinha of M-CRIL Calls Overexuberant Growth “Recipe for Disaster” at European Microfinance Week Opening

This morning, following a day of member meetings, the European Microfinance Platform (e-MFP) opened its eighth European Microfinance Week, which is themed “Combining Strength, Delivering Results” and aims to address the loss of confidence in many circles that microfinance benefits poor people. In the opening plenary session, Sanjay Sinha, managing director of India’s Micro Credit Rating International Limited (M-CRIL), said that, “Moderate growth is good for inclusion. Rampant growth, which is what we had for a long time in India, is a recipe for disaster…. In order to reduce growth, we need to temper the egos of the promoters of microfinance institutions (MFIs). And we all know we need to dampen the expectations of investors – I’m talking mainly of the Indian commercial banking sector.” Continue reading

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MICROCAPITAL BRIEF: Lack of Law and Order Causes Microfinance Institution (MFI) Ujjivan of India to Put Lending Operations on Hold in Parts of Bihar

Ujjivan Financial Services, a Bangalore-based microfinance institution (MFI), recently put its lending operations on hold in the districts Vaishali and Muzaffarpur in the Indian state of Bihar after an October attack on its customer relations officer, Achchhe Lal Prasad. Continue reading

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MICROCAPITAL BRIEF: MiCRO, Fonkoze of Haiti to Make Insurance Payout to Women Microentrepreneurs in Wake of Tropical Storm Isaac

Microinsurance Catastrophe Risk Organisation (MiCRO), a reinsurance company based in Barbados, is due to make a payout of an undetermined amount to Fonkoze, a Haitian microfinance institution, to help female microentrepreneurs recover from Tropical Storm Isaac, which struck the country in August. Continue reading

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