MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Enables “Small Finance Banks” in Effort to Promote Financial Inclusion

The Reserve Bank of India (RBI), the country’s central banking authority, recently issued guidelines for the licensing of “small finance banks,” which are intended to provide credit and savings services to small businesses, small-scale farmers and other entities in the “unorganized sector.”

MICROCAPITAL BRIEF: CDC, Creation Investments, DEG, International Finance Corporation (IFC), FMO Acquire 40% Equity Stake in India’s Equitas for $51.4m

The Commonwealth Development Corporation (CDC), which is owned by the UK government; Creation Investments Capital Management (Creation Investments), a US-based alternative investment management company; Deutsche Investitions-und Entwicklungsgesellschaft GmbH (DEG), a German development finance institution offering long-term project and company financing; the International Finance Corporation (IFC), the private-investment arm of the World Bank Group; and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch development bank, recently announced that they will invest a total of INR 325 cores (USD 51.4 million) to acquire 40 percent of the shares of Equitas Holdings, an Indian microfinance lender.

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: UK Department for International Development (DFID), Bill and Melinda Gates Foundation to Create Digital Financial Services Unit in Pakistan

The Department for International Development (DFID), a development agency of the British government, and the Bill and Melinda Gates Foundation, a US-based nonprofit that supports innovations in health and education, recently signed a memorandum of understanding (MoU) at the International Branchless Banking Conference 2014 in Pakistan.

MICROCAPITAL BRIEF: European Investment Bank (EIB), Government of Luxembourg Sign Memorandum of Understanding to Provide $4.5m in Grants to Microfinance Institutions (MFIs) in African, Caribbean, Pacific Countries

The Luxembourg-based European Investment Bank (EIB), the long-term lending bank of the European Union (EU), and the Government of Luxembourg recently signed a memorandum of understanding (MoU) to provide grants totaling EUR 3.6 million (USD 4.5 million) to unspecified microfinance institutions (MFIs) in Africa, the Caribbean and the Pacific.

MICROCAPITAL BRIEF: Impact Investment Exchange Asia (IIX) Launches Impact Accelerator in Philippines to Provide Financial, Operational Support to Early-Stage Social Enterprises

Impact Investment Exchange Asia (IIX), a Singapore-based for-profit company that provides capital to social enterprises (SEs), recently launched an Impact Accelerator program in the Philippines that will provide four early-stage SEs with seed capital and tailored mentorship and advisory services in an effort to decrease the time needed for the businesses to grow.

MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Loan $30m to Rizal Commercial Banking Corporation (RCBC) of Philippines to Fund Small, Medium-sized Enterprises; Women-led Businesses

The International Finance Corporation (IFC), a member of the US-based World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, recently announced that it has approved a “medium-term loan”[1] of up to USD 30 million to the Rizal Commercial Banking Corporation (RCBC), a commercial bank in the Philippines.

MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Expected to Loan $5m in Local Currency to Imon International of Tajikistan

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution that finances development projects in Eastern Europe, Central Asia and North Africa, is expected to issue a four-year, senior loan worth the local-currency equivalent of USD 5 million to Imon International, a microfinance institution (MFI) based in Tajikistan, to increase its lending to small-and medium-sized enterprises (SMEs).

MICROCAPITAL BRIEF: Lok Capital of Mauritius Seeking $100m for Third Fund, First Round Scheduled to Close by April 2015

Lok Capital, a Mauritius-based venture capital fund that focuses on microfinance and other social businesses in India, reportedly is seeking to raise USD 100 million for a new fund that will focus on financial inclusion as its key priority, with agriculture and energy as secondary areas of interest [1].

MICROCAPITAL BRIEF: US Agency for International Development (USAID) to Provide $71m to Government of India for Banking, Clean Energy, Water and Sanitation

The US Agency for International Development (USAID), a government agency that provides international economic and humanitarian assistance, recently committed up to USD 71 million to the Government of India to support the country’s banking, clean energy and water and sanitation sectors.

MICROCAPITAL BRIEF: European Investment Bank (EIB) to Loan $31m to AccessBank Azerbaijan for On-lending to Small, Medium-Sized Enterprises (SMEs)

The Luxembourg-based European Investment Bank (EIB), the long-term lending bank of the European Union (EU), recently announced that it is extending an intermediated senior loan totaling EUR 25 million (USD 31 million) to AccessBank Azerbaijan, a microfinance bank (MFB) in Azerbaijan, for on-lending to small and medium-sized enterprises (SMEs) in the country.

MICROCAPITAL BRIEF: Bank of Thailand (BOT) to Aid Non-Bank Lenders in Providing “Nano-Loans” of $3040 to $3650

The Bank of Thailand (BOT), the country’s central bank, recently announced that it will introduce a “nano-financing” financial education scheme to enhance the ability of non-bank lenders to provide “nano-loans” that range from THB 100,000 (USD 3040) to THB 120,000 (USD 3650) and carry an annual interest rate of 30 to 36 percent.

SPECIAL REPORT: Distinguishing Multiple Lending from Over-indebtedness at European Microfinance Week

“Multiple borrowing was endemic,” in Bangladesh as of 2008, says Shameran Abed, the director of microfinance at Bangladesh-based Brac International, “but we didn’t know if this was bad, although we knew it was a risk.” Mr Abed was speaking this morning at the opening plenary of the last day of European Microfinance Week, which is organized by the Luxembourgish NGO European Microfinance Platform (e-MFP). In the past, he explained, the members of borrowing groups were good at letting Brac staff know who was a good credit risk. As the market was getting saturated, “Groups became less cohesive, so we couldn’t totally rely on them to tell us if individuals were becoming overindebted.”

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: Symbiotics Issues Bonds Totaling $9.3m to Prasac of Cambodia, AccessBank Azerbaijan 

Symbiotics Group, a Swiss for-profit provider of investment and business services, recently issued bonds totaling USD 9.3 million to Prasac, a Cambodian microfinance institution (MFI), and AccessBank Azerbaijan, a microfinance bank (MFB) in Azerbaijan.

MICROCAPITAL BRIEF: Center for Agriculture and Rural Development (CARD) Mutually Reinforcing Institutions, Microcredit Summit Campaign, Freedom from Hunger Partner to Launch “Healthy Mothers, Healthy Babies” in Effort to Reach 600k Filipino Women

The Center for Agriculture and Rural Development Mutually Reinforcing Institutions (CARD MRI), a group of organizations in the Philippines that includes CARD Bank; the Microcredit Summit Campaign, a US-based advocacy organization; and Freedom from Hunger, a US-based non-governmental organization (NGO) that offers financial and health protection services in 23 countries, launched the program “Healthy Mothers, Healthy Babies,” which is expected to provide maternal health services to 600,000 Filipino women.

MICROCAPITAL BRIEF: Dianrong.com to Expand Peer-to-Peer Lending to Small Businesses in China Via Joint Venture With Bank of Suzhou

The Bank of Suzhou Limited, a Chinese commercial bank, has announced that it will collaborate with Dianrong.com, a Chinese peer-to-peer lending platform, to build a website to intermediate loans from members of the public to micro- and small enterprises.

MICROCAPITAL BRIEF: Hivos-Triodos Fund (HTF) Loans $3.1m to India’s IntelleGrow for Loans to Small, Medium-Sized Enterprises

The Hivos-Triodos Fund (HTF), a Netherlands-based microfinance investment vehicle, recently loaned EUR 2.5 million (USD 3.1 million) to IntelleGrow, an Indian nonbank financial company that specializes in making loans to small and medium-sized “social enterprises” in the agriculture, clean energy, education, financial, healthcare, sanitation and water sectors.