Category: South Asia, East Asia and Pacific

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. Continue reading

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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. Continue reading

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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.” Continue reading

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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.” Continue reading

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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. Continue reading

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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. Continue reading

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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. Continue reading

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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. Continue reading

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MICROCAPITAL BRIEF: China’s Alibaba Launches Microfinance Arm, Ant Financial, to Consolidate Financial Services Units Including Alipay Mobile Payments, Yu’e Bao Money Market Fund

Alibaba Group Holding Limited, a Chinese internet and e-commerce company, recently launched Ant Financial Services Group, a microfinance arm to consolidate all six of Alibaba’s affiliated entities Alipay, an online payment tool; Alipay Wallet, a mobile payment application; Yu’e Bao, a USD 93 billion money market fund; Zhao Cai Bao, a platform that allows individuals and small businesses directly borrow from investors; Ant Micro, a microfinance provider and MY Bank, an affiliated private bank. Continue reading

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MICROCAPITAL BRIEF: US Agency for International Development (AID), CGAP (Consultative Group to Assist the Poor), The Mastercard Foundation Award $1m to ideas42 for Financial Management Tool for Microentrepreneurs

The US Agency for International Development (AID), a government agency that provides international economic and humanitarian assistance, and CGAP (Consultative Group to Assist the Poor), a US-based, nonprofit that aims to facilitate the expansion of financial access, and The Mastercard Foundation, a Canadian nonprofit that aims to promote youth learning and financial inclusion in emerging markets, recently awarded approximately USD 1 million to ideas42, a US-based nonprofit consulting and behavioral design firm, for the implementation of a SMS text-messaging “push” notification system and voice-based platform that is intended to help microentrepreneurs better manage their finances. Continue reading

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SPECIAL REPORT: Over-indebtedness, Microfinance and Environment Award, Conflict Zones at e-MFP’s European Microfinance Week

MicroCapital: Please describe one of the key issues to be covered this year at European Microfinance Week.

Christoph Pausch: The question of over-indebtedness is still the major risk for the sector, as identified in the most recent Banana Skins survey. We had a very successful plenary last year exploring the issue from a research perspective. This year, we’re taking a very different approach by bringing CEOs of leading microfinance institutions (MFIs) from three countries – Bangladesh, Morocco, and Mexico – to discuss how they’ve been dealing with the issue. Each of these countries has had a different experience, with Bangladesh having successfully averted a potential crisis by slowing market growth (as described in an excellent paper by Stuart Rutherford and Greg Chen). Morocco was one of the original “microfinance crisis” countries during 2008 and 2009, and the MFIs there have had an interesting experience in resolving the problems from that period. Finally, Mexico is a major market with serious concerns regarding over-indebtedness, and MFIs there are working to avert a potential crisis. Continue reading

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MICROCAPITAL BRIEF: National Bank for Agriculture and Rural Development (NABARD) Launches $807m Long-Term Rural Credit Fund

The National Bank for Agriculture and Rural Development (NABARD), a development bank in India that formulates certain credit and banking policies, recently announced the launch of the long-term rural credit fund, which will provide INR 5,000 crores (USD 807 million) for refinancing agricultural loans disbursed by cooperative banks and regional rural banks (RRBs). Continue reading

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MICROCAPITAL BRIEF: Citi Foundation Donates $2m to 7 Initiatives for Financial Education, Capacity Building in India

The Citi Foundation, the charitable arm of US-based financial services provider Citigroup that promotes financial inclusion and other initiatives, recently announced that it has issued the first disbursement from its “Innovation Grant Program”[1] with the aim of increasing its impact in India. Continue reading

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MICROCAPITAL BRIEF: Grameen Crédit Agricole Microfinance Foundation Invests $1.68m in Palestine’s Faten, in Azerbaijan’s Viator, in Bangladesh’s Grameen Danone

The Grameen Crédit Agricole Microfinance Foundation (GCAMF), a provider of financial services to microfinance institutions (MFIs) and other social businesses, recently informed MicroCapital that it has granted loans of EUR 739,000 (USD 937,000) to Faten, a microfinance institution based in the West Bank in Palestine; EUR 702,000 (USD 890,000) to Viator, an Azerbaijani microfinance organization; and a loan, which can be converted into equity, of EUR 240,000 (USD 304,000) to Grameen Danone Foods Limited, a social business in Bangladesh that sells food products containing nutrients that are generally lacking from the regional diet. Continue reading

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MICROCAPITAL BRIEF: Grameen Credit Agricole Microfinance Foundation Lending $1.5m to Chamroeun Microfinance of Cambodia, Koperasi Mitra Dhuafa (Komida) of Indonesia, Tuba Rai Metin (TRM) of Timor-Leste

The Grameen Credit Agricole Microfinance Foundation (GCAMF), a Luxembourg-based investor in microfinance institutions (MFIs) and other social businesses, recently notified MicroCapital that it is disbursing local-currency loans totalling the equivalent of EUR 1.2 million (USD 1.5 million) to three MFIs in South-East Asia: Chamroeun Microfinance, a Cambodian MFI that offers savings, loans and microinsurance, will receive EUR 507,000 (USD 634,000) over a three-year period; Koperasi Mitra Dhuafa (Komida), an Indonesian MFI, will receive EUR 370,000 (USD 463,000) over a four-year period; and Tuba Rai Metin (TRM), a nonprofit MFI that serves women and small businesses in Timor-Leste, will receive EUR 299,000 (USD 374,000) over three years [1]. Continue reading

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