MicroCapital » Transparency

MICROCAPITAL BRIEF: Mexico, Indonesia, Haiti Use Tiered Savings Account Requirements to Promote Financial Inclusion

Natalie Baer — Fri, 10 Feb 2012 15:07:40 +0000

Mexico, Indonesia and Haiti are responding to the challenge of balancing financial access with security by creating tiered requirements for savings accounts. In 2011, Mexico proposed implementation a four-tier account system, with the lowest tier including monthly deposits of up to USD 280. These “Level 1” accounts would be “anonymous,” though the details of how they would be implemented have not yet been determined. At the other end of the spectrum, deposits over USD 3,860 require both photo identification and a tax identification number. In Indonesia, for non-bank e-money accounts of up to USD 110, customer identity is not recorded [1] [3]. In Haiti, the Central Bank allows two mobile money service providers, T-Cash by Voila and TchoTcho Mobile by Digicel, to offer entry-level accounts of up to USD 62 that do not require face-to-face registation [1] [2]. For several years, South Africa also has allowed remote registration for mobile banking, which requires submission of the individual’s national ID number. Transactions conducted via these accounts are capped at USD 146 per day [1].

By Natalie Baer, Research Associate

Sources and Additional Resources:

[1] “Mexico, Indonesia and Haiti Advance Financial Inclusion with Bold Approaches to Account Opening” by Ignacio Mas and Claire Alexandre, http://centerforfinancialinclusionblog.wordpress.com/2012/01/19/mexico-indonesia-and-haiti-advance-financial-inclusion-with-bold-approaches-to-account-opening/

[2] Tracking Mobile Money Use in Haiti,
http://technology.cgap.org/2011/11/22/tracking-mobile-money-use-in-haiti/

[3] Email discussions with Ignacio Mas, Consultant on technology-enabled models for financial inclusion

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

MICROFINANCE PAPER WRAP-UP: Global Microscope on the Microfinance Business Environment 2011

Emilia Akonom — Thu, 09 Feb 2012 19:22:21 +0000

By the Economist Intelligence Unit, funded by The Multilateral Investment Fund, Corporación Andina de Fomento and the International Finance Corporation, October 2011, 72 pages, available at: http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36453519.

This paper examines the microfinance business environments in 55 countries, comparing them across three categories: supporting institutional framework, political stability, and regulatory framework and practices. It is the fifth annual paper in the series, covering the 12-month period through June 2011. The research comprises data collected in 21 countries of Latin America and the Caribbean, 11 countries of Sub-Saharan Africa, seven of Eastern Europe and Central Asia, seven of East Asia, five of South Asia and four of the Middle East and North Africa.

The authors argue that while microfinance has become more mature and sustainable, the global financial downturn lead to a downgrade in the quality of some loan portfolios resulting in the need for improvement, especially within risk management. The report benchmarks the regulatory framework and operating environment in each evaluated country. The factors included in the scoring are: regulation and supervision of microcredit portfolios, legal recognition for microfinance institutions (MFIs), regulatory and supervisory capacity for microcredit and other microfinance services, deposit policies, accounting transparency, client protection, credit bureaus and political stability.

The two countries of East and South Asia that are rated as having the most favorable conditions for microfinance operations are Pakistan and Philippines. Both receive strong scores for regulatory frameworks and are in the top ten positions in the overall ranking. Cambodia, ranked 13th, also has an advantageous environment for MFIs. There is an expectation of positive change in Thailand where the Ministry of Finance has appointed new body to deal with microfinance matters and the central bank eased regulations. In China, although the number of MFIs has been growing, the sector is still in the early stages of development. India’s ranking dropped due to new regulatory limits on interest rates and lending margins. Countries such as Sri Lanka and Vietnam are still in the process of formulating regulatory mechanisms for microfinace.

Countries of Eastern Europe and Central Asia generally occupy middle positions in the ranking. The position of the Kyrgyz Republic dropped nine spots to settle at 21 as the regime change in 2010 annulled plans for modernization of relevant law. Armenia and Bosnia focused their efforts on consumer protection, and both countries score highly for financial reporting standards.

Peru and Bolivia perform best in the ranking not only in Latin America and the Caribbean region but also globally. The authors of the ranking find that in Peru the sector benefits from a well-defined legal framework and effective supervisory capacity. On the other hand, microfinance in Bolivia continues to prosper regardless of civil unrest. As the operations environment for microfinance has improved in Mexico and Panama, both countries jumped in the ranking to finish in a tie at tenth place. Brazil climbed up twelve spots as a result of strong financial inclusion and innovations in agent banking. Trinidad and Tobago, Venezuela, Haiti and Argentina are among those occupying the bottom ten spots worldwide.

The growth of microfinance has decreased in a number of Arab countries due to political unrest. Current affairs had a particularly bad influence on the operating environment in Yemen. Despite clear regulation and rapid growth in the sector in Yemen over the last several years its rank this year sank 17 positions – still the best in the Middle East and North Africa. While Egypt’s legislation does not allow the provision of microcredit by non-bank commercial companies, Morocco has been boosting its investment climate for microfinance. On the other hand, Lebanon only lightly regulates with regards to microfinance.

Kenya scores the highest in Sub-Saharan Africa and is fourth in the global ranking. Neighboring Uganda finishes ninth globally and, alongside Pakistan and Philippines, is the leader of the category for regulatory framework and practices. Rwanda ranks 15th based on government support of microfinance activities, especially in rural areas. In Nigeria, the central bank revised its microfinance policy in April 2011 but faces difficulties with enforcement. The central banks also have issues with supervising MFIs in Democratic Republic of Congo, Ghana and Senegal. In Madagascar, the market size has increased and there is a comprehensive legal framework and a promotion unit, but serious transparency issues remain.

By Emilia Akonom, Research Associate

Sources and Additional Resources:

Global Microscope on the Microfinance Business Environment 2011 http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=36453519

MicroCapital Universe Profile: Multilateral Investment Fund (MIF) http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Multilateral+Investment+Fund+%28MIF%29

MicroCapital Universe Profile: Corporación Andina de Fomento (CAF) http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Corporaci%C3%B3n+Andina+de+Fomento+%28CAF%29

MicroCapital Universe Profile: International Finance Corporation (IFC)http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital.org story, October 23, 2011, MICROCAPITAL BRIEF: Peru Tops 2011 Global Microscope Index on Microfinance Business Environment http://www.microcapital.org/microcapital-brief-peru-tops-2011-global-microscope-index-on-microfinance-business-environment/

MicroCapital.org story, May 10, 2011, MICROCAPITAL BRIEF: Banko Sentral ng Pilipinas (BSP) Convenes Microfinance Stakeholders Summit Celebrating “Microscope” Ranking from the Economist http://www.microcapital.org/microcapital-brief-bangko-sentral-ng-pilipinas-bsp-convenes-microfinance-stakeholders-summit-celebrating-microscope-ranking-from-the-economist/

MicroCapital.org story, October 15, 2010, MICROCAPITAL BRIEF: The Economist Intelligence Unit “Microscope” Study Discusses Challenges to The Rapidly Growing Microfinace Industry http://www.microcapital.org/microcapital-brief-the-economist-intelligence-unit-microscope-study-discusses-challenges-to-the-rapidly-growing-microfinance-industry/

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/tiki-index.php

MICROCAPITAL BRIEF: MFTransparency Releases Microfinance Pricing Data for Mozambique

Natalie Baer — Tue, 07 Feb 2012 19:20:01 +0000

On February 6, 2012, as part of its Transparent Pricing Initiative US-based NGO MFTransparency released microloan pricing data from microlenders in Mozambique. As part of this launch, webinars are available on pricing dynamics in the region and regarding the transparent communication of prices to clients [1].

The Transparent Pricing Intiative is part of a larger MFTransparency project funded by Canada’s MasterCard Foundation and known as the enabling Africa to Price Responsibly & Educate on Interest Rates (enabling APR & EIR) program [1] [2]. Since 2010, the project has endeavored to improve the microloan markets in Malawi, Uganda, Rwanda, South Africa, Ghana, Tanzania, Zambia and Mozambique by publishing comparable data on the interest and fees charged on microfinance loans. Additionally the program includes training seminars, technical assistance and the production of educational materials. As of January 2012, MFTransparency has collected data from about 30 countries on four continents, including 16 countries in Sub-Saharan Africa [1].

By Natalie Baer, Research Associate

About MFTransparency: MFTransparency is a US-based nongovernmental organization (NGO) that was launched in July 2008 to provide information on microcredit products and their prices. MFTransparency collects data on the interest and fees charged on microfinance loan products in order to calculate and publicize the effective interest rates charged on those loans. According to its website, 889 industry stakeholders have endorsed its efforts as of 2011. As of January 2012, MFTransparency has collected data from about 30 countries on four continents, including 16 countries in Sub-Saharan Africa.

About the MasterCard Foundation: Based in Canada, the MasterCard Foundation is a private foundation with the goal of enabling people living in poverty to improve their lives with increased access to microfinance and education. The foundation was established in 2006 by a gift of shares from payment processor MasterCard Worldwide during the company’s initial public offering. As of 2010, the MasterCard Foundation reported approximately CAD 3 billion (the equivalent of USD 2.9 billion) in assets.

Sources and Resources:

[1] MFTransparency Press Release, “Launch of Mozambique Pricing Data by MFTransparency.”

[2] Enabling Africa to Price Responsibly & Educate on Interest Rates, http://www.mftransparency.org/pages/enabling-africa-to-price-responsibly-educate-on-interest-rates/

MICROCAPITAL BRIEF: MFTransparency Releases Microloan Pricing Data for Ghana, Zambia, Tanzania
http://www.microcapital.org/microcapital-brief-mftransparency-releases-microloan-pricing-data-for-ghana-zambia-tanzania/

MICROCAPITAL BRIEF: MFTransparency Releases Microloan Pricing Report on Ethiopia’s Microfinance Industry
http://www.microcapital.org/microcapital-brief-mftransparency-releases-microloan-pricing-report-on-ethiopias-microfinance-industry/

MICROCAPITAL BRIEF: Ethiopia’s Wasasa Microfinance, Poverty Eradication and Community Empowerment (PEACE), Metemamen, Harbu, Digaf Microfinance Submit Pricing Data to MFTransparency
http://www.microcapital.org/microcapital-brief-ethiopia%E2%80%99s-wasasa-microfinance-poverty-eradication-and-community-empowerment-peace-metemamen-harbu-digaf-microfinance-submit-pricing-data-to-mftransparency/

MICROCAPITAL BRIEF: MFTransparency, Mozambican Association of Microfinance Operators (AMOMIF) Launch Transparent Pricing Initiative in Mozambique
http://www.microcapital.org/microcapital-brief-mftransparency-mozambican-association-of-microfinance-operators-amomif-launch-transparent-pricing-initiative-in-mozambique/

MICROCAPITAL BRIEF: MFTransparency Announces First Microfinance Data Submissions for Ghana Transparent Pricing Initiative
http://www.microcapital.org/microcapital-brief-mftransparency-announces-first-microfinance-data-submissions-for-ghana-transparent-pricing-initiative/

MicroCapital Universe Profile: MFTransparency,
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MFTransparency

MicroCapital Universe Profile: MasterCard Foundation, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MasterCard+Foundation

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

MICROCAPITAL BRIEF: European Sustainable Investment Forum’s (EUROSIF’s) European SRI Transparency Code Attracts 350 Signatories

Charlotte Newman — Mon, 06 Feb 2012 17:41:15 +0000

The European SRI Transparency Code, a document outlining guidelines for maintaining the transparency of socially responsible investing (SRI), has attracted approximately 350 signatories. The code was established in 2004 by the European Sustainable Investment Forum (EUROSIF), a France-based network that focuses on raising accountability to investors and stakeholders of retail SRI funds, with the aim of increasing the sustainability of financial markets. An SRI fund is one that intends to generate both financial return and social good.

Signatories to the code commit to submitting clear, informative and detailed information that is updated annually and easily accessible on their websites. Financial information must be reported using the same currency as the fund uses for other reporting purposes. If a signatory cannot report certain information, it agrees to state why this is the case. The code also lays out guidelines for reporting efforts related to environmental, social and governance (ESG) issues, evaluation, implementation and voting policy.

Signatories to the European SRI Transparency Code that have connections to microfinance investing include Allianz Global Investors, AXA Investment Managers, BNP Paribas Investment Partners, Dexia Asset Management, HSBC Global Asset Management, Oppenheim Asset Management Services SARL, SNS Asset Management and Triodos Bank. As of January 2012 there are 350 signatories to the code.

About Eurosif
Eurosif is a France-based pan-European network established in 2001 to serve as an umbrella association covering “socially responsible” investment issues in Europe. It is a partnership of the European Union’s “Sustainable Investment Forums” from France, Germany, Italy, the Netherlands, the United Kingdom, Belgium, Spain and Sweden. Eurosif is comprised of 76 member affiliates, which represent institutional investors, financial service providers, academic institutes, trade unions and nongovernmental organizations. Eurosif’s four main objectives are lobbying in the EU, conducting research, providing events and communications and expanding the European network.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

European Fund for Southeast Europe: “Press Release- EFSE Signs European SRI Transparency Guidelines,” http://www.efse.lu/Details—2012-01-25-EFSE-signs-European-SRI-Transparency-Code——_nav._siteid.134_entryid.397_dir._likecms.html

EUROSIF: “European SRI Transparency Code,” http://www.eurosif.org/sri-resources/sri-transparency-code/

EUROSIF: “European SRI Transparency Code Version 2,” http://www.eurosif.org/images/stories/pdf/european_sri_transparency_code.pdf

MicroCapital.org story, April 13, 2011, “MICROCAPITAL BRIEF: ‘Principles for Investors in Inclusive Finance’ (PIIF) Created as Separate Work Stream Within United Nations’ Principles for Responsible Investment (PRI); CGAP (Consultative Group to Assist the Poor), Global Impact Investing Network (GIIN) Standards Observed,” http://www.microcapital.org/microcapital-brief-%E2%80%9Cprinciples-for-investors-in-inclusive-finance%E2%80%9D-piif-created-as-separate-work-stream-within-united-nations%E2%80%99-principles-for-responsible-investment-pri-c/

MicroCapital Universe Profile: Eurosif
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Sustainable+Investment+Forum+%28Eurosif%29

MicroCapital Universe Profile: Allianz
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Allianz

MicroCapital Universe Profile: BNP Paribas
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BNP+Paribas

MicroCapital Universe Profile: Dexia
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Dexia+Microcredit+Fund+%28DMCF%29

MicroCapital Universe Profile: SNS Asset Management
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SNS+Asset+Management

MicroCapital Universe Profile: Triodos
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Triodos+Investment+Management

MicroCapital Universe Profile: European Fund for Southeast Europe
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Fund+for+Southeast+Europe+%28EFSE%29

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

MICROCAPITAL BRIEF: Credit Bureau Cambodia Launched to Facilitate Information Sharing Among Banks, Microfinance Institutions

Nisha Koul — Thu, 02 Feb 2012 08:30:27 +0000

The Association of Banks in Cambodia (ABC) and the Cambodian Microfinance Association (CMA), two trade associations with a combined membership of 64 financial institutions, have formed a joint venture with New Zealand-based credit bureau developer Veda Advantage to launch the Credit Bureau (Cambodia) Company Limited (CBC), which will maintain a database of credit information intended to help banks and microfinance institutions (MFIs) in making “accurate loan decisions based on borrower’s positive and negative credit history” [1]. The bureau expects to benefit borrowers with faster processing times, lower interest rates for those with positive credit histories and protection from over-indebtedness. The credit bureau has been in the planning stages since 2008 and was originally envisioned to be launched in 2010.

Under an existing law intended to facilitate credit reporting and information sharing among banks and MFIs, a code of conduct has been developed that outlines what information banks and MFIs must share with CBC and enumerating the rights of consumers to ensure that all credit data is accurate. CBC estimates that the first consolidated credit reports will be available to member institutions in February.

By Nisha Koul, Research Associate

About Association of Banks in Cambodia (ABC): The Association of Banks in Cambodia (ABC) was formed in 1994 to represent Cambodia’s private banking sector. According to its website, as of January 30, 2012, ABC’s membership includes 29 commercial banks, 7 specialized banks and the members of the Cambodia Microfinance Association (CMA).

About Cambodian Microfinance Association (CMA): The Cambodian Microfinance Association (CMA) is a nongovernmental organization (NGO) that was established in 2004 by seven microfinance institutions (MFIs). According to its website, as of January 30, 2012, CMA has 28 active members. Its main function is to strengthen communication between MFIs and other groups such as government authorities, donors, creditors and investors.

About Veda Advantage: Veda Advantage is a private company that provides business solutions, data analytics and risk management tools for individuals and companies. Veda Advantage was established in New Zealand in 1967 and provides credit-related services, focusing on the development of credit bureaus. Through its international division, Veda Advantage has supported credit bureaus in Cambodia, New Zealand, Saudi Arabia, Singapore and Malaysia. Financial information on Veda Advantage is not currently available.

About National Bank of Cambodia (NBC): Established in 1954, the National Bank of Cambodia (NBC) is the country’s central bank. Among its functions, the NBC establishes and monitors the country’s monetary policy, supervises and regulates the financial sector and issues currency.

Sources and Additional Resources:

[1] Credit Bureau Cambodia, News, “New Credit Bureau to make Cambodia more competitive,” http://www.creditbureaucambodia.com/cambodian-credit-news/new-credit-bureau-to-make-cambodia-more-competitive.html

MicroCapital.org story, May 10, 2011, “MICROCAPITAL BRIEF: National Bank of Cambodia (NBC), Supported by International Finance Corporation (IFC), Targets Multiple Borrowing by Microfinance Clients, Expects to Launch National Credit Bureau in 2011,” http://www.microcapital.org/microcapital-brief-national-bank-of-cambodia-nbc-supported-by-international-finance-corporation-ifc-targets-multiple-borrowing-by-microfinance-clients-expects-to-launch-national-credit-bureau-2/

MicroCapital.org story, May 27, 2011, “MICROCAPITAL BRIEF: Microfinance in Cambodia Grows 10%, Described as “Trap,” http://www.microcapital.org/microcapital-brief-microfinance-in-cambodia-grows-10-described-as-%E2%80%9Ctrap%E2%80%9D/

MicroCapital.org story, October 27, 2008, “MICROCAPITAL STORY: Cambodian Credit Bureau To Be Launched for Regulating Banking and Microfinance,” http://www.microcapital.org/microcapital-storycambodian-credit-bureau-to-be-launched-for-regulating-banking-and-microfinance/

MicroCapital Universe Profile: Association of Banks in Cambodia (ABC), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Association+of+Banks+in+Cambodia+%28ABC%29

MicroCapital Universe Profile: Cambodian Microfinance Association (CMA), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Cambodian+Microfinance+Association+%28CMA%29

MicroCapital Universe Profile: Veda Advantage, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Veda+Advantage

MicroCapital Universe Profile: National Bank of Cambodia (NBC), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Bank+of+Cambodia+%28NBC%29

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

MICROCAPITAL BRIEF: Development Seed, Key2Flex Offer Geospatial Technology Services to Analyze Availability of Financial Services in Developing Countries

Natalie Baer — Tue, 31 Jan 2012 16:34:54 +0000

Geospatial mapping is being used to show the geographic distribution of banks, automated teller machines (ATMs) and banking agents in relation to low-income and other population groups, thus giving an indication of the accessibility of financial services to those groups. Improvements in geospatial mapping technology, global positioning system (GPS) receivers and geographic information system (GIS) software combined with the increasing availability of spatial and population data allow for the mapping and analysis of a country’s “financial landscape” for about USD 100,000 [1].

The US-based Microfinance Information Exchange, US-based data visualization company Development Seed and the Canada-based MasterCard Foundation have partnered to map microfinance data in Nigeria. In the Philippines, the People’s Credit and Finance Corporation (PCFC), a governmental microfinance organization, has partnered with Philippines-based Key2Flex to use GIS software to analyze microfinance information.

By Natalie Baer, Research Associate

About the Microfinance Information Exchange (MIX): The Microfinance Information Exchange (MIX) is a US-based nonprofit provider of performance data and analysis on microfinance institutions (MFIs), funders, networks and service providers dedicated to serving the financial needs of low-income clients. The mission of MIX is to strengthen the microfinance sector and financial inclusion in general by promoting transparency. The organization’s MIX Market website offers access to financial and social performance information covering approximately 2,000 MFIs. MIX publications include the MicroBanking Bulletin and MIX Microfinance World, which feature periodic research and data analysis. Incorporated in 2002, MIX is headquartered in Washington, DC, with regional offices in Azerbaijan, India, Morocco and Peru. Its supporters include the Bill & Melinda Gates Foundation, CGAP (Consultative Group to Assist the Poor), Omidyar Network, The MasterCard Foundation, the UN’s International Fund for Agricultural Development, the Michael & Susan Dell Foundation, Citi Foundation, Ford Foundation and Deutsche Bank.

About the MasterCard Foundation: Based in Canada, the MasterCard Foundation is a private foundation with the goal of enabling people living in poverty to improve their lives with increased access to microfinance and education. The foundation was established in 2006 by a gift of shares from global payment processor MasterCard Worldwide during the company’s initial public offering. As of 2010, the MasterCard Foundation reported approximately CAD 3 billion (the equivalent of USD 2.9 billion) in assets.

About the People’s Credit and Finance Corporation: The People’s Credit and Finance Corporation (PCFC) is a government-owned finance company based in Manila, Philippines. Its sole focus is microfinance, and it is mandated by the government to provide financial services to the poor through retail microfinance institutions. As of December 31, 2010, the PCFC had total assets of PHP 3.78 billion (USD 88.2 million).

Sources and Resources:

[1] Geospatial Analysis for Financial Inclusion Tracking
http://mmublog.org/blog/geospatial-analysis-for-financial-inclusion-tracking/

Mapping Nigerian Microfinance Banks
http://www.themix.org/publications/mix-microfinance-world/2011/08/mapping-nigerian-microfinance-banks

Philippines’ PCFC to develop Microfinance Geographic Information System
http://www.microfinancefocus.com/news/2010/05/25/philippines%E2%80%99-pcfc-to-develop-microfinance-geographic-information-system/

MicroCapital Universe Profile: Microcapital Universe: Microfinance Information Exchange (MIX) http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Information+Exchange+%28MIX%29

MicroCapital Universe Profile: MasterCard Foundation
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MasterCard+Foundation

MicroCapital Universe Profile: People’s Credit and Finance Corporation
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=People%27s+Credit+and+Finance+Corporation+%28PCFC%29

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

MICROCAPITAL BRIEF: MFTransparency Releases Microloan Pricing Data for Ghana, Zambia, Tanzania

Natalie Baer — Fri, 27 Jan 2012 21:12:14 +0000

On January 27, 2012, as part of its Transparent Pricing Initiatives, US-based NGO MFTransparency released microloan pricing data from Ghana, Zambia and Tanzania. As part of this launch, webinars are available on pricing dynamics in these microfinance markets and regarding the transparent communication of prices to clients [1].

The Transparent Pricing Intiatives are part of a larger MFTransparency project funded by Canada’s MasterCard Foundation and known as the enabling Africa to Price Responsibly & Educate on Interest Rates (enabling APR & EIR) program [1] [2]. Since 2010, the project has endeavored to improve the microloan markets in Malawi, Uganda, Rwanda, South Africa, Ghana, Tanzania, Zambia and Mozambique by publishing comparable data on the interest and fees charged on microfinance loans. Additionally the program includes training seminars, technical assistance and the production of educational materials. As of January 2012, MFTransparency has collected data from 30 countries on four continents, including 17 countries in Sub-Saharan Africa [1].

By Natalie Baer, Research Associate

About MFTransparency: MFTransparency is a US-based nongovernmental organization (NGO) that was launched in July 2008 to provide information on microcredit products and their prices. MFTransparency collects data on the interest and fees charged on microfinance loan products in order to calculate and publicize the effective interest rates charged on those loans. According to its website, 889 industry stakeholders have endorsed its efforts as of 2011. As of January 2012, MFTransparency has collected data from 30 countries on four continents, including 17 countries in Sub-Saharan Africa.

Sources and Resources:

[1] MFTransparency Press Release, “Launch of Ghana, Zambia and Tanzania Pricing Data by MFTransparency.”

[2] Enabling Africa to Price Responsibly & Educate on Interest Rates, http://www.mftransparency.org/pages/enabling-africa-to-price-responsibly-educate-on-interest-rates/

MICROCAPITAL BRIEF: Ethiopia’s Wasasa Microfinance, Poverty Eradication and Community Empowerment (PEACE), Metemamen, Harbu, Digaf Microfinance Submit Pricing Data to MFTransparency
http://www.microcapital.org/microcapital-brief-ethiopia%E2%80%99s-wasasa-microfinance-poverty-eradication-and-community-empowerment-peace-metemamen-harbu-digaf-microfinance-submit-pricing-data-to-mftransparency/

MICROCAPITAL BRIEF: MFTransparency, Association of Ethiopian Microfinance Institutions (AEMFI) to Launch “Transparent Pricing Initiative in Ethiopia” with Funding from MicroNed
http://www.microcapital.org/microcapital-brief-mftransparency-association-of-ethiopian-microfinance-institutions-aemfi-to-launch-%E2%80%9Ctransparent-pricing-initiative-in-ethiopia%E2%80%9D-with-funding-from-microned/

MICROCAPITAL BRIEF: MFTransparency, Mozambican Association of Microfinance Operators (AMOMIF) Launch Transparent Pricing Initiative in Mozambique
http://www.microcapital.org/microcapital-brief-mftransparency-mozambican-association-of-microfinance-operators-amomif-launch-transparent-pricing-initiative-in-mozambique/

MICROCAPITAL BRIEF: MFTransparency Announces First Microfinance Data Submissions for Ghana Transparent Pricing Initiative
http://www.microcapital.org/microcapital-brief-mftransparency-announces-first-microfinance-data-submissions-for-ghana-transparent-pricing-initiative/

MicroCapital Universe Profile: MFTransparency,
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MFTransparency

MicroCapital Universe Profile: MasterCard Foundation, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MasterCard+Foundation

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

MICROCAPITAL BRIEF: Microfinance CEO Working Group Issues Road Map for Microfinance Industry Promoting Smart Campaign, Microfinance Transparency, Social Performance Task Force

Charlotte Newman — Thu, 26 Jan 2012 16:42:26 +0000

A group of eight CEOs of nonprofit microfinance organizations has issued a “Road Map for the Microfinance Industry: Focusing on Responsible and Client-Centered Microfinance.” The road map suggests that the industry improve its standards of responsibility to clients through “principles and procedures that ensure ethical, transparent business and client safety.” It also recommends that the microfinance industry create measurable social and economic value for its clients by offering a range of services based on client needs. The report further highlights the support of the signatories for three US-based initiatives: the Smart Campaign, which aims to protect the interests of microfinance clients; MicroFinance Transparency, a nongovernmental organization working to increase the transparency of MFI pricing; and the Social Performance Task Force, group founded by CGAP (Consultative Group to Assist the Poor) that works to promote social values in microfinance [2].

The CEOs signing the letter represent UK-based VisionFund International and the following US-based nonprofit organizations: ACCION International, FINCA International, Freedom from Hunger, Grameen Foundation USA, Opportunity International, Pro Mujer and Women’s World Banking. At the moment, the Center for Financial Inclusion at ACCION International is the secretariat for the Working Group [1]. The Center for Financial Inclusion also hosts the Smart Campaign.

The Working Group members ask their fellow microfinance stakeholders to join them in supporting the three campaigns, putting their principles into action and working to develop improved ways to provide services to poor people.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

[1] The Center for Financial Inclusion Blog: “Microfinance CEOs Unite on Road Map to Responsible Microfinance,” http://centerforfinancialinclusionblog.wordpress.com/2012/01/18/microfinance-ceos-unite-on-road-map-to-responsible-microfinance/

[2] “Road Map for the Microfinance Industry: Focusing on Responsible and Client-Centered Microfinance,” http://centerforfinancialinclusionblog.files.wordpress.com/2012/01/microfinance-ceo-working-group-road-map_120118_final.pdf

MicroCapital Universe Profile: ACCION International
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACCION+International

MicroCapital Universe Profile: FINCA International
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FINCA+International

MicroCapital Universe Profile: Freedom from Hunger
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=freedom+from+hunger#Description_140_word_limit_

MicroCapital Universe Profile: Grameen Foundation
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen+Foundation

MicroCapital Universe Profile: Opportunity International
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Opportunity+International

MicroCapital Universe Profile: Pro Mujer http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Pro+Mujer

MicroCapital Universe Profile: VisionFund International http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=VisionFund+International

MicroCapital Universe Profile: Women’s World Banking
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Women%27s+World+Banking+%28WWB%29

MicroCapital Universe Profile: Smart Campaign
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SMART+Campaign

MicroCapital Universe Profile: Microfinance Transparency
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Transparency

MicroCapital Universe Profile: Social Performance Task Force
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Social+Performance+Task+Force

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/

MICROCAPITAL BRIEF: K-Rep Bank of Kenya Spends $600k on Temenos IT System to Integrate Branch Data

Natalie Baer — Thu, 26 Jan 2012 04:14:13 +0000

K-Rep Bank, a Kenyan commercial bank focused on providing services to poor people, has spent an estimated KES 50 million (USD 582,000) to upgrade to a software system from Switzerland’s Temenos called “T24 for Microfinance and Community Banking” [1]. The upgraded system integrates all K-Rep branches, whereas each branch operated as a separate entity previously. In addition, the bank will be able to offer customers improved loan statements, transaction records and mobile banking services, such as integration of customer accounts with customer mobile phones [1]. Details on the upgrade of mobile services are unavailable. According to the US-based NGO Microfinance Information Exchange, K-Rep Bank had a gross loan portfolio of USD 74.2 million, USD 95.0 million in assets, 0.68% ROA, 4.42% ROE, and 65,073 active borrowers in 2010.

By Natalie Baer, Research Associate

About K-Rep Bank: K-Rep Bank is a commercial bank based in Kenya that focuses primarily on the microfinance sector. It was founded in 1999 by K-Rep Group Limited, a Kenyan microfinance enterprise established in 1984. Its products and services include microfinance loans, business loans, savings accounts and money transfer services. According to the US-based NGO Microfinance Information Exchange, K-Rep Bank had a gross loan portfolio of USD 74.2 million, USD 95.0 million in assets, 0.68% ROA, 4.42% ROE, and 65,073 active borrowers in 2010.

About Temenos: Founded in 1993 and listed on the Swiss Stock Exchange, Temenos provides banking systems for retail banking, corporate and correspondent banking, universal banking, private wealth management, Islamic banking, and microfinance and community banking. As of July 2011, Temenos works with approximately 1,000 financial institutions in 125 countries. For the year ending December 31, 2010, Temenos reported total assets of 984 million and net income of USD 37 million. T24 for Microfinance and Community Banking (T24 for MCB) has been at deployed at 117 microfinance and community banking sites in 41 countries. Based on T24 Software for traditional banking, T24 for MCB comprises: group lending, exception-based payments, contract-based and account-based lending, flat-rate lending methodology, investor funds tracking and credit union functionality.

Source and Resources:

[1] K-Rep Bank is updating its IT system, http://www.businessdailyafrica.com/KRep+steps+up+retail+banking++services+with+IT+system+upgrade+/-/539552/1310448/-/13vqwk5/-/

MicroCapital Universe Profile: Temenos Group AG, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Temenos+Group+AG

MicroCapital Universe Profile: K-Rep Bank, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=K-Rep+Bank

Browse the MicroCapital Universe and add your entry to the wiki at: http://www.microcapital.org/microfinanceuniverse/

MICROCAPITAL BRIEF: Microfinance Investment Vehicle Certification Organization Luxembourg Fund Labelling Agency (LuxFLAG) Accepting Applications for Environment Label

Nisha Koul — Mon, 23 Jan 2012 16:59:39 +0000

The Luxembourg Fund Labelling Agency (LuxFLAG), a microfinance investment vehicle (MIV) and environment-related investment vehicle (EIV) certification organization, has launched a request for applications for the second LuxFLAG Environment Label, which is granted to EIVs in an effort to “reassure investor[s] that labeled investment funds actually invest the majority of their assets in environment-related sectors in a responsible manner” [1]. An investment fund must have a portfolio of investments in environment-related sectors corresponding to at least 75 percent of the fund’s total assets to be eligible for the label [2]. LuxFLAG only certifies MIVs and EIVs that are either subject to European Union member state supervision or located in nations with financial supervision on par with countries in the European Union. As of 2011, 20 MIVs and three EIVs hold current LuxFLAG labels.

The first step in applying for an EIV label is to complete a pre-questionnaire to assess eligibility for the label followed by the application form that is available at: http://www.luxflag.org/documents/criteria_procedures/Application_form_Appendix_3.xls. The application deadline is February 20, 2012. For more information, you may contact LuxFLAG at info at luxflag.org or +352 22 30 261.

By Nisha Koul, Research Associate

About Luxembourg Fund Labeling Agency (LuxFLAG): Established in 2006, the Luxembourg Fund Labeling Agency (LuxFLAG) aims to “promote the raising of capital for Microfinance and Environment related sectors by awarding a recognizable label to eligible microfinance investment vehicles (MIVs) and environment-related investment vehicles (EIVs).” Its objective is to reassure investors that the MIV or EIV actually invests, directly or indirectly, in the microfinance/environment sector. LuxFLAG only certifies MIVs/ EIVs that are either subject to European Union member state supervision or located in nations with financial supervision on par with countries in the European Union. As of 2011, 20 MIVs and three EIVs hold current LuxFLAG labels.

Sources and Additional Resources:

[1] Press release submitted to MicroCapital, January 2012.

[2] LuxFLAG Environment, “Criteria & Procedure,” http://www.luxflag.org/EIV_labelProcedure.htm

MicroCapital.org story, January 13, 2012, “MICROCAPITAL BRIEF: MicroRate, LuxFlag Launch Luminis Looking to Increase Transparency of Microfinance Funds,” http://www.microcapital.org/microcapital-brief-microrate-luxflag-launch-luminis-looking-to-increase-transparency-of-microfinance-funds/

MicroCapital.org story, October 10, 2011, “MICROCAPITAL BRIEF: LuxFLAG Grants Microfinance Label to Microfinance Enhancement Facility, Selectum, Etimos Fund, Dual Return Fund Vision Microfinance Local Currency; Renews Label for Six Other Microfinance Investment Vehicles (MIVs),” http://www.microcapital.org/microcapital-brief-luxflag-grants-microfinance-label-to-microfinance-enhancement-facility-selectum-etimos-fund-dual-return-fund-vision-microfinance-local-currency-renews-label-for-six-other-micro/

MicroCapital Universe Profile: Luxembourg Fund Labeling Agency (LuxFLAG), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=LuxFLAG

Browse the MicroCapital Universe and add your entry to the wiki at http://www.microcapital.org/microfinanceuniverse/