On November 20, CashNetUSA, a Chicago-based short-term online lender, announced that it will begin receiving its non-traditional credit data from the DataX Credit Reporting Agency (DataX), a Las Vegas-based data collection agency for the financial sector. DataX will collect and provide credit information to CashNetUSA on clients seeking micro-loans and other financial services. Although Microcapital typically covers only those newsworthy developments with an international scope, this new relationship between two American firms has been reported because of its potential spillover effects for international microfinance. Continue Reading »

CAPITAL MARKETS AND THE CRISIS Continue Reading »

Source: Mennonite Economic Development Associates (MEDA).
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Source: Live Mint .

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INTERNATIONAL SYMPOSIUM: Microfinance as a Tool for Peacebuilding Continue Reading »

Globe Telecom, the second largest telecommunications company in the Philippines, has announced a partnership with the Consultative Group to Assist the Poor (CGAP) to utilize mobile banking technology in rural poverty stricken provinces. Specifically, Globe Telecom’s wholly owned mobile commerce business, G-XChange Inc. (GXI), intends to use its GCASH service to make it possible for poor people in the low-income rural provinces of Bohol, Surigao and Palawan to access basic financial services. Continue Reading »

The CEO and Managing Director of Sri Lanka’s Hatton National Bank, Rajendra Theagarajah, stated that large populations and microfinance in Asia have provided a “buffer” against the global financial crisis. An article in Sri Lanka’s Daily News reported on a speech Theagarajah gave at the Lanka Business Report-Lanka Business Online CEO Forum, stating that Asia has been able to withstand shocks to the global financial crisis due to a strong banking sector, the market available as a result of large populations, and investing in microfinance instead of focusing on subsidies. Theagarajah highlighted countries such as Cambodia, Indonesia and Bangladesh as having banks which have previously invested in microfinance and as a result have had extremely high profit margins. The banks to which he was referring were not identified, nor the role played by microfinance in any profit increases. He also stated that banks in Asia have adopted measures since the 1997 Asian Financial Crisis that are further protecting them from feeling strong negative impacts of the current crisis. Continue Reading »

Source: Thai PR.
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Cygma, the new microfinance foreign exchange (FX) risk management group, believes that the current financial situation is driving people in the microfinance industry to use foreign currency hedging facilities. The organisation will be launching its FX hedging products for illiquid and difficult-to-hedge emerging markets currencies in the first quarter of next year. These will be executed directly by the firm without reliance on third parties, supported by its USD 50 million capital reserve fund. Continue Reading »

Two stories on how the global financial crisis will impact microfinance were released this week, by Reuters and the World Bank. These reports are only the latest in a slew of reports and analyses on how microfinance will be impacted by the credit crisis, ranging from extremely cautious pessimism to undaunted optimism. While these new reports remain mostly speculative, with little documented evidence of actual changes, they offer fresh insights by experts in the microfinance industry into whether any impacts have been experienced a few months into the credit crisis. As there have been a myriad of articles on the topic, this article highlights the unique or new information addressed in the two reports, with a list of past articles on the topic listed in the Additional Reading section below for further information. Continue Reading »

Written by Gilberto M. Llanto and Ryu Fukui and based on secondary research carried out by the authors, released in July 2003 by the Philippine Institute for Development Studies as Discussion Paper No. 2003-11, 18 pages, available on November 16, 2008 at: http://econpapers.repec.org/paper/phddpaper/dp_5F2003-11.htm

Gilberto M. Llanto and Ryu Fukui describe the “emerging innovations” in microfinance observed through 2003 in Southeast Asian markets, innovations that made it possible for microfinance institutions (MFIs) to reach a greater number of poor households in a sustainable manner.  These innovations help reduce MFIs’ transaction costs and risks and enabled poor households to smooth their investment and consumption patterns.  While the paper also argues for government support of microfinance (p. 13-14), the rest of this paper wrap-up summarizes the nature and extent to which these three innovations have strengthened Southeast Asian microfinance. Continue Reading »

Source: Investment News.

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ClassifEye, a developer of secure fingerprint authentication technology, announced that Cashpor India, an Indian microfinance institution (MFI), has adopted ClassifEye’s camera-phone-based transactions and authentication solution. Casphor hopes to broaden its customer base and allow their agent-serviced customers to improve their financial reach. Cashpor India is piloting the service in parts of Uttar Pradesh and Bihar. Continue Reading »

NOVEMBER 18 TO NOVEMBER 20, 2008, INTERNET FORUM BY MICROLINKS

Over the course of three days, MicroLinks will host a “Speaker’s Corner” entitled “Microfinance and Climate Change: Can Microfinance Institutions (MFIs) Promote Environmental Sustainability?”  Speaker’s Corner events are online conferences or forums for the purpose of engaging current microenterprise and microfinance issues.  This forum will be hosted by Dan Lundmark, a documentary producer and director currently working on a film highlighting the environmental policies and impacts of MFIs and microenterprises in Latin America, Africa, and Asia.  Several panelists will join the forum from GreenMicrofinance: Joan Hall, Elizabeth Israel, Thomas Israel, Kathleen Robbins, Betsy Teutsch, and Bela Vora.  Panelists from Indian MFIs will include Manab Chakraborty from MIMO Finance, Paul Moonjely from Wesco Credit, and Paul Thomas from the Evangelical Social Action Forum (ESAF). Continue Reading »

NOVEMBER 18 TO 20, 2008, INTERNET CONFERENCE HOSTED BY CGAP

The Consultative Group to Assist the Poor (CGAP) will host a three-day virtual conference entitled “The Financial Crisis and Microfinance: Experience, Insights, and Implications.”  CGAP hopes that virtual participants will share their experiences and insights on the financial crisis and its effects on microfinance and the global poor, and that the discussion will involve all types of microfinance players—microfinance institutions (MFIs), clients, and donors and investors.  Continue Reading »

In late October, 35 microfinance institutions (MFIs) and investment funds signed the Client Protection Principles (CPP), a list of pro-consumer principles and mandates that aims to become an industry-wide standard for ensuring the fair treatment and financial protection of low-income microfinance clients.  The CPP are part of a larger campaign launched in September of 2008 at the annual meeting of the Clinton Global Initiative, a conglomeration of governments and public and private organizations dedicated to sustainable development, with the goal of incorporating at least half of the world’s 500 largest MFIs within the next three years. According to Consultative Group to Assist the Poor (CGAP), there is little evidence of client abuse in the microfinance sector.   Continue Reading »

The redesign of regulations, development of innovative business models that promote inclusion, financial literacy, expansion of delivery channels, and lowering of transaction costs were highlighted as key challenges for expanding the inclusivity of the global financial system by the World Economic Forum’s Global Agenda Council On Financial Empowerment. The inaugural Summit on the Global Agenda recently assembled 700 of the world’s leaders from academia, business, government and society to set priorities on key global challenges, the outcomes of which will be integrated in the World Economic Forum Annual Meeting 2009 for further discussion. Continue Reading »

The Islamic Business and Finance Network (IBF Net), a global network of students, researchers, and finance professionals, and its Institute of Microfinance and Development together with Islamic Relief Worldwide, an international development and relief organization, held an international training program and workshop to discuss the nuances of Islamic microfinance was recently held in New Delhi.    The program was attended by over sixty participants from the corporate sector, NGOs, and academics from India, Bangladesh, Sri Lanka and Afghanistan. Continue Reading »