Category: Trends/Challenges

MICROCAPITAL BRIEF: More Details Emerge After Examination of Microfinance Institutions (MFIs) by Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC)

Following growing complaints of fraudulent practices leveled against several microfinance institutions (MFIs) and the failure some, the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) conducted an examination of the sector, which has revealed some irregularities and unethical practices. Continue reading

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MICROFINANCE PAPER WRAP-UP: The State of Iraq’s Microfinance Industry by The Louis Berger Group Incorporated, Produced for the US Agency for International Development (USAID)

By The Louis Berger Group Incorporated, produced for the US Agency for International Development (USAID), June 2010, 56 pages, available at: http://www.imfi.org/files/StateOfIMFI_USAID_en.pdf

The authors of this paper report that Iraq’s microfinance industry was established in 2003 and is now comprised of 14 microfinance institutions (MFIs) spread out over Iraq’s 18 provinces. Continue reading

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MICROCAPITAL BRIEF: Upcoming Initial Public Offering (IPO) of SKS Microfinance Rated as Grade 4/5 By Credit Analysis and Research Limited (CARE Ratings)

Credit Analysis and Research Limited (CARE Ratings), a rating company based in Mumbai, India, has rated the upcoming initial public offering (IPO) of SKS Microfinance, a microfinance institution (MFI) that caters to women in India, as Grade 4/5, which indicates ‘above average fundamentals.’ The grading system takes into account the company’s financial position including asset quality, capital adequacy ratio, liquidity position and access to diverse sources of institutional funding; recent industry growth; prospects for future growth; and good corporate governance practices. As reported by MicroCapital, SKS Microfinance announced its intentions to sell shares as part of a USD 250 million IPO from July 28 to July 30. Continue reading

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MICROCAPITAL BRIEF: PesaPot and RedCloud Partner to Bring Mobile Technology Platform to Microfinance Institutions (MFIs) in Kenya

PesaPot – a technology company headquartered in Nairobi, Kenya – has announced a partnership with RedCloud – a technology platform that offers access to financial services over the internet – to provide mobile technology to the microfinance sector in Kenya. The alliance will provide microfinance institutions (MFIs) with technology that is intended to both improve the efficiency of their operations as well as reduce costs. Continue reading

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MICROCAPITAL BRIEF: United Nations Environment Programme (UNEP) Invests $1.8m in Solar Panels in Nepal, to be Distributed via Microloans Disbursed by Ace Development Bank, Provider of Microfinance and Traditional Banking Services

The United Nations Environment Programme (UNEP), a division of the United Nations (UN) focused on protecting natural resources, will invest USD 1.8 million to increase the use of solar power in Nepal through its Sustainable Energy Finance Initiative (SEFI). The funds will be distributed via microloans disbursed by Ace Development Bank, a financial services provider in Nepal established in 1995. Continue reading

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MICROCAPITAL BRIEF: Clinton Bush Haiti Fund (CBHF) Announces $1m in New Grants to Promote Economic Opportunities Including Microfinance

The Clinton Bush Haiti Fund (CBHF), a nonprofit organization created by former US presidents Bill Clinton and George W. Bush to rebuild Haiti following the January 12 earthquake, has announced USD 1 million in new grants aimed at creating new jobs and promoting economic opportunity, including microfinance. An unspecified proportion of the grant will be used to finance the Haiti Emergency Liquidity Program (HELP), which will give recovery grants to “key” microfinance institutions (MFIs), which are defined as those having approximately 50,000 clients or more. Continue reading

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MICROCAPITAL BRIEF: Dr Sanjay Sinha of M-CRIL Takes Issue with CGAP (Consultative Group to Assist the Poor)

Dr Sanjay Sinha, managing director at Micro-Credit Ratings International (M-CRIL), authored an article featured in Microfinance Focus in which he proposed changes to several of the ideas advocated by CGAP (Consultative Group to Assist the Poor), an independent policy and research center housed at the World Bank Group. Continue reading

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MICROCAPITAL BRIEF: Microcredit Summit Campaign Issues Call for Institutional Action Plans (IAPs) to be Presented at 2011 Global Microcredit Summit

The Microcredit Summit Campaign, a project initiated in 1997 by the RESULTS Educational Fund, a US-based advocacy organization that aims to alleviate hunger and poverty, is requesting that each of its member institutions submit an Institutional Action Plan (IAP). Continue reading

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MICROCAPITAL BRIEF: Mr Vijay Mahajan, President of Microfinance Institutions Network (MFIN) and Chairman of CGAP (Consultative Group to Assist the Poor), Argues Banks Should Charge Microfinance Institutions Less than 10%

In a recent interview featured on LiveMint, an Indian business newspaper owned by the Wall Street Journal, Mr Vijay Mahajan, President of the Microfinance Institutions Network (MFIN), a network of 39 microfinance institutions (MFIs) in India, argued that “banks should charge less than 10 percent while lending to MFIs.” Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) Supports Small and Medium-sized Enterprise Growth in Belarus by Providing $5m Loan To and Purchasing 19.9 Percent Equity of Belarusky Narodny Bank

The International Finance Corporation (IFC), a member of the World Bank Group, is supporting Belarusky Narodny Bank, a commercial bank in Belarus that focus on financing small and medium-sized enterprises (SMEs), by providing it with a USD 5 million loan and purchasing 19.9 percent of the bank’s equity from the Bank of Georgia, a private commercial bank, for an undisclosed sum. The Bank of Georgia will retain 79.99 percent of the shares of Belarusky Narodny. Continue reading

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MICROCAPITAL EVENT: Social Capital Markets 2010 (SOCAP10): At the Intersection of Money and Meaning on October 4 – October 6, 2010 in San Francisco, California, USA

Event Name: Social Capital Markets 2010 (SOCAP10): At the Intersection of Money and Meaning

Event Date: October 4 – October 6, 2010

Event Location: Fort Mason Center in San Francisco, California, USA Continue reading

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MICROCAPITAL BRIEF: Ministry of Investment in Egypt Releases Set of New Laws and Amendments for Nonbanking Financial Services Including Microfinance and Services for SMEs

The Ministry of Investment in Egypt has prepared a set of new laws and amendments to develop and modernize nonbanking financial services with a focus on serving small and medium-sized enterprises (SMEs). The ministry has released eight draft laws that deal with “managing business procedures for public and private companies, licensing, mortgage finance, private insurance funds and voluntary pensions companies, healthcare firms, financial leasing and movable property registry.” The new laws will also establish rules and conditions for licensing microfinance companies, as well as companies working in financial leasing. Continue reading

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MICROCAPITAL BRIEF: SKS Microfinance, a Microfinance Institution (MFI) in India, Announces Intentions to Sell Shares From July 28 to July 30

SKS Microfinance, a microfinance institution (MFI) that caters to women in India, plans to sell shares as part of a USD 250 million initial public offering (IPO) from July 28 to July 30. The price range at which the shares will be sold will be announced on July 26. The sale will be managed by Citigroup, a financial services firm based in New York City, USA; Credit Suisse, a financial services firm based in Zurich, Switzerland; and Kotak Mahindra, a financial services group in Mumbai, India [1]. Continue reading

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MICROCAPITAL BRIEF: Dr Youssef Fawaz of Sanabel Warns Syrian Microfinance Institutions (MFIs) of Unsustainable Business Practices at Seventh Annual Microfinance Network of Arab Countries Conference

DayPress news, a Syrian online news publication, recently reported on comments made by Youssef Fawaz, Board Director at Sanabel, a microfinance network of Arab countries, warning Syrian microfinance institutions (MFIs) that past growth rates cannot be replicated unless the industry reevaluates its business practices. At the seventh annual Microfinance Network of Arab Countries Conference in Damascus, Dr Fawaz cited 30-percent annual growth in microcredit in Syria over the past decade, but cautioned, “It is not possible to have sustainable growth without responsible practices, which are characterized by good internal governance and a responsible regulatory framework.” Continue reading

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MICROCAPITAL BRIEF: In Jamaica, Inter-American Development Bank (IDB) Loans $450,000 to Microfinance Institution (MFI), Micro Credit Limited, IDB’s Gerard Johnson Urges Jamaican Government to Avoid Involvement

At a signing ceremony in Jamaica covered by The Gleaner, a Jamaican news publication, the Inter-American Development Bank (IDB) extended a loan of USD 450,000 to the microfinance institution (MFI) Micro Credit Limited. According to the article, Gerard Johnson argued during the ceremony that the Jamaican government is ill-equipped to deal with the financial needs of micro-businesses and often misdirects loans designated for MFIs. “This undermines non-government organizations,” he states. “The problem is access to these loans. The role of government should be to get persons to the point where they qualify for access.” Continue reading

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MICROCAPITAL BRIEF: Social Performance Task Force (SPTF) Annual Meeting Attended by 200 Microfinance Specialists from 50 Countries

The Social Performance Task Force (SPTF), a “global forum of microfinance experts,” held its annual meeting in Bern, Switzerland, from June 29 to July 3, 2010. Continue reading

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MICROCAPITAL BRIEF: KC Chakrabarty, Deputy Governor of Reserve Bank of India, Stresses Importance of Competition Among Microfinance Institutions (MFIs) to Increase Financial Inclusion

The Economic Times, an online business publication, recently interviewed KC Chakrabarty, Deputy Governor of the Reserve Bank of India (RBI), regarding how competition among microfinance institutions (MFIs) may help increase the financial inclusion of poor people. Continue reading

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MICROCAPITAL BRIEF: Axis Bank Extends Financial Services to Rural Areas in India

Axis Bank, a financial services firm based in Mumbai, India, plans to extend “affordable” banking services to 5,500 villages by March 2011 and an additional 6,500 villages by 2015. The bank has started the financial inclusion initiative in villages near Nashik in Maharastra and Darjeeling in West Bengal. According to SK Chakrabarti, the executive director of Axis Bank, the bank is also looking into several low-cost delivery models such as smart card, mobile banking and point of transaction device. Continue reading

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