Category: Trends/Challenges

MICROCAPITAL BRIEF: Vodafone Launches M-PAiSA Mobile Money Transfer Service in Fiji

Vodafone, a British multinational mobile network operator, has launched M-PAiSA Mobile Money Transfer service in Fiji. Initially M-PAiSA will act mainly as a vehicle for loan disbursements and repayments from microfinance institutions (MFIs), with customers being able to receive loans and make payments using their mobile phones. Continue reading

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MICROCAPITAL BRIEF: Microloan Default Risk Rises in India as SKS Microfinance Plans Initial Public Offering (IPO)

A trend in initial public offerings (IPOs) by microfinance institutions in India could potentially increase the risk of defaults by microborrowers. SKS Microfinance, an Indian microfinance institution, has recently filed to raise up to USD 250 million in an initial public offering (IPO), as initially reported by MicroCapital on March 9, 2010. This pending IPO is causing concern that an IPO trend in India could trigger a trend in microfinance institutions’ (MFIs’) funding sources, as reported by MicroCapital on June 16, 2010, which could raise the risk of loan defaults by pressuring MFIs to disburse riskier microloans. Continue reading

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MICROCAPITAL BRIEF: Barclays Launches “Banking for Billions” Report on Improving Access to Financial Services and Expanding Microfinance

Barclays, a UK-based international investment bank, has released the second edition in the “Barclays Social Intelligence Series,” which tackles global social and environmental issues and the role of the financial services sector in delivering solutions. “Banking for Billions” examines the current global landscape of financial inclusion, studies recent trends, the impact of the economic downturn and the potential role of new technology delivery models. Continue reading

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MICROCAPITAL BRIEF: International Fund for Agricultural Development (IFAD) Presents Decision Tools for Rural Microfinance

The International Fund for Agricultural Development (IFAD), an agency of the United Nations (UN), has released the “IFAD Decision Tools for Rural Finance,” a knowledge management tool designed to help identify and answer questions that arise in rural finance projects. Continue reading

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MICROCAPITAL BRIEF: Andean Development Corporation (CAF) and National Mutual Guarantee Fund for Small and Medium-sized Enterprises (FONPYME) Launch ‘Quality Improvement’ Project for Small and Medium-sized Enterprises in Venezuela

The Andean Development Corporation (CAF), a multilateral financial institution based in Caracas, Venezuela, together with the National Mutual Guarantee Fund for Small- and Medium-sized Enterprises (FONPYME), an organization founded by the Venezuelan government to provide financial and technical assistance to small businesses, has launched a new ‘Quality Improvement’ project within the Venezuelan government’s National Reciprocal Guarantee System (SNGR) to increase the efficiency and quality of management of micro-, small and medium-sized enterprises (MSMEs). Continue reading

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MICROCAPITAL BRIEF: Pro Mujer Wins Second Annual Morgan Stanley Social Enterprise Strategy Challenge

Morgan Stanley, a global financial services firm based in the US, has declared Pro Mujer, a women’s development and microfinance organization that works in Latin America but is headquartered in New York City, as the winner of the second annual Morgan Stanley Social Enterprise Strategy Challenge. The challenge involved 12 New York City-based nonprofits working with teams of Morgan Stanley employees over the course of eight weeks. Continue reading

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MICROCAPITAL BRIEF: Second Annual Unitus-Hewitt Compensation And Benefits Survey of Indian Microfinance Institutions Demonstrates Salary Stability

The Unitus-Hewitt Compensation And Benefits Survey, released in early June, has demonstrated stability in the microfinance industry during the 2009 economic crisis. The study examined cash and non-cash benefits at 15 microfinance institutions (MFIs) representing 10 million clients across India. The study was jointly executed by Unitus Inc., an international nonprofit providing funding and consulting services to MFIs, and Hewitt Associates, an international human resources consulting firm. Continue reading

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MICROCAPITAL BRIEF: Aditya Birla Finance (ABF) Enters Wholesale Microfinance Sector in India

Aditya Birla Finance (ABF), a non-banking financial company (NBFC) in India, has entered into the microfinance sector and has already closed a bulk financing deal with an unnamed Hyderabad-based microfinance institution (MFI). ABF is currently looking to form financing partnerships with other MFIs throughout the country. Continue reading

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MICROCAPITAL BRIEF: India: Microfinance Industry Predicts $30b in Loan Portfolio and 110m Clients By 2014

In a report from Intellecap, a social sector advisory firm, it is predicted that the Indian microfinance industry will achieve a portfolio of 110 million borrowers and INR 135,000 crore (USD 30 billion) by 2014.

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MICROCAPITAL BRIEF: Bank Respublika, a Private Commercial Bank in Azerbaijan, Reduces Interest Rates to Expand Lending for Small and Medium-Sized Enterprises

Bank Respublika, a private commercial bank in Azerbaijan, has reduced interest rates in order to increase lending flow for small and medium-sized enterprises. According to an unnamed bank official, “High levels of liquidity allow the bank to offer the above loan products on unrestricted long-term basis to entities engaged in entrepreneurial activity.” As of April 1, 2010, Bank Respublika held total capital of approximately AZN 56.1 million (USD 9.7 million) and total assets of AZN 334.5 million (USD 415.5 million). Continue reading

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MICROCAPITAL BRIEF: Bai Tushum & Partners and Mol Bulak, Two Microfinance Organizations, Launch Revival Foundation for Devastated Regions of Kyrgyzstan

Bai Tushum & Partners and Mol Bulak, two microfinance organizations from Kyrgyzstan, along with the domestic law firm Kalikova & Associates, have established the ‘Revival Foundation’ to provide financial assistance to the southern regions of Kyrgyzstan affected by the recent riots. The foundation will serve residents of the cities of Osh and Jalabad and surrounding areas with financial aid and interest-free loans. Continue reading

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MICROCAPITAL BRIEF: Small Enterprise Education and Promotion (SEEP) Network Asks for Feedback on Reporting Standards

The Small Enterprise Education and Promotion (SEEP) Network, an international organization with the goal of connecting microenterprise practitioners, is calling on the microfinance community to contribute to the update of the SEEP Framework, a guide for measuring the financial performance of microfinance institutions (MFIs). Continue reading

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MICROCAPITAL BRIEF: Two Thirds of Philippine Households Lack Bank Accounts, Says Central Bank Official

Two thirds of Philippine households, an estimated 11 million, do not have bank accounts, according to Mr Amando Tetangco, the Governor of Bangko Sentral ng Pilipinas (BSP), the central bank of the Republic of the Philippines. Continue reading

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MICROCAPITAL BRIEF: National Bank for Agriculture and Rural Development (NABARD) Plans to Open Rural Credit Bureaus in India

The National Bank for Agriculture and Rural Development (NABARD), a development bank in India that promotes sustainable agriculture and rural development through credit support, institution building and other related services, plans to set up rural credit bureaus in rural districts throughout the country. According to Dr K.G. Karmakar, the managing director of NABARD, “Once implemented, [the credit bureaus] will go a long way in improving the financial position of India’s 480 million marginal farmers.” The proposed bureaus would maintain information on all rural borrowers in order to facilitate credit and information disbursement. Continue reading

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MICROCAPITAL BRIEF: India’s SKS Microfinance IPO Could Trigger Trend in Microlending

SKS Microfinance has recently filed to raise up to USD 250 million in an initial public offering (IPO), as initially reported by MicroCapital on March 9, 2010. The pending IPO, to be offered on the Bombay Stock Exchange and the National Stock Exchange of India, would be the first public offering for an Indian microlender and is resulting in debate about the future of funding microfinance institutions. Continue reading

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MICROCAPITAL BRIEF: Bhagwan Chowdhry Proposes Microequity as a New Financing Model for Microfinance

A recent article written by Bhagwan Chowdhry, Professor of Finance and Faculty Director at UCLA Anderson School of Management, explores traditional microlending contracts and considers microequity as an alternative method of providing microfinancing. Continue reading

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MICROCAPITAL PAPER WRAP-UP: Microcredit as a Variant Form of Sub-Prime Lending by John D. Conroy for the Foundation for Development Cooperation (FDC)

By John D. Conroy, published by the Foundation for Development Cooperation (FDC), May 2010, 4 pages, available at: http://www.fdc.org.au/files/Resources/briefing-note/Briefing%20Note%20No%2010%20-%20Final%20%28e-version%29.pdf

In this FDC Briefing Note, the author draws parallels between the worldwide development of subprime lending and microcredit over the last decade. The theme of inadequate capacity for deposits and other forms of saving through microfinance institutions (MFIs) also runs through the author’s arguments. Continue reading

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MICROCAPITAL BRIEF: KfW Entwicklungsbank (KfW) and Norwegian Microfinance Initiative (NMI) Commit Total of $11.6m to Goodwell West Africa to be Invested in Microfinance Sector in Ghana and Nigeria

Goodwell West Africa, a branch of Goodwell Investments, a business development company based in the Netherlands, has received commitments of EUR 8 million (USD 9.7 million) from KfW Entwicklungsbank (KfW), a German development bank, and EUR 1.6 million (USD 1.9 million) from Norwegian Microfinance Initiative (NMI), a strategic partnership between the Norwegian public and private sectors that invests in and provides support for microfinance institutions (MFIs) in developing countries. The funds will be invested in established MFIs as well as emerging MFIs in Ghana and Nigeria. Continue reading

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