Category: Trends/Challenges

MICROCAPITAL BRIEF: CGAP Releases Guide for Microfinance Funders “Performance-Based Agreements: Incorporating Performance-Based Elements into Standard Loan and Grant Agreements”

CGAP (Consultative Group to Assist the Poor), an independent policy and research center housed at the World Bank Group, recently published a technical guide entitled “Performance-Based Agreements: Incorporating Performance-Based Elements into Standard Loan and Grant Agreements”. Continue reading

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MICROCAPITAL BRIEF: The United Nations’ Pacific Financial Inclusion Program (PFIP) Releases “Fiji Financial Services Sector Assessment” Calling for Expansion of Microfinance Sector, Especially Through the Development of Accessible Savings Services

The United Nations’ Pacific Financial Inclusion Program (PFIP) has recently released the report “Fiji Financial Services Sector Assessment.” According to the report, About 109,000 households in Fiji do not have access to savings, credit or other financial services [1]. The report highlights that, although the nation has a well-developed financial sector, it primarily caters to the affluent and salaried urban population, and there are missed opportunities for the financial inclusion of more Fiji Islanders, particularly considering Fiji’s favorable infrastructure. Continue reading

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MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Organizes Mandatory Certification Training Program for Operators of Microfinance Institutions (MFIs)

The Central Bank of Nigeria (CBN) has organized a mandatory certification training program for microfinance practitioners. According to Emma Okoidegun, the senior manager of the Development Finance Office of CBN, the objective of the certification program, which was held simultaneously in 24 centers in the country, was to provide guidelines for microfinance operations across the nation. This training program is in response to the deteriorating condition of the microfinance sector in Nigeria. Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Invest $10m in Bancamia, a Microfinance Bank in Colombia

The International Finance Corporation (IFC), a member of the World Bank Group working to alleviate poverty through loan and debt securities, equity investments and guarantees, will invest USD 10 million in Bancamia, a microfinance bank in Colombia [1]. The goal of the investment is to support the expansion of the Colombian microfinance sector, thereby helping to increase access to financial services for microenterpreneurs in the country. Continue reading

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MICROCAPITAL BRIEF: The European Investment Bank, The International Finance Corporation (IFC), KfW Entwicklungsbank, The Belgian Investment Company for Developing Countries (BIO), The Netherlands Development Finance Company (FMO) and Incofin Investment Management Launch Rural Impulse II, a Rural Microfinance Fund

The European Investment Bank, the International Finance Corporation (IFC), KfW Entwicklungsbank, the Belgian Investment Company for Developing Countries (BIO) and the Netherlands Development Finance Company (FMO) have joined together to launch Rural Impulse II, a rural microfinance fund and successor to Rural Impulse Fund I. Several unnamed private banks and investors will also participate. The fund is an initiative of Incofin Investment Management, which has USD 36.2 million in under management and will act as fund advisor. The goal of the fund is to improve access to finance for poor rural communities around the world. Continue reading

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MICROCAPITAL BRIEF: Brazilian Microfinance Sector Poised For Growth Following Annual 22 Percent Increase In Microborrowers since President da Silva’s Election

While the Brazilian microfinance market has seen significant growth since President Inacio Lula da Silva took power in 2002, a recent article estimates the market has reached two percent penetration [1]. Since his election, the number of microborrowers in Brazil has increased from 159,000 to 809,000 with a total of BRL 775.5 million (USD 426 million) in outstanding loans. Growth is expected to continue with increased interest in this market from established banking institutions such as Banco Santander, Unibanco and Banco Real. Continue reading

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MICROCAPITAL BRIEF: Microfinance Project for Low-Income Housing Launched in Tanzania By The Women Advancement Trust (WAT) – Human Settlements Trust, The Financial Sector Deepening Trust (FSDT) and Rooftops Canada

The Women Advancement Trust (WAT) – Human Settlements Trust, a non-governmental organization based in Tanzania, which promotes the advancement of women through education and training; the Financial Sector Deepening Trust (FSDT), a consortium of development partners from Canada, Denmark, the UK, Sweden and the Netherlands; and Rooftops Canada, a nonprofit organization which provides technical expertise and leadership in low-cost housing and human settlements development, have joined together to launch a new housing microfinance program, which will give low-income families in the informal settlement areas around Dar es Salaaam access to interest-free loans. Continue reading

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MICROCAPITAL BRIEF: Sanabel, A Network of Microfinance Institutions in Arab Countries, To Hold its 7th Annual Conference in Damascus, Syria, June 1-3, 2010

Sanabel, a network of microfinance institutions in Arab countries, is holding its seventh annual meeting from June 1 through June 3. The conference, titled “Responsible Growth: Learning from Global Trends and Regional Experiences,” is being held in Damascus, Syria [1]. The conference, which is open to the public, is expected to draw more than 600 people from Arab and other foreign countries as well as a number of international and regional experts. Participants will have the opportunity to learn from panelists and to share individual experience through various lectures and workshops. Continue reading

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MICROCAPITAL BRIEF: Barclays Bank and Development Organizations CARE International and Plan International Launch Microfinance Project in Ghana as Part of Larger Multi-Country Initiative

Barclays, a UK-based international investment bank, and international development organizations CARE International (CARE) and Plan International (Plan) have joined together to launch a microfinance initiative with the goal of reaching 63,000 people in Ghana [1]. The partnership between the three organizations was originally formed to improve access to basic savings and loan products. The initiative, begun in September 2008, aims to enable 500,000 poor and vulnerable people in ten countries across Africa, Asia and South America to access community-based financial services, such as village savings and loans associations. Barclays pledged to invest GBP 10 million (USD 15 million) over three years for the initiative [2]. Continue reading

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MEET THE BOSS: Rick Beckett, CEO of Microfinance Fund Manager Global Partnerships, Which Will Host a Social Investor Forum on June 8, 2010, in Seattle, Washington, USA

MicroCapital: What is your personal motivation for investing in microfinance?

Rick Beckett: I spent the first 20 years of my career in the private sector. My motivation is really rooted in a couple things: one is I want to live in a world where everybody is treated like they matter, and for me that’s a lot about people having the opportunity to earn a living and provide for their families. We don’t live in that kind of a world. I do the work I do at Global Partnerships and Direct Relief and elsewhere because I’m interested in how we can use market solutions to advance the common good. I’m intrigued by the opportunity to change investment markets to incorporate more social motivations. I’m intrigued by the evolution of enterprises and products to incorporate more of the common good, both in terms of global poverty and global health issues as well as environmental issues. So it’s a combination of wanting to see a different world and intrigue in how the market mechanisms are evolving to advance that. So it’s a pretty interesting place to be in right now.

MC: You have said previously that “All microfinance is not created equal.” How you make such distinctions?

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SPECIAL REPORT: Evaluating the Current Mindset of Investors Globally and Their Attitude to Microfinance as an Asset Class – Observations by Microfinance Investors at the Global Microfinance Investment Conference

“Raising Capital: Evaluating the Current Mindset of Investors Globally and Their Attitude to Microfinance as an Asset Class” was a panel discussion topic at the recent Global Microfinance Investment Conference which was held in New York. The conference was attended by a variety of participants in the microfinance sector: microfinance investors, representatives of microfinance institutions (MFIs), bankers, lawyers and researchers. Continue reading

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MICROCAPITAL BRIEF: One of the Largest Mobile Operators in Kenya, Safaricom, and Equity Bank, a Microfinance Bank, Join Together to Launch Mobile Banking Program

One of Kenya’s largest mobile operators, Safaricom, and Equity Bank, a microfinance bank based in Nairobi, have released M-Kesho, a new mobile banking product, which will target rural areas [1]. M-Kesho will allow M-Pesa (Safaricom’s mobile money transfer service) account holders to access a greater variety of services: money deposit, cash withdrawal and loan access. Continue reading

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MICROCAPITAL BRIEF: SMART Campaign Announces 1,000 Endorsements of Consumer Protection Principles

The SMART Campaign, an international microfinance advocacy organization launched in October 2009, announced it has reached 1,000 endorsements from microfinance organizations across 106 countries [1]. The Campaign’s mission is promote six principles in the treatment of low-income clients: avoidance of over-indebtedness, transparent pricing, appropriate collections practices, ethical staff behavior, mechanisms for redress of grievances, and privacy of client data [2]. Continue reading

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MICROCAPITAL BRIEF: The European Fund for Southeast Europe (EFSE) Pledges $1b to Small Business in Southeast Europe In Preparation For Annual Meeting to be Held from June 8-10, 2010

European Fund for Southeast Europe (EFSE), an organization based in Germany that attempts to foster economic development in Southeast Europe through the provision of microcredit, pledged EUR 900 million (USD 1 billion) to various financial institutions to support small businesses in the Southeast region of Europe at a press conference held in Skopje, FYR Macedonia. The conference was held in order to prepare for the Fund’s Annual Meeting, which is to be held from June 8-10, 2010 in Ohrid, FYR Macedonia. The money is specifically meant to finance long-term loans to small business, in particular to micro- and small enterprises (MSEs), as well as housing improvement loans to low-income households. Continue reading

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MICROCAPITAL BRIEF: One of Tanzania’s Largest Banks, The National Microfinance Bank (NMB) Gives $63m in Loans to Small and Medium Enterprises (SMEs)

The National Microfinance Bank (NMB), one of Tanzania’s largest banks, has issued loans worth TSH 92 billion (USD 63 million) to about 45,000 small and medium enterprises (SMEs) countrywide [1]. Although NMB was largely privatized in 2005, with 49 percent of its shares in the hands of a consortium of banks and firms primarily in the Netherlands, the government of Tanzania continues to be the majority shareholder. According to Robert Pascal, the head of SMEs at NMB, the loans were issued in an effort to contribute to national social and economic development. Continue reading

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MICROCAPITAL BRIEF: Nonprofit Microfinance Organization Grameen America Opens New Branch in New York Under Supervision of Muhammad Yunus

Grameen America, a non-profit microfinance organization founded by Dr. Muhammad Yunus, recently held the grand opening of a new Manhattan, New York, branch [1]. This grand opening brings the total number of branches of Grameen America to four, with branches in Queens and Brooklyn, New York, and a third in Omaha, Nebraska. The ceremony took place at City College of New York and was hosted by the Colin Powell Center for Policy Studies. The event featured previous Grameen America borrowers who had used their loans develop retail and culinary businesses [2]. Continue reading

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MICROCAPITAL BRIEF: Global Security Company Lockheed Martin Gives $30,000 to Support the Efforts of the Microfinance Organization FINCA

Lockheed Martin, a global security company based in the US state of Maryland, has given a USD 30,000 grant to support the microfinance efforts of the Foundation for International Community Assistance (FINCA) [1]. Established in 1984, FINCA is a global microfinance network, which serves approximately 700,000 people through its subsidiaries in 21 countries [2]. The funding from Lockheed Martin will help provide loan capital for FINCA’s clients in Afghanistan and El Salvador and will support FINCA Haiti’s relief fund efforts following the January 12th earthquake. Continue reading

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MICROCAPITAL BRIEF: President of the Nigerian Association of Small and Medium Enterprises (NASME) Cites Lack of Skilled Workers as Reason for Failure of Microfinance Institutions (MFIs) in Nigeria

Dr Ike Abugu, President of the Nigerian Association of Small and Medium Enterprises (NASME), has called the lack of skilled workers employed in microfinance as the reason why he feels microfinance has been unable to impact the economy and fulfill its promise. Dr Abugu commented, “The kind of people that went into microfinance was spillover from the commercial banks so they still had this banking mentality. They did not have the skills, knowledge and expertise to run microfinance banks.” Continue reading

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