Category: Trends/Challenges

MICROCAPITAL BRIEF: Vishwavir Ahuja Joins Board of Ratnakar Bank, a Commercial Bank in Kolhapur, India

Vishwavir Ahuja, the former CEO of the Indian division of Bank of America, has joined the board of Ratnakar Bank, a community bank based in rural Kolhapur, as an independent director. According to Mr Ahuja, he hopes to transform the “relatively-unknown rural bank into a major player with a focus on inclusive growth.” Some have speculated that Mr Ahuja’s position on the board will lead to a greater influx of funding through unspecified “connections” with investors at Mumbai-based Centrum, a financial services firm established in 1977. Continue reading

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MICROCAPITAL BRIEF: Grameen Capital India Appoints Sanjay Nayar as New Director

Sanjay Nayar, the CEO of Kohlberg Kravis Roberts & Co (KKR) – a global alternative assets manager – has been named to the board of directors of Grameen Capital India, a Mumbai-based social business that promotes growth in the microfinance sector in India. Prior to joining KKR, Mr Nayar was the CEO of Citigroup India and South Asia. Continue reading

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MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) in Nigeria Demand Direct Access to ‘Meso’ Credit Scheme from the National Poverty Eradication Programme (NAPEP)

Microfinance institutions (MFIs) in Nigeria want to bypass commercial banks to access government money in the form of a ‘meso’ credit scheme designed by the National Poverty Eradication Programme (NAPEP) – a government agency responsible for coordinating and monitoring all poverty eradication activities nationwide – to provide loans of between NGN 500,000 (USD 3,300) and NGN 50 million (USD 331,000) for agricultural processing in rural areas. The current regulations mandate that the meso credit funds be distributed to commercial banks for on-lending to qualified microfinance banks at “competitive rates.” Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) and IFC Capitalization Fund Agree to Invest $140m in Bank South Pacific (BSP) of Papua New Guinea to Extend Financial Services in Pacific Islands

The International Finance Corporation (IFC), a member of the World Bank Group, and the IFC Capitalization Fund, a USD 3 billion global equity and subordinated debt fund, have signed an agreement to invest USD 140 million in Bank South Pacific (BSP), one of the largest commercial banks in Papua New Guinea, in an effort to expand financial services across the Pacific Islands. Continue reading

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MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) and Global Impact Investing Network (GIIN) to Share Data With $187,000 Grant From Rockefeller Foundation

The Rockefeller Foundation, a US-based grantmaking organization, has awarded a USD 187,000 grant to two other US-based nonprofits, Microfinance Information Exchange (MIX) and the Global Impact Investing Network (GIIN), to “increase transparency and comparability across microfinance and the broader impact investing industry.” The grant will be used to develop a data feed that will allow GIIN’s Impact Reporting and Investment Standards (IRIS) project, which was created to develop a common framework for defining, tracking and reporting the performance of “impact capital,” to access data from MIX. Continue reading

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MICROCAPITAL BRIEF: Societe Generale de Banques du Senegal (SGBS) and Obopay Launch Yoban’tel, a Mobile Money Transfer and Bill Payment Service, in Senegal

The Societe Generale de Banques du Senegal (SGBS), a private commercial bank with CFA 400 billion (USD 743 million) in total assets, and Obopay, a US-based mobile payment service established in 2005, have united to launch Yoban’tel, a mobile money transfer and bill payment service, in Senegal. The system will allow the use of any mobile phone to transfer money or pay bills using SMS (short message service, also known as text messaging). Continue reading

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MICROCAPITAL BRIEF: Three Directors of Impact Microfinance Bank Limited Arrested for Fraud in Nigeria

Three directors of Impact Microfinance Bank Limited, a microfinance institution established in 2008 with headquarters in Lagos, have been arrested for fraud. The three men – 49 year-old Innocent Akpan, 45 year-old David Obieke and 45 year-old Joseph Nwabuwanne – were arrested after several depositors complained that they could not access their funds. The suspects allegedly mismanaged the depositors’ money and subsequently could not honor clients’ deposits. Continue reading

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MICROCAPITAL BRIEF: Pakistan Microfinance Network (PMN) Discussion Indicates Need for Greater Focus on Rural Areas

The Pakistan Microfinance Network (PMN), an organization established in 1995 and comprised of 12 microfinance institutions (MFIs) throughout Pakistan, recently held an organized discussion regarding Pakistan’s rural finance market. Continue reading

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MICROFINANCE PAPER WRAP-UP: Where Does Microfinance Flourish? Microfinance Institution Performance in Macroeconomic Context, by Christian Ahlin, Jocelyn Lin and Michael Maio

By Christian Ahlin, Jocelyn Lin and Michael Maio, published by the Journal of Development Economics, April 27, 2010, 16 pages, available at: http://news.msu.edu/media/documents/2010/06/8d6d8126-97dd-4569-b65b-736f700fc844.pdf

Mr Ahlin, Ms Lin and Mr Maio study whether and how the success or failure of microfinance institutions (MFIs) depends on the country-level context, particularly macroeconomic and macro-institutional features. In order to explore these questions, the authors reviewed data on 373 MFIs from 74 countries. The authors rely on two groups of MFI performance variables: operational self-sufficiency (the ratio of revenues to costs) and loan portfolio growth. Operational self-sufficiency is broken down into three components: financial revenues and costs, losses due to default and operating costs, so that, in some cases, the authors are able to identify the channel through which a given macroeconomic variable is correlated with the financial sustainability of a MFI. MFI portfolio growth is decomposed into two components: growth in number of borrowers (extensive growth) and growth in average loan size (intensive growth). Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) Arranges Syndicated Loan of $165m for Banco Daycoval to Improve Access to Finance for Small and Medium-Sized Enterprises in Brazil

The International Finance Corporation (IFC), a member of the World Bank Group, with the participation of 11 international banks, has arranged a syndicated loan of EUR 134 million (USD 165 million) for Banco Daycoval, a commercial bank based in Sao Paolo, with the aim of increasing access to finance for small and medium-sized enterprises in Brazil. The 11 international banks involved in the transaction are: Itau Europa, Standard Bank, HSBC, Calyon, Citibank, Oberbank, Banco Santander, Standard Chartered, WestLB, Commerzbank and ING. Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) Extends $24.6m Loan to ProCredit Bank Serbia to Improve Access to Finance for Small and Medium-Sized Enterprises

The International Finance Corporation, a member of the World Bank Group, has extended a EUR 20 million (USD 24.6 million) loan to ProCredit Bank Serbia, a private, development-oriented, full-service bank established in 2001, in an effort to increase access to loans for small and medium-sized enterprises in the country. According to Giovanni Daniele, IFC’s Resident Representative in Serbia, small and medium-sized enterprises are an important generator of employment in the country. However, the sector was severely hit by the recent global financial crisis, and companies are now experiencing problems in securing new financing. Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) Partners with eTranzact to Launch Rural Telephony Project (RTP) MobileMoney in Nigeria

The International Finance Corporation (IFC), a member of the World Bank Group, has partnered with eTranzact, an online payment system based in Nigeria, to launch Rural Telephony Project (RTP) MobileMoney. The goal of the program is to reach rural people in Nigeria – who often lack access to banking services – through the use of mobile phones. Continue reading

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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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Written by Comments Off on MICROCAPITAL BRIEF: Microloan Default Risk Rises in India as SKS Microfinance Plans Initial Public Offering (IPO) Posted in Risks, Trends/Challenges

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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Written by Comments Off on 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 Posted in Key Players, Latin America, Trends/Challenges

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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