Category: Trends/Challenges

MICROCAPITAL BRIEF: “Ethical Investment: Can it outperform other funds?”: Rob Robbins Examines Performance of Ethical Investments

Rob Robbins, founder of ‘Investing for the Soul,’ a US-based online “ethical investment” magazine, insists ethical investments can outperform their mainstream rivals. Ethical or socially responsible investment is an investment strategy that seeks to maximize both financial return an social good. According to Mr Robbins, “Most studies of ethical or socially responsible investment funds find that their performance is roughly similar or sometimes higher than returns from conventional investments.” Continue reading

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MICROCAPITAL BRIEF: South Korean Government Launches Sunshine Microfinance Loan Program under Smile Microcredit Bank for Low-income Households

The South Korean government has launched “Sunshine Loans,” a new offering under Smile Microcredit Bank – a state-run microfinance program established in 2009 to provide unsecured loans to low-income households through partnerships with the private sector. Over the next five years, the program is slated to extend KRW 10 trillion (USD 8.45 billion) to low-income households. The program will be implemented by a variety of financial institutions, including the National Agricultural Cooperative Foundation, the National Federation of Fisheries Cooperative, the National Credit Union Federation of Korea, the Korean Foundation of Community Credit Cooperatives and several unnamed private mutual savings banks. Continue reading

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MICROCAPITAL BRIEF: National Microfinance Bank (NMB) Launches ‘Juhudi’ Loan Program to Improve Access to Microcredit in Tanzania

The National Microfinance Bank (NMB), a commercial bank in Tanzania, has announced its intentions to provide ‘Juhudi’ loans of TSH 5 million (USD 3,300) to TSH 500 million (USD 330,000) to entrepreneurs in the country. According to Mr Kees Verbeek, the chief commercial officer of NMB, the issue for entrepreneurs is not whether loans are available, but rather if the interest rates, which reportedly vary between 18 to 25 percent in Tanzania, are affordable. Juhudi loans will be distributed at a 15 percent annual interest rate. Continue reading

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MICROCAPITAL BRIEF: Group of 20 (G-20) and Ashoka’s Changemakers Announce Small and Medium Enterprise (SME) Finance Challenge 2010

The Group of 20 Finance Ministers and Central Bank Governors (G-20), a group of leaders from 20 economies, and the US-based nonprofit, Ashoka, have announced that they will be holding a worldwide contest for the best models that catalyze finance for small and medium-sized enterprises (SMEs). The challenge is open to all private sector participants, including private financial institutions, private investors and companies, socially responsible investors, foundations and civil society organizations.
The goal of the Challenge is to identify catalytic and well-targeted public interventions to unlock private finance for SMEs. Maximizing leverage of scarce public resources is at key part of the Challenge. Continue reading

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Written by Comments Off on MICROCAPITAL BRIEF: Group of 20 (G-20) and Ashoka’s Changemakers Announce Small and Medium Enterprise (SME) Finance Challenge 2010 Posted in Events, Trends/Challenges

MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Releases French Edition of 2009 Arab Microfinance Report

The Microfinance Information Exchange (MIX) in partnership with Sanabel, a nonprofit organization dedicated to advancing Arab microfinance, and CGAP (Consultative Group to Assist the Poor), an independent policy and research center housed at the World Bank Group, recently released the French edition of its 2009 Arab Microfinance Analysis and Benchmarking Report. Continue reading

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MICROCAPITAL BRIEF: Microfinance Experts Express Concern Over Rapid Growth of Microlending by For-Profit Organizations in India

An article in the Financial Times titled, “Microfinancing Spreads Beyond India’s Grassroots,” discusses recent concerns raised by some microfinance experts surrounding the increase in microlending by profit-oriented companies in India. Continue reading

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MICROFINANCE PAPER WRAP-UP: A Business to Call Her Own: Identifying, Analyzing and Overcoming Constraints to Women’s Small Businesses in Latin America and the Caribbean, by Jennifer Powers and Barbara Magnoni, Published by the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB)

By Jennifer Powers and Barbara Magnoni of EA Consultants, Published by the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), April 2010, 100 pages, available at: http://idbdocs.iadb.org/wsdocs/getDocument.aspx?DOCNUM=35282406

The authors of this study focused on the differences between male and female entrepreneurs in six countries in Latin America: Guatemala, Nicaragua, Colombia, Bolivia, Mexico and Peru. Continue reading

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Written by Comments Off on MICROFINANCE PAPER WRAP-UP: A Business to Call Her Own: Identifying, Analyzing and Overcoming Constraints to Women’s Small Businesses in Latin America and the Caribbean, by Jennifer Powers and Barbara Magnoni, Published by the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) Posted in Latin America, Risks, Transparency, Trends/Challenges

MICROCAPITAL BRIEF: SKS Microfinance Launches India’s First Initial Public Offering (IPO) by a Microfinance Institution

SKS Microfinance has launched India’s first initial public offering (IPO), anticipation of which stretches at least back to a report by MicroCapital on March 29, 2010. Continue reading

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MICROFINANCE PAPER WRAP-UP: Why Microfinance Take-up Rates Are Low & Why It Matters, by Dean Karlan, Jonathan Morduch and Sendhil Mullainathan

By Dean Karlan, Jonathan Morduch and Sendhil Mullainathan, published by Financial Access Initiative, June 2010, available at: http://financialaccess.org/sites/default/files/RFN11_Why_microfinance_takeup_rates_are_low%286-17-10%29.pdf

Evidence indicates that under half of eligible households participate in microfinance. In this paper, Mr Karlan, Mr Morduch and Mr Mullainathan begin by reviewing why take-up rates are important and how they can be measured. Data from thirteen projects show that take-up rates vary from 2 to 84 percent of eligible individuals. Continue reading

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MICROCAPITAL BRIEF: International Finance Corporation (IFC) and Gesellschaft fur Technische Zusammenarbeit (GTZ) to Provide Technical Assistance to Philippines’ Central Bank to Spur Lending to Small and Medium-Sized Enterprises

The International Finance Corporation (IFC), a member of the World Bank Group, and Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ – German Technical Cooperation Center), a German government-owned international development organization, are providing technical assistance to the Philippines’ central bank in order to strengthen its supervisory and regulatory capacity for lending to small and medium-sized enterprises. A study last year by Asia Business Monitor showed that approximately 83 percent of small and medium-sized enterprises in the Philippines have experienced difficulties in accessing credit from banks. According to Will Beloe, IFC head of advisory services in the Philippines, greater support from central bank supervisors for commercial banks specializing in lending to small and medium enterprises is expected to increase credit flow to the sector. Continue reading

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MICROCAPITAL BRIEF: Saija Finance Private Limited Addresses Shortage of Microfinance in Bihar, India

Since 2008 Saija Finance Private Limited, a nonbanking finance company with total assets of INR 11 million (equivalent to USD 240,000), has been providing microfinance services in the Indian state of Bihar, which according to a report by the National Bank for Agriculture and Rural Development (NABARD), has a credit-demand supply gap of 96 percent. Continue reading

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MICROCAPITAL BRIEF: Southern Sudan Holds Microfinance Conference with Sponsorship from United States Agency for International Development (USAID)

With sponsorship from the United States Agency for International Development (USAID), a government agency that provides international economic and humanitarian assistance, Southern Sudan recently held what was billed as its first microfinance conference. The aim of the conference, which was held in the regional capital of Juba, was to provide a forum for stakeholders to exchange views about the status of microfinance in Southern Sudan and to develop a strategy to improve microfinance in the region. Continue reading

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MICROCAPITAL BRIEF: Vineet Sukumar of the Institute for Financial Management and Research (IFMR) Capital Defends Microfinance Securitization

Vineet Sukumar of the Institute for Financial Management and Research (IFMR) Capital has recently written a counter-argument to an article written by Daniel Rozas and Vinod Kothari and published by Microfinance Focus which argued that “microfinance securitization does not, in reality, separate ‘pool risk’ from ‘originator risk’ and hence should not be rated very differently from the originator of the portfolio.” Continue reading

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MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Releases, “Microfinance Funders Profiles – A Short Guide for Young and Small Institutions Still Looking for a Match,” by Adrian Gonzalez

Microfinance Information Exchange (MIX) Lead Researcher, Mr Adrian Gonzalez, recently authored a report published by MIX discussing the funding sources for microfinance institutions (MFIs) in the lowest quartile in terms of size, age, profitability and portfolio quality. Continue reading

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Written by Comments Off on MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Releases, “Microfinance Funders Profiles – A Short Guide for Young and Small Institutions Still Looking for a Match,” by Adrian Gonzalez Posted in Key Players, Trends/Challenges

MICROCAPITAL BRIEF: New Microfinance Company, Kongalend, Launched in Namibia to Support Purchase of Renewable Energy Products

A new microfinance company, Kongalend, has been launched in Windhoek, Namibia, to offer collateral-free loans to small and medium-sized enterprises as well as private households interested in purchasing renewable energy products. Loans between NAD 1,000 (USD 133) and NAD 2,500 (USD 332) will be issued not in cash, but rather through seven unnamed local partner companies that provide renewable energy technology. Continue reading

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Written by Comments Off on MICROCAPITAL BRIEF: New Microfinance Company, Kongalend, Launched in Namibia to Support Purchase of Renewable Energy Products Posted in Africa, Trends/Challenges

MICROCAPITAL BRIEF: Indian Finance Minister Pranab Mukherjee Calls on Formal Banking Institutions to Reach Poor

The Finance Minister of India, Pranab Mukherjee, recently commented that mainstream financial institutions are not currently, but should be, reaching India’s poor. Continue reading

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MICROCAPITAL BRIEF: MicroRate Releases 5th Annual Survey: “State of Microfinance Investment: The MicroRate 2010 Microfinance Investment Vehicle (MIV) Survey”

MicroRate, a microfinance rating agency, has released its fifth annual survey evaluating trends in microfinance investment – “State of Microfinance Investment: The MicroRate 2010 Microfinance Investment Vehicle (MIV) Survey.” The 2010 MIV survey indicates that investor interest in microfinance funds and similar intermediaries remains strong despite the global recession. However, strong interest from investors is being offset by weaker demand for funding from microfinance institutions (MFIs). In 2009, MIVs grew by 22 percent, but assets actually deployed to MFIs only grew 11 percent. This leaves MIVs with rapidly increasing levels of liquidity. By the end of last year, competition forced rates below the minimum level that some MIVs deem necessary in order to be compensated fully for the risk involved. Continue reading

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