MICROCAPITAL BRIEF: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) Calls for Government-Owned Microfinance Institutions (MFIs)

The Associated Chambers of Commerce and Industry of India (ASSOCHAM), an organization representing approximately 100,000 Indian companies, plans to call attention to lacking rural microfinance service by asking the national government to operate microfinance institutions (MFIs) in those areas. ASSOCHAM reportedly argues that those MFIs currently serving rural India charge prohibitive annual interest rates of between 36 and 60 percent [1].

MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Provides $1.3m Loan to Albanian Leasing Company LandesLease Serving Small and Medium-sized Enterprises

The European Bank for Reconstruction and Development (EBRD) has provided a EUR 1 million (USD 1.3 million) loan to LandesLease, an Albanian leasing company, to expand its services to small and medium-sized enterprises (SMEs).

MICROCAPITAL BRIEF: SHARE Microfin Ltd of India Raises $11m Through Non-Convertible Debentures (NCD) with Assistance from Standard Chartered

SHARE Microfin Ltd, an Indian microfinance institution (MFI) with 2.4 million clients and a gross loan portfolio of USD 353 million, recently raised INR 500 million (USD 11 million) through a private placement of two-year, non-convertible debentures (NCD).

MICROCAPITAL BRIEF: Microfinance Invesment Vehicles’ (MIVs’) Total Assets Reach $3.6b in 2009 Despite Decreasing Yields and Stalled Industry Growth

Total assets of the top ten microfinance investment vehicles (MIVs) grew by 23 percent in 2009, reaching USD 3.6 billion, while MIVs’ investments in microfinance institutions (MFIs) grew by only 12 percent, according to a report by CGAP (Consultative Group to Assist the Poor), an independent policy and research center.

MICROCAPITAL BRIEF: Andhra Pradesh Government to File Criminal Cases Against Microfinance Institutions (MFIs) Using Coercion

The government of the Indian state of Andhra Pradesh recently announced it would file criminal cases against any microfinance institution (MFIs) found to have used coercion to recover loans.

MICROCAPITAL BRIEF: In Ecuador, Cap on Interest Rates Pressures Microlenders to Increase Loan Sizes, Sell to Larger Institutions

Ecuador’s central bank, Banco Central del Ecuador (BCE), recently further reduced the cap on annual interest rates to 30.5 percent from 33.9 percent for retail microlenders, and to 27.5 percent from 33.3 percent for all others lenders [1]. Since 2007, when the national government enacted banking reforms allowing the central bank to set a maximum interest rate for all banking institutions, the cap for microlenders has been dropping. According to Javier Vaca, the executive director of Red Financiera Rural (RFR), an Ecuadorian network of organizations that is focused on facilitating and promoting access to financial services, this forces microlenders to increase the average amount of their loans. Some are left with no choice but to sell their portfolios to larger institutions with lower fixed costs [2].

MICROFINANCE EVENT: Convergences 2015, Conference to Design Road Map for Microfinance In Next Decade, May 25 to May 26, 2010, Paris, France

Event Name: Convergences 2015

Event Date: May 25 to May 26, 2010

Event Location: City Hall, Paris, France

Event Website: http://www.convergences2015.org/

MICROFINANCE EVENT: The Swiss Agency for Development and Cooperation (SDC), Liechtenstein Development Service (LDS), CGAP (Consultative Group to Assist the Poor) and The Ford Foundation Co-host the Social Performance Task Force (SPTF) 2010 Annual Meeting in Bern, Switzerland, June 28 – July 2, 2010

Event Name: Social Performance Task Force (SPTF) 2010 Annual Meeting

Event Date: June 28 – July 2, 2010

Event Location: Kursaal Bern Congress and Culture Centre, Bern, Switzerland

Event Website: http://www.sptf.info/page/2010-annual-meeting

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

MICROCAPITAL BRIEF: Plan for New Law to Regulate Microfinance Sector in Uganda Announced

A new law to regulate the microfinance sector in Uganda is expected before the reading of the 2010/2011 budget in June [1]. The plan was announced by Ruth Nankabirwa, the microfinance state minister at the third Financial Inclusion Advisors Conference recently hosted in the capital, Kampala. According to Ms. Nankabirwa, membership in the microfinance sector has grown from 644,318 in 2008 to 1,154,715 in 2009. A large proportion of funds within the sector are unregulated – there are over 1,340 microfinance institutions (MFIs) in Uganda that are not regulated. Ms. Nankabirwa argues that regulating the microfinance sector will increase consumer confidence and encourage more people to use its services.

MICROCAPITAL BRIEF: Central Bank of Kenya Allows Banks and Deposit-Taking Microfinance Institutions to Launch Agency Banking Services

The Central Bank of Kenya (CBK) has passed a law allowing banks, deposit-taking microfinance institutions (MFIs) and mortgage finance companies to open branches through third parties, or agency banks.

MICROCAPITAL BRIEF: The National Association of Microfinance Banks (NAMB) to Partner with Universities to Facilitate Capacity Building in Nigerian Microfinance Sector

Chief Jethro Akun, the Vice President of the National Association of Microfinance Banks (NAMB) in Nigeria, has announced plans to partner with the National University Commission (NUC), a parastatal under the Federal Ministry of Education established in 1962, to facilitate the offering of courses in microfinance banking at the university level. According to Mr. Akun, the partnership is necessary as the microfinance sector needs more “manpower” to achieve growth in the sector. He also believes that courses in microfinance banking will help to allay many of the fears of the general public over the viability of microfinance banks [1].

MICROCAPITAL BRIEF: Rwandan Microfinance Institution Urwego Opportunity Bank (UOB) Reports Lending Fosters Social Reconciliation

Radio Netherlands Worldwide recently reported that microfinance in Rwanda is “booming” and the Netherlands is contributing to this “success” [1]. One of the potential effects of the rise of microfinance in Rwanda is social reconciliation. Faustin Zihiga, the Chief Operating Officer of Urwego Opportunity Bank (UOB) of Rwanda, the largest microfinance bank in Rwanda among those reporting to the Microfinance Information Exchange (MIX Market), suggests that in group-lending programs, survivors of the genocide mix in the same groups as perpetrators of the genocide. They begin to associate themselves by their group, not by their ethnic background. According to Zihiga, the social change is often even more visible than the economic change that microfinance brings about [3].

MICROCAPITAL BRIEF: Pro Mujer Releases First Issue of Publication on Innovative Microfinance Services

Pro Mujer, an international microfinance organization serving 202,000 clients in Latin America, recently released the first issue of a publication that will evaluate field research on new microfinance services.

MICROCAPITAL BRIEF: Business Daily Africa Article Claims Kenyan Insurance Companies are Looking to Microinsurance to Boost Profits

A recent article in the Nairobi-based Business Daily Africa newspaper stated that insurance companies in Kenya are increasingly looking towards microinsurance ventures to boost their profits.

MICROCAPITAL BRIEF: Students Make Commitments to Microfinance At Third Annual Clinton Global Initiative University (CGI U) Meeting in Miami, Florida

At the third annual Clinton Global Initiative University (CGI U) meeting which recently took place at the University of Miami, Florida, students, universities and national youth organizations made commitments to implement solutions to global challenges worth approximately USD 42 million; several of the commitments are aimed at advancing microfinance efforts around the world.

MICROCAPITAL BRIEF: Financing Facility for Remittances (FFR) Announces Call for Proposals 2010

The International Fund for Agricultural Development’s (IFAD’s) Financing Facility for Remittances (FFR), a USD 18 million fund that seeks to reduce poverty by leveraging remittances for development in rural areas of developing countries, recently announced its Call for Proposals 2010.

MICROCAPITAL BRIEF: Current and Former CEOs of ACCION International Discuss Role of Microfinance and Capital Markets in Fighting Poverty

In response to the upcoming IPO (initial public offering) of SKS Microfinance, an Indian microfinance institution (MFI) with more than 3.5 million borrowers, Mr Michael Schlein, President and CEO of ACCION International, and Mr Michael Chu, senior lecturer at Harvard Business School and former CEO of ACCION, discuss the role of microfinance and the capital markets in fighting poverty in a Forbes magazine article.