Category: Trends/Challenges

MICROCAPITAL BRIEF: African Development Bank (AfDB) Approves $660k Grant to Access Bank Tanzania (ABT), a Microfinance Bank in Tanzania

The African Development Bank (AfDB), a regional development organization in Africa, has approved a USD 660,000 grant to Access Bank Tanzania (ABT), a newly established commercial bank in Tanzania focusing on microfinance. The initiative was made possible through the Fund for African Private Sector Assistance (FAPA), a subsidiary of the Enhanced Private Sector Assistance program, which is a billion-dollar initiative of the government of Japan and the AfDB to promote private sector development in Africa. Continue reading

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MICROCAPITAL BRIEF: The Central Bank of Nigeria (CBN) Investigates “Fraudulent Practices” at Five Recently Failed Nigerian Microfinance Banks

Mr. Olufemi Fabanwo, Nigeria’s (CBN) Director of the Other Financial Institutions Department, told news agencies that the central bank will investigate five recently failed microfinance banks and, if any operators are found to be fraudulent, he or she will be handed over to the EFCC, the country’s law enforcement agency. Operators are considered fraudulent if they have no state license to engage in banking activities. The five banks are: Integrated Microfinance Bank, KFC Microfinance Bank, Bristol Microfinance Bank, Unique Microfinance Bank, and Milestone Microfinance Bank, all based in Lagos. Continue reading

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MICROCAPITAL BRIEF: Conglomerates Enter the Microfinance Industry in South Korea Via the Government-Inspired Miso (Smile) Microcredit Foundation

After Samsung, one of the world’s largest conglomerates by revenue, and Woori Financial Group, a Seoul-based financial services holding company, recently opened branches of the Miso Microcredit Foundation, other Korean conglomerates have begun to follow suit. The Miso (Smile) Microcredit Foundation is a government-led microcredit lending program in Korea that plans to raise KRW 2 trillion (USD 1.69 billion) over the next 10 years. Continue reading

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MICROCAPITAL BRIEF: Central Bank of Indonesia Predicts Increase in Microcredit for Small and Medium-sized Enterprises (SMEs) in North Sumatra

Bank Indonesia (BI), the central bank of Indonesia, has predicted that the supply of microcredit to low and medium-income enterprises will increase this year. According to Gatot Sugiono, a BI representative from Medan, the capital of North Sumatara, the supply of microcredit could increase to above 50 percent of total bank credits in North Sumatra. The increase would suggest greater access to credit among low-income enterprises. Mr. Sugiono recently estimated the present supply of microcredit at IDR 68.3 trillion (USD 7.2 billion). [1] Continue reading

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MICROCAPITAL BRIEF: Abhijit Vinayak Banerjee and Esther Duflo of MIT, Dean Karlan of Yale Write New York Times Article Entitled “The Role of Microfinance”

Abhijit Vinayak Banerjee and Esther Duflo of the Massachusetts Institute of Technology (MIT) and Dean Karlan of Yale University of Connecticut have written an editorial for the New York Times entitled “The Role of Microfinance” [1]. Continue reading

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MICROCAPITAL BRIEF: Reynaldo G. David, President and Chief Executive Officer (CEO) of the State-Owned Development Bank of the Philippines (DBP), Comments on the DBP’s Efforts to Support Micro, Small, and Medium Enterprises (MSMEs) Through a Wider “Range of Activities”

Reynaldo G. David, President and Chief Executive Officer (CEO) of the state-owned Development Bank of the Philippines (DBP), has commented on the DBP’s efforts to increase support for micro, small, and medium enterprises (MSMEs) through a wider “range of activities” [1,2]. Continue reading

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MICROFINANCE PAPER WRAP-UP: Climate Change and Microfinance by Asif Dowla

Written by Asif Dowla, published by Grameen Foundation and Oxfam America in November 2009, 39 pages, available at: http://www.oxfamamerica.org/press/pressreleases/grameen-foundation-and-oxfam-america-release-new-report-on-climate-change-and-microfinance Continue reading

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MICROCAPITAL BRIEF: UnityKapital Assurance Plc of Nigeria Announces Information Technology Development, Expansion into Microinsurance

UnityKapital Assurance Plc, a Nigerian insurance company with a recorded NGN 518 million (USD 3.47 million) profit after tax in 2008, has announced the deployment of a comprehensive information technology (IT) system and an expansion into newer areas of insurance, including Islamic insurance and microinsurance. Continue reading

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MICROCAPITAL BRIEF: Critics Accuse Smile Microcredit Foundation of Heavy-Handed Regulation, Stifling Access to Microfinance in Korea

Despite the increase in microcredit financing in South Korea, many analysts warn that low-income individuals may be unable to access small loans due to various rules and requirements. A case example is the owner of a small clothing shop in Jegi-dong, Seoul who was unable to receive a loan of KRW 40 million (USD 33,700) from Woori Microcredit Bank, a subsidiary of Woori Financial Group and an affiliate of the “Smile Microcredit Foundation,”  a government-led microcredit lending program in Korea. [4] The woman failed to meet a requirement stipulating that business owners must have run his or her shop for at least two years to be eligible for microcredit. Continue reading

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MICROCAPITAL PAPER WRAP-UP: Scenarios for Branchless Banking in 2020, by Mark Pickens, David Porteous, and Sarah Rotman

Written by Mark Pickens, David Porteous, and Sarah Rotman, published by CGAP (Consultive Group to Assist the Poor) and the United Kingdom’s Department for International Development (DFID) in November 2009, 28 pages, available at: http://www.cgap.org/gm/document-1.9.40599/FN57.pdf

For this paper, CGAP (Consultive Group to Assist the Poor) and the United Kingdom’s Department for International Development (DFID) consulted 200 experts from more than 30 countries to ask “How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020?” To answer this, the study identifies four important forces that seem poised to effect branchless banking: Continue reading

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MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Extends $5m Local Currency Credit Line to Microinvest to Boost Microfinance Industry in Moldova

The European Bank for Reconstruction and Development (EBRD) has extended an MDL 62.7 million (USD 5 million) local currency credit line to Microinvest of Moldova for on-lending to micro and small enterprises (MSEs). This is EBRD’s first local currency loan in Moldova. Continue reading

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MICROCAPITAL BRIEF: ‘State of the Sector 2009,’ a Report by ACCESS Development Services, Studies Microfinance in India

A recent article from LiveMint.com highlighted the results of ‘State of the Sector 2009,’ a study of 230 microfinance institutions (MFIs) in India performed by ACCESS Development Services, “a not-for-profit organization that offers consulting services to MFIs” [1,2,3]. According to the report, “one out of three microfinance institutions (MFI) in India made losses in fiscal 2009,” which ended on March 31, 2009 [1]. Additionally, 42 percent of MFIs with a loan portfolio at or below INR 5 crore, the equivalent of over USD 1 million, reported losses in the same fiscal year [1]. On the other hand, 80 percent of MFIs with a loan portfolio above INR 50 crore, the equivalent of over USD 10.7 million, were profitable [1]. The article cites operating costs for smaller MFIs, which can be as high as 60 percent of total costs, as an explanation [1]. In terms of repayment, the report claims that the MFIs in the study recovered 99 percent of loans [1]. Overall, the MFIs in the study nearly doubled their loan portfolio in fiscal year 2009, reaching INR 11,734 crore, the equivalent of over USD 2.5 billion, and added 8.5 million borrowers, resulting in a total of 22.6 million borrowers [1]. Continue reading

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MICROCAPITAL BRIEF: Australia’s Foundation for Development Cooperation Wants Your Input on Establishing a Global Masters Degree in Microfinance

In response to an internal study showing strong demand for a world-class-quality, research-informed masters degree in microfinance, Australia’s Foundation for Development Cooperation (FDC) is seeking your input on this possibility via an online survey. While acknowledging that there are a few existing masters degrees specialising in microfinance, FDC argues for the expansion of offerings citing the ranking of “weak management quality” in the top five risks for microfinance by the “Microfinance Banana Skins” survey each of the last two years. Continue reading

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