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.

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].

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.

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.”

MICROCAPITAL BRIEF: PlaNet Finance China Reports One Third of Chinese Have No Access to Financial Services

A report released by PlaNet Finance China, a nonprofit acting to promote development of the microfinance sector, suggests that one third of China’s people have no access to financial services [1]. According to population data from the CIA World Factbook, this would total roughly 446 million people, a segment greater than the total population of all but one other nation, India [2].

MICROCAPITAL BRIEF: A New Study Published by the Microinsurance Innovation Facility of the International Labour Office Indicates 2.1% of the Potential African Market Is Covered by Insurance

According to a recent study entitled “The Landscape of Microinsurance in Africa” published by the Microinsurance Innovation Facility of the International Labour Office (ILO) 2.1 percent of Africa’s 700 million working poor have insurance coverage. The study found that, assuming a feasible insurance coverage level of five percent of gross domestic product (GDP), the potential size of the microinsurance market would be USD 25 billion, as compared to the current market size of USD 257 million.

MICROCAPITAL BRIEF: Jamaican Government to Provide $8m in Loans to Support Microenterprises

The government of Jamaica has announced it will provide JMD 750 million (USD 8.3 million) in loans to support microenterprises, which would bring the total funds available to micro-, small and medium-sized enterprises (MSMEs), through both the public and private sector, to JMD 6.7 billion (USD 75 million), according to Jamaican Commerce Minister, Karl Samuda.

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].