The People’s Bank of China (PBoC), the nation’s central banking authority, recently published statistics on the performance of the microfinance sector in 2010 including the number of microfinance institutions (MFIs), number of employees and both capital levels and outstanding loan balances by province and municipality.
Category: Trends/Challenges
MICROCAPITAL BRIEF: MicroSave Launches Social Performance Management (SPM) Toolkit for Microfinance Institutions (MFIs)
MicroSave, a private consulting company that provides technical assistance to microfinance institutions (MFIs), recently launched its social performance management (SPM) toolkit to assist MFIs and their stakeholders in determining how closely an MFI’s operations are aligned with its social objectives.
MICROFINANCE PAPER WRAP-UP: Mobile Value-Added Services (MVAS) – A Vehicle to Usher in Inclusive Growth and Bridge the Digital Divide; By Sachin Sondhi, Sandip Biswas, Gaurav Gupta, Prakash Bharwani; Published by Deloitte Touche Tohmatsu India Private Limited
By Sachin Sondhi, Sandip Biswas, Gaurav Gupta, Prakash Bharwani; published by Deloitte Touche Tohmatsu India Private Limited; January 2011; 68 pages; available at https://www.deloitte.com/assets/Dcom-India/Local%20Assets/Documents/Deloitte_ASSOCHAM_MVAS_Study.pdf.
MICROCAPITAL BRIEF: SEED Financial Services, Financial Information Network and Operations Limited (FINO), A Little World Seek Private Equity Funding to Scale Up Business Correspondent Operations in India
Business Standard, an Indian newspaper, has reported that SEED Financial Services, an Indian consulting, planning and implementation agency; Financial Information Network and Operations Limited (FINO), an Indian technology company that seeks to enable financial inclusion; and A Little World, a technology company based in India are seeking private equity funding to scale their business correspondent operations. Business correspondents are individuals or organizations that are permitted to “raise deposits; disburse tiny loans; recover bad loans; sell micro insurance, mutual funds, pension products and other third-party products; and receive and deliver small value remittances” on behalf on banks [2].
MICROCAPITAL BRIEF: FM Bank of Poland Signs $24.6m Agreement with European Investment Fund (EIF), Guaranteed By European Progress Microfinance Facility (EPMF)
FM Bank, a Polish financial institution specializing in servicing micro- and small enterprises, has signed an agreement for a loan of PLN 68.7 million (USD 24.6 million) from European Investment Fund (EIF), which invests in institutions that finance small and medium-sized enterprises (SMEs). The loan, which will be used to on-lend to start-up enterprises, will be made under a 75-percent guarantee from the European Progress Microfinance Facility (EPMF), which seeks to enable microfinance institutions (MFIs) within the EU to increase lending to entrepreneurs by issuing guarantees, loans and equity financing. Under the agreement, FM Bank will provide Polish entrepreneurs loans of up to EUR 25,000 (USD 35,600) for enterprises that have been operating for less than one year [1]. Currently, entrepreneurs with less than 12 months of business history are excluded from external financing in Poland according to EIF.
MICROCAPITAL BRIEF: Bangladeshi Microfinance Organization BRAC Admits to Pushing Loans to Over-Indebted Borrowers
BRAC (formerly Bangladesh Rehabilitation Assistance Committee), a Bangladeshi development organization that was established in 1972, reportedly admitted to pushing loans to borrowers that could not afford them.
MICROCAPITAL BRIEF: Fondazione Giordano Dell’Amore Accepting Applications for Microfinance Best Practices International Award 2011
Fondazione Giordano Dell’Amore, an Italian foundation, is accepting applications for its Microfinance Best Practices International Award 2011. The award aims to increase the understanding of microfinance as a tool to fight poverty and social exclusion and to encourage microfinance practitioners to share successful practices. The focus of the award for 2011 is “transparency, client protection and social impact.”
MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Microfinance Blog Explores Effects of Arab Upheaval on Microfinance Institutions (MFIs)
CGAP Microfinance Blog, operated by US-based think tank CGAP (Consultative Group to Assist the Poor), recently posted an article by Mohammed Khaled, a CGAP representative for the Middle East-North Africa Region, that explores the implications for microfinance institutions (MFIs) of the recent wave of demonstrations and resulting leadership changes that have occurred in the Middle East and North Africa. Mr Khaled says that while it “could be too early to analyze the impact of recent events in the Arab world on microfinance, one can conclude some general and common lessons despite differences among countries” [1]. Mr Khaled argues that the following areas are of the utmost importance: emergency plans, strategic partnerships with clients, internal control systems and job creation [1].
MICROCAPITAL BRIEF: responsAbility of Switzerland Loans $6.9m to FIE Grand Poder of Argentina, Corporacion Narino Empresa y Futuro (Contactar) of Colombia, Banco Solidario of Ecuador, Arasy Organica of Paraguay
responsAbility Social Investments AG, an investment company based in Switzerland, recently reported to MicroCapital that it loaned the equivalent of USD 6.92 million to microfinance organizations Argentina, Colombia, Paraguay and Ecuador.
MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Explores Savings On Microfinance Blog
CGAP (Consultative Group to Assist the Poor), an independent policy and research center housed at the World Bank Group, recently launched a series on its microfinance blog to promote discussions of savings services for poor people.
MICROCAPITAL BRIEF: African Development Bank (AfDB), World Bank Group Publish “Leveraging Migration for Africa: Remittances, Skills, and Investments” Report
African Development Bank (AfDB), a development finance institution that gives loans and grants to governments and private companies in Africa, and the World Bank Group, a Washington, DC-based group of five institutions with a shared mission to improve living standards for people in the developing world, have jointly published a report titled “Leveraging Migration for Africa: Remittances, Skills, and Investments.”
MICROCAPITAL BRIEF: India’s Gujarat State Inks Microfinance Partnership With Large Industries, Self-Help Groups (SHGs)
The government of the Indian state of Gujarat has reportedly developed partnerships between self-help groups (SHGs), groups of individuals who are jointly responsible for the repayment of loans, with major industrial businesses, a strategy that it believes will encourage banks to offer loans to the groups at lower interest rates.
MICROCAPITAL BRIEF: Call for Book Chapters to be Published in: “Microfinance in Developing and Developed Countries: Issues, Policies and Performance Evaluation”, Abstract Submission Deadline July 15, 2011
Microfinance experts are invited to contribute chapters to a book scheduled for publication in mid-2012: “Microfinance in Developing and Developed Countries: Issues, Policies and Performance Evaluation”. Submissions should cover one or more of the following themes: 1) review of microfinance in developed and developing countries, 2) evaluation of policies and managerial tools designed to support small businesses through microfinance and 3) performance assessment and the role of microfinance rating agencies.
MICROCAPITAL EVENT: Developing Inclusive Financial Systems: The CGAP (Consultative Group to Assist the Poor) Course for Funders of Microfinance in Dakar, Senegal, June 6 – June 10, 2011 CANCELLED
Event Name: Developing Inclusive Financial Systems: The CGAP Course for Funders of Microfinance
Event Date: June 6 – June 10, 2011 THIS EVENT HAS BEEN CANCELLED
Event Location: Dakar, Senegal
MICROCAPITAL BRIEF: Zidisha Online Lending Platform Offering Borrower Performance Ratings, Facilitates $50k in Loans
Zidisha, a nonprofit in the US, reports that it has facilitated approximately USD 50,000 in loans from 250 lenders to 80 low-income entrepreneurs in Kenya and Senegal as of 2011 [1]. Zidisha facilitates loans to low-income, computer-literate entrepreneurs in developing countries.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Governor Explains Delay in Microfinance Regulatory Framework
Central Bank of Nigeria (CBN) Governor Mallam Sanusi Lamido Sanusi has reportedly explained the delay in the release a proposed microfinance regulatory framework saying, “if we are going to have 2,000 microfinance institutions, I want to know that we have the capacity to regulate and supervise those institutions” [1].
MICROCAPITAL BRIEF: Applications Open for European Union/Africa, the Caribbean and Pacific (EU/ACP) Microfinance Scholarships for Boulder Microfinance Training Programme 2011
The European Union/Africa, the Caribbean and Pacific (ACP) Microfinance Program is offering scholarships for ACP policymakers to participate in the Boulder Microfinance Training Program that will take place in Turin, Italy, from July 18 to August 5, 2011 [1]. The scholarship, worth EUR 3,100 (USD 4,200), will cover tuition for the three weeks of training [1]. The scholarship does not cover accommodation or travel expenses. Candidates must be policymakers such as staff members of central banks or other ministries or supervisory bodies that create or implement policies that impact access to finance within ACP [1]. The Boulder Microfinance Training Programme covers topics such as agricultural and rural finance, analyzing microfinance institution (MFI) performance, branchless banking, business planning, financial risk management, microinsurance and integrating social performance into microfinance management and reporting.
MICROCAPITAL BRIEF: India’s Business Standard Reports a Third of Indian Banks’ Loans to Microfinance Institutions (MFIs) in Restructuring, Which Analysts Argue is Inadequate to Solve Sector Issues
The Business Standard, an Indian financial newspaper, recently reported that a third of the loans made by Indian banks’ to microfinance institutions (MFIs) are in the process of being structured, due to the MFIs inability to repay following the turmoil in the sector in the state of Andhra Pradesh that began in late 2010. According to a report by the Malegam Committee, a sub-committee of the Reserve Bank of India, as of March 2010 approximately INR 138 billion (USD 3.06 billion) in loans were outstanding to MFIs from the Small Industries Development Bank of India, a government-owned bank providing credit to medium and large-scale MFIs and other banks. The report also stated that banks hold an additional INR 42 billion (USD 932 million) in securitized paper from MFIs.