A Rwandan taskforce consisting of officials from the justice, local government and internal security ministries, as well as the National Bank of Rwanda (often abbreviated to the French acronym BNR) and the directorate of Public Prosecution, has reportedly blamed the national police force for delays in the recovery of RWF 7.2 billion (USD 12 million) from microfinance borrowers who have failed to repay their loans. So far, RWF 22 million (USD 36,700) of the outstanding funds has been collected.
Category: Trends/Challenges
MICROCAPITAL BRIEF: Advans SA Launches Microfinance Institution (MFI) Advans Bank Tanzania in Dar es Salaam
Advans SA, a microfinance investment vehicle (MIV) registered in Luxembourg, recently announced the launch of Advans Bank Tanzania in Dar es Salaam. As reported by MicroCapital in November, 2010, the new microfinance institution (MFI) will offer products such as loans to small and medium-sized enterprises (SMEs), savings accounts in local and foreign currencies and domestic money transfers.
MICROCAPITAL BRIEF: ACCION Microfinanças of Manaus, Brazil Begins Disbursing Microfinance Loans
ACCION Microfinanças, a microfinance institution (MFI) operating in Brazil as a subsidiary of US-based nonprofit ACCION International, recently disbursed its first loan. Officially established in December 2010, ACCION Microfinanças aims support to poor people and small and medium-sized enterprises (SMEs) in the Amazon region through access to microcredit.
MICROCAPITAL BRIEF: Microfinance Center (MFC) for Central and Eastern Europe and the New Independent States Announces Launch of Social Performance Start-Up Fund
The Microfinance Center (MFC) for Central and Eastern Europe and the New Independent States, an international network of approximately 110 microfinance institutions (MFIs), recently announced the launch of its Social Performance Start-up Fund, a facility that aims to provide technical and financial assistance to regional- and country- level microfinance networks that are looking to address social performance.
MICROCAPITAL BRIEF: ACCION International’s Smart Campaign to Launch Certification Program for Client Protection in Microfinance
The Smart Campaign, a global initiative to improve accountability regarding client protection in the microfinance industry, recently announced a plan to launch a certification process that will enable microfinance institutions (MFIs) worldwide to verify their commitment to the Campaign’s core “Client Protection Principles” through third-party assessors.
MICROFINANCE PAPER WRAP-UP: Microfinance Banana Skins 2011, the CSFI Survey of Microfinance Risk, by David Lascelles and Sam Mendelson, Published by Centre for the Study of Financial Innovation (CSFI)
By David Lascelles and Sam Mendelson, published by the Centre for the Study of Financial Innovation, February 2011, 48 pages, available at: http://www.cgap.org/gm/document-1.9.49643/Microfinance_Banana_Skins_2011.pdf
MICROCAPITAL BRIEF: Malegam Committee Report on Microfinance Regulation in India Fails to Meet Expectations, Argues Sriram
On the website “livemint.com”, an Indian partner of the US-based Wall Street Journal, independent researcher MS Sriram presented his evaluation of the recommendations issued in response to the crisis in the microfinance sector in Andhra Pradesh by the Malegam Committee of the Reserve Bank of India (RBI). While he argues that the report has some positive aspects, he states that it largely fails to deliver.
MICROCAPITAL BRIEF: As Commercial Banks Remain Wary, Indian Microfinance Institutions (MFIs) Look Beyond Andhra Pradesh for New Markets
Following the promulgation of the Andhra Pradesh Micro Finance (Regulation of Money Lending) Act, which includes provisions intended to curtail coercive collections practices by microfinance institutions (MFIs) and their agents, many MFIs are considering cutting back their operations in Andhra Pradesh in favor of seeking expansion in other prospective markets [1].
MICROCAPITAL BRIEF: Centre for the Study of Financial Innovation (CSFI) Publishes “Including Africa – beyond microfinance” Report, a Paper on Improving Financial Inclusion in Africa
The Centre for the Study of Financial Innovation (CSFI), a nonprofit think tank that was established in the United Kingdom in 1993, recently released “Including Africa – beyond microfinance”, a report that emphasizes the future potential role of the commercial banking and mobile phone industries in providing greater financial inclusion for low-income households in Africa [1].
MICROFINANCE PAPER WRAP-UP: What is the Impact of Microfinance on Poor People? A Systematic Review of Evidence from Sub-Saharan Africa; by Ruth Stewart, Carina van Rooyen, Kelly Dickson, Mabolaeng Majoro and Thea de Wet; Published by Evidence for Policy and Practice Information and Coordinating Centre (EPPI-Centre)
By Ruth Stewart, Carina van Rooyen, Kelly Dickson, Mabolaeng Majoro and Thea de Wet; Published by Evidence for Policy and Practice Information and Coordinating Centre (EPPI-Centre);
Funded by the Department for International Development (DFID); 2010; 104 pages; available at http://eppi.ioe.ac.uk/cms/LinkClick.aspx?fileticket=FM4Kv2S%2fRyU%3d&tabid=53&mid=2009&language=en-US
MICROCAPITAL BRIEF: Al Amal Bank of Yemen Wins Islamic Microfinance Challenge 2010
Al Amal Bank, a microfinance bank in Yemen, will be awarded USD 104,000 for winning the Islamic Microfinance Challenge 2010, a contest that promotes the design of Shariah-compliant products for Islamic microfinance clients. Al Amal’s proposal for the competition was to test-run an Islamic leasing product, funding the pilot through its Islamic investment product and achieving operational and financial sustainability by 2012.
MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Proposal A Positive Step, Argues Tripathi… But Andhra Pradesh Government Oversteps
Salil Tripathi, director of policy at the British nonprofit Institute for Human Rights and Business, argues through the “Poverty matters blog” on the website of the UK’s Guardian newspaper that, while recent Reserve Bank of India (RBI) regulation is a positive step for the future of microfinance, the legislation passed by the state government of Andhra Pradesh reflects a monopolistic tendency. Mr Tripathi states that the move by local officials favors its own lending activities through self-help groups (SHGs) while it restricts the role of the private sector. On the other hand, he argues that the regulation suggested by RBI, while reducing choice and access to finance for the poor to a certain extent, is actually intended to protect the interests of the poorest [1].
MICROCAPITAL BRIEF: Farz Foundation Hosts First National Islamic Microfinance Conference in Lahore, Pakistan, Promotes Farz Methodology
The Farz Foundation, an Islamic microfinance institution (MFI) based in Pakistan, recently hosted the first National Islamic Microfinance Conference in Lahore, Pakistan, in an effort to develop solutions for the microfinance industry in Pakistan.
MICROCAPITAL BRIEF: Microfinance Banks Ask Central Bank of Nigeria for Six More Months to Meet Tightened Licensing Requirements
Microfinance banks in Nigeria have entered negotiations with the Central Bank of Nigeria (CBN) to extend by six months their grace period to operate with provisional licenses [1].
MICROCAPITAL BRIEF: ACCION’s Centre for Financial Inclusion Offers Lessons Learned from Nicaraguan Microfinance Crunch, Reiterates Six-Point Agenda For “Recalibration” of Industry Worldwide
The Centre for Financial Inclusion, a division of US-based nonprofit ACCION International, recently released an overview of lessons that can be taken from the Nicaraguan microfinance downturn. Triggered by a combination of the global economic downturn and the “No Pago” (No Payment) Movement, which was encouraged by the Nicaraguan government, the result was a reduction in the aggregate microloan portfolio from USD 420 million in 2008 to USD 170 million in 2011, a fall in the number of clients served from 324,000 to 225,000 and estimated portfolio at risk rising to 19 percent [1].
MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Explores Over-Indebtedness in Microfinance Through New Blog Series
CGAP (Consultative Group to Assist the Poor), an independent policy and research center housed at the World Bank, recently launched a series of entries on its microfinance blog to facilitate discussions on over-indebtedness. The series aims to offer weekly articles posted by experts involved in research and practice.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Reviews Efforts to Encourage Microfinance, Discusses Challenges
The Central Bank of Nigeria (CBN), Nigeria’s central banking authority, has provided an overview of the bank’s strategies that have been implemented thus far in efforts to aid in the growth of the microfinance sector of the country. These include the establishment of: the Microfinance Advisory Board (MAB) in 2005 to coordinate stakeholder interventions in microfinance; National Microfinance Policy Consultative Committee (NMFPCC) in 2006 to aid in implementing policy; Inter-Agency Technical Committee on the Implementation of the Microfinance Policy to address technical issues related to policy implementation; and the Entrepreneurship Development Centres in Lagos, Onitsha and Kano in 2008 to assist in the capacity building of microfinance institutions (MFIs).
MICROCAPITAL BRIEF: MicroSave’s India Focus Notes Examines Microfinance Turmoil in Andhra Pradesh
MicroSave, a private consulting company that provides technical assistance to microfinance institutions (MFIs), recently published a series of papers that examine the trouble that has arisen in microfinance in the Indian state of Andhra Pradesh since late 2010.