Compounding this problem, is the poor and rural population’s lack of knowledge about insurance.  Therefore, education becomes an additional component of offering insurance products to the poor.  Marketing efforts must be tailored to the target market and policies must be created with clear and concise wording.

In an effort to increase the supploy of microinsurance, Mike Ikupolati, Director General at the West African Insurance Institute, suggests that insurance companies set up by mutuals or cooperative societies are better prepared to serve the low income market.  These organizations provide insurance services to their members and sometimes to other non-members.  ”They provide reduced premiums on policies and allow installment payments of premiums, which are collected more regularly than done under the conventional insurance policies.”  Another alternative to traditional insurance product distribution is a model where a traditional insurance company extends services to the poor through small scale loan guarantee policies, credit guarantee policies, retirement policies for the self-employed, and injury coverage. 

Josephine Amaoh, Commissioner for Insurance in Ghana, has observed that insurance products have better penetration of the low income market when they are offered through alternative distribution channels such as microfinance institutions, community organizations, retailers, churches, and cell phone companies.  Last month, MicroCapital reported that Vikram Akula, Founder of Indian MFI SKS Microfinance, decided to step down as CEO in order to devote his attention to microinsurance.

By Iyanna Holmes, Research Assistant

Additional Resources:

AllAfrica.com: West Africa: How to Make Micro-Insurance Work in the Region 

Business Day:  Developing Micro-Insurance Through Co-Operative Societies 

MICROCAPITAL STORY:  November 17, 2008, Vikram Akula to Step Down as CEO of SKS Microfinance

CashNetUSA allows its customers to apply online for financial products that a recent MarketWatch story labeled “micro-loans.” Applicants must have an active checking account, have been employed for at least one month, be a US citizen or permanent resident, and be at least 18 years of age. The company website claims four out of five applicants are approved instantly. New customers are eligible to receive a loan of up to USD 750, while repeat customers can receive up to USD 1,500. The size of the initial principal amount for which a customer is eligible is determined largely by that customer’s state laws, in addition to his or her financial information. CashNetUSA claims that those who apply by 9pm CST, Monday through Thursday, can receive their funds on the following business day. Applicants who apply by 7pm CST between Friday and Sunday can receive their funds by Monday. The exact times for funds transfers are determined by the Automated Clearing House (ACH) system, a private electronic payment network between banks. Repayment reminders are sent out via e-mail one to two days prior to a loan due date, and repayment can occur in full, for extended periods, or through partial payments.

DataX’s consumer credit reporting service was developed specifically to inform markets traditionally underserved by formal credit bureaus. DataX already provides data validation services for improving the efficiency of its clients’ database-dependent business operations, identity authentication services for preventing business fraud, and personal finance verification services that enable businesses to check the status of their clients’ bank accounts and credit card accounts in real time. Combining these existing services with credit data available through the ACH system, DataX claims it can collect an accurate daily update of the total loans funded by CashNetUSA and other financial companies, in addition to the detailed payment histories of these companies’ customers. DataX hopes to provide lenders with advance warning of a client’s insolvency and to reduce the incidence of bad loans to clients that have exhibited poor payment performance in the past or clients that have engaged in fraudulent activities. Utilizing a client’s borrowing-and-payment history as provided by DataX, CashNetUSA hopes to further refine its underwriting and decisioning systems and thereby maintain its “fair and equitable” lending practices for online consumers. These clients, should they become borrowers, alleges CashNetUSA President Timothy Ho, will benefit from the new credit-building opportunities provided by the information exchange.

This new relationship between CashNetUSA and DataX may portend similar international innovations in the collection of financial data, the regulation of micro-lending organizations, and the transmission of funds. In the future, it may be possible for microfinance institutions (MFIs) to lend online with the aid of data collection and management organizations like DataX. This would require, however, that financial reports on micro-borrowers be available at least to the degree of accuracy and detail exhibited by DataX’s reports, which show, according to MarketWatch, an “unprecedented level of quality and detail.” As the first micro-loan reporting agency compliant with the United States’ Fair Credit Reporting Act (FCRA), DataX has also shown that more detailed data services may better allow microfinance to come under the purview of an American regulatory body, whose international analogues might better protect microlending markets abroad in the near future. Finally, DataX may augur the development of electronic fund transfers and repayment schemes for some international micro-borrowers, and perhaps even the growth of individual financing vis-à-vis the group-lending models that have traditionally driven the operations of microfinance institutions such as the Grameen Bank and ACCION International.

Established in 2004 and headquartered in Chicago, Illinois, CashNetUSA offers loans in over 30 US states and the UK and claims over 2 million customers. It is a subsidiary of Cash American International Inc., a publicly-traded commercial short-term lender (NYSE: CSH) based in Fort Worth, Texas, that serves the underbanked segment of the population. As of November 27, 2008, current market capitalization of CSH stands at USD 747.63 million. CSH’s return on equity is 16.40 percent, and its return on assets is 8.40 percent.

Founded in Las Vegas, Nevada, DataX, Ltd., has provided since 2004 credit reporting and real-time verification of consumer data and authentication services to specialty finance companies. DataX employs proprietary technology for verifying, correcting, and enhancing webform data and operates an FCRA-compliant consumer credit reporting service. DataX is a subsidiary of Selling Source LLC, which provides specialty finance lenders with a number of data-gathering services covering various phases in the lifetime of a loan. Selling Source was named number 68 on the 2008 Incorporated 500 list, a list f the fastest growing private companies in the United States. DataX’s financial statements are not available on the company website.

Additional Resources:

CashNetUSA

DataX, Ltd.

DataX Credit Reporting Agency

ComputerWorld: Automated Clearing House

DataX, Ltd.: Credit Reporting Agency (CRA)

MarketWatch: Cash America International, Inc. (NYSE: CSH)

MarketWatch: “CashNetUSA Selects DataX as a Provider of Real Time, Transaction Based Credit Reporting”

Selling Source LLC

Original news wire here.

Being more “closely” related to the “real economy”, micro finance holds the advantage of managing the challenges that the current situation offers better, Jack Lowe, President, BlueOrchard Finace S.A. United States, told Emirates Business.

This region, where micro finance has a penetration of less than 10 percent so far, holds tremendous potential. As Arab investors get to tap into micro finance, it would result in more MFIs in this region reach out to small borrowers and help in building wealth and alleviating poverty, said Lowe.

“For investors in this region, investing in micro finance provides an opportunity to earn returns and contribute their bit to the society at the same time. Micro finance is on its way to become a true asset class,” added Lowe.

More than 100 investors, leading financial experts and representatives from investment-ready Arab microfinance institutions (MFIs,) got together at the First Arab Microfinance Investment Symposium.

The UAE Ministry of Economy has been assigned the task of launching a strategy to develop a programme to support and finance micro and small businesses to be set up in the UAE, said symposium organiser Grameen-Jameel, the first social business in the Arab World.

The task, that has been assigned by the Cabinet and is to be executed in co-operation with the Central Bank, aims to improve the livelihood of many Emirati families across the country with a focus on supporting women, youth, and pensioners who are eager to improve their economic and social environment, it said.

A meeting took place last week among officials from the UAE Ministry of Economy and the Central Bank and Grameen-Jameel to explore co-operation possibilities. The meeting highlighted the importance of a number of issues to tackle, focusing on applicable structures suitable to the UAE Government, licensing and regulatory issues, and educational programmes.

In addressing all those issues, a suggestion to organise a national market study has been favoured by those attending the meeting. “We want to extend our reach to as many new places as possible. We are active in 42 countries and this region is diverse and we see a great potential here,” said Lowe, adding: “business-oriented” approach of MFIs enabled them to stay profitable.

As a lender to perform in the micro finance skills like money raising, analytical and investment talent, market intelligence and prospecting and skills to run a far flung geographic spread of institutions were needed, he said.

Heather Henyon, General Manager, Grameen-Jameel said: “The size of micro finance market at the end of 2007 was USD 5.3 billion (Dh19.4bn) but only four per cent of the demand was met. “This leaves a potential of an untapped market of 96 per cent,” she added.

Quoting a study by Consultative Group to Assist the Poor (CGAP), Henyon said more than USD 800 million of financing had been raised in the Arab region, 50 percent of which was from commercial bank lenders.

Oslo, Norway, December 2 - The Norwegian Microfinance Initiative (NMI) today announced the formation of its two investment funds: NMI Global Fund and NMI Frontier Fund. NMI is a new and unique strategic partnership between the Norwegian public and private sectors. NMI will seek to contribute to the empowerment of poor people and to the creation of jobs, wealth, and economic and social sustainability in developing countries by providing financing directly and indirectly for microfinance institutions (MFIs).
NMI Global Fund will focus its investments on more mature microfinance institutions in selected regions and developing countries. Its primary thrust will be to support and encourage the rapid growth of these institutions, particularly where they seek to penetrate new markets and geographic areas and to provide additional products and services to new and existing clients. As a general matter, NMI Global Fund will invest through other investment funds and in partnership with other fund managers.

NMI Frontier Fund will invest primarily in young and emerging MFIs and in the development of new financial products and services that can benefit poor and low income people. NMI Frontier Fund will restrict its activities to a limited number of countries where many poor and low income people live. It will seek to assure that many of the world’s poorest people have broader access to a broader range of financial services. NMI Frontier Fund will invest directly in young and emerging MFIs as well as in other funds and in partnership with other fund managers. The Frontier Fund will frequently make equity investments in portfolio companies and will seek to play an active role as an investor.

The total capital committed to NMI Global Fund and NMI Frontier Fund is approximately USD 100 million (NOK 600 million). Norfund, a development finance institution owned by the Government of Norway, has committed one half of this total funding, and the private sector partners have committed the balance. The private sector partners are DnB NOR (through its Vital insurance and asset management subsidiary), Ferd, KLP and Storebrand. Each of these investors brings considerable investment and financial services industry experience to NMI and will be represented on NMI’s Board and Investment Committees. NMI will also be able to provide professional and technical assistance to its support its portfolio companies through the NMI Professional Assistance Facility. This special facility will be funded through NORAD, the Norwegian Government’s international development agency, and administered by NMI.

NMI has recently appointed Richard Weingarten to be the Managing Director of NMI. Mr. Weingarten was most recently the Executive Secretary of the United Nations Capital Development Fund (UNCDF). UNCDF is an independent investment fund affiliated with the United Nations Development Programme. UNCDF makes investments in the Least Developed Countries and helps these countries to build inclusive financial sectors in part by investing in young and emerging MFIs. Prior to joining UNCDF, Mr. Weingarten was the Senior Vice-President for Finance and Development at the College Board, a not-for-profit organization in New York City that has more than 3500 colleges and universities as its members. Mr. Weingarten was also a Managing Director of Bear Stearns & Co., Inc. and the Director of Corporate Finance for the Southeastern Region of the United States. Mr. Weingarten has extensive background in investment banking, venture capital, and law, and he has provided financial advisory services and worked in management positions in both the private and not-for-profit sectors on a global basis. Mr. Weingarten has a Bachelor of Arts from Yale University and a Juris Doctor from the Antioch School of Law.

]]> http://www.microcapital.org/press-release-norwegian-microfinance-initiative-establishes-nmi-global-and-frontier-funds/feed/ http://www.microcapital.org/microcapital-excerpt-brigham-young-university%e2%80%99s-economic-self-reliance-center-leverages-microfinance-against-poverty-through-its-public-advocacy-its-journal-of-microfinance-and-its-esr-rev/ http://www.microcapital.org/microcapital-excerpt-brigham-young-university%e2%80%99s-economic-self-reliance-center-leverages-microfinance-against-poverty-through-its-public-advocacy-its-journal-of-microfinance-and-its-esr-rev/#comments Wed, 03 Dec 2008 05:09:03 +0000 Jeffrey Erfe http://www.microcapital.org/?p=2787 ‘In God We Trust’: A Qualitative Study of Church-Sponsored Microfinance at the Margins in Nicaragua
by Michael J. Pisani

A qualitative study of CARITAS Matagalpa was undertaken in May 2003. CARITAS Matagalpa is a large, self-sustaining microfinance institution that is located in central Nicaragua and affiliated with Catholic Relief Services. In-depth interviews with 36 microentrepreneurs, all clients of CARITAS Matagalpa, reveal that access to microfinance has enabled these entrepreneurs to start, expand, and develop their enterprises. These interviews also reveal that access to microfinance has also enhanced the life chances of the microentrepreneurs’ households. Additionally, multivariate statistical tests suggest the following: (1) Loan size is directly related to urban location and length of repayment period. (2) The degree of firm-level informality diminishes in urban areas and increases relative to the work experience of the microentrepreneur. (3) Income for self-employed microentrepreneurs is influenced by business sales volume, work experience, number of employees, and loan size. 

Microentrepreneurship and Job Creation
by James O. Bates

This multiple-case study explores local government’s use of HUDfunded microenterprise development assistance for job creation and selfemployment of low-to-moderate-income individuals. Respondent information was reviewed and then supplemented with document analysis and interview materials from earlier research on HUD microenterprise development assistance programs in upstate New York. Because the number of local government respondents who self-identified as providers of microenterprise development assistance was small, it was not possible to generalize research findings to the overall public microenterprise development sector. However, the study of this phenomenon, although limited, does have implications for government microfinance instrumentalities and intermediaries and for future research on publicsector microenterprise development efforts. Based on the participants’ self-report, it appears that both urban and rural HUD-sponsored microenterprise development assistance programs create jobs and self-employment opportunities for low-to-moderate-income persons using a myriad of strategies.

Data Standards for Connecting to Commercial Sources of Capital
by James Dailey

The importance of data interchange between commercial sources of capital and the microfinance sector is generally acknowledged, if not well detailed. But microfinance institutions (MFIs) and commercial sources of capital often need a different depth and breadth of information. As the industry grows and accesses more commercial capital, there is a need to enable standardized reporting from multiple MFIs to multiple sources of capital, rather than a proliferation of one-to-one re porting relationships. IT professionals and managers of microfinance institutions need to recognize this need and push vendors and industry associations to agree on specific standards of data elements, quality, and transmission protocols. This paper aims to provide the reader with a grasp of the issues involved and to recommend a sample set of data standards for MFIs to use in communicating with commercial sources of capital.

Nurturing Joint Forest Management Through Microfinance
by K. K. Kaushal and J. C. Kala

India has embarked upon a community involvement process to restock the state-owned forests through a recent approach called Joint Forest Management. But the success of the Joint Forest Management program lies in the provision of alternative livelihoods to woodcutters and grazers. This article presents how the forest department of a southern state of India devised a potent tool of microfinance promotion for weaning those who are dependent on the forest by implementing a massive externally aided Joint Forest Management Project. Based on a study of 27 program villages in the Tamilnadu state, this paper proves that the success of Joint Forest Management is dependent on and directly linked to the provision of microfinance to villagers through a people’s representative body—the Village Forest Council. The forest department was successful in this unusual task of promoting microfinance even in villages where formal microfinance institutions have failed, which corroborates an earlier finding that microfinance is more workable and successful if it is properly packaged in a locally suitable development program.

Building Economic Self-Reliance
by Jan Maes and Malika Basu

The Trickle Up Program is a US-based organization engaged in microenterprise development for very poor households in 14 core countries, including India. Because it targets the most vulnerable sections of the population, such as the rural landless, women-led households, people with disabilities, and economically disadvantaged minorities, TUP employs a seed capital grant strategy to facilitate its clients’ movement from absolute poverty toward economic self-reliance. TUP clients cannot risk taking a loan because they have no spare income to make payments if their enterprises do not generate an immediate profit. A conditional grant, in contrast to credit, exposes its recipients to less risk and allows them to grow a business with a longer payback period. This paper draws from a recent study of the Alternative for Rural Movement, one of TUP’s partner agencies in rural Orissa, India, and shows that its TUP clients moved successfully from a position of extreme vulnerability to one of significantly improved economic self-reliance.

Microfinance and Rural Development
by Henk A. J. Moll

The long-term perspective on microfinance starts with a discussion of three central issues: first, views and policies, with two opposing views: “credit for target group” and “pushing the financial frontier”; second, the performance of microfinance institutions measured via two objectives: outreach and financial sustainability; third, microfinance and rural development. This latter issue is approached through analyses of the effects of financial services on rural households and analyses of long term national financial development. Both micro and macro studies show positive effects of an expansion of savings and lending services, financial deepening. The negative side of financial deepening, the apparently unavoidable occurrence of bank insolvancies, is also reviewed. The concluding section argues that the microfinance sector should be guided by “stability and expansion”: stability to withstand shocks and to maintain the relationships established between rural households and microfinance institutions, and expansion to include more people within the financial frontier.

Book Review
by Richard Norton

The Private Sector in Development: Entrepreneurship, Regulation, and Competitive Disciplines, by Michael U. Klein and Bita Hadjimichael.

Today’s microfinance industry is stepping beyond charitable subsidies toward commercialization, from dependency towards self-reliance. To speed and systemize the eradication of poverty, private capital has become more crucial for microfinance institutions (MFIs). In their book, The Private Sector in Development: Entrepreneurship, Regulation, and Competitive Disciplines, Michael U. Klein and Bita Hadjimichael encourage practitioners and policy makers to enhance the private sector’s role in a broad range of areas that impact development.

Commercializing Microfinance and Deepening Outreach
by Francisco Olivares-Polanco

Does commercialization mean mission drift? Christen (2001) argues that commercialization, which is characterized by profitability, competition, and regulation, does not have any effect on large differences in loan size between regulated and nonregulated MFIs. I used data from 28 Latin American MFIs to conduct a multiple regression analysis to test for some of Christen’s conclusions, as well as for other factors that, according to the literature on microfinance, may affect loan size. The results of the regression indicate first that the type of institution, in terms of NGO versus financial institution, regardless of being regulated or not, has no effect on loan size. Second, the age of the institution predicts loan size in a direction contrary to that suggested by Christen. Third, competition turned out to be significant, in contradiction to Christen’s conclusion; it appears that more competition may lead to larger loan sizes and less depth of outreach. Finally, the models confirm an old belief in microfinance: there is a trade-off between depth and sustainability.

Microfinance Institutions in Transition
by Michael Tucker and Winston Tellis

Microfinance institutions (MFIs) established to provide the poor with access to capital have typically operated outside of their countries’ regulated banking environments. Many have relied on donor grants and low-interest funds to support loan portfolios and social programs. As MFIs mature they aspire to become more efficient and attain economic sustainability because they understand that greater numbers of the poor can be serviced by economically sustainable institutions. Many MFIs collect savings deposits but are often barred from using them for loans by their countries’ laws. Fonkoze, an MFI in Haiti, has sought regulated status, which would provide access to deposit assets and enable Fonkoze to better compete with other MFIs, some of which are regulated subsidiaries of commercial banks. In the midst of political and economic turmoil, Haiti’s Central Bank has delayed Fonkoze’s transformation. A different solution is now moving forward, with Fonkoze becoming two entities, Fonkoze Financial Services and Fonkoze Foundation.

DECEMBER 10, 2008, 4:00PM

THE QED GROUP, LLC, 1250 EYE STREET NW, 11TH FLOOR, WASHINGTON, DC, 20005

microLINKS will host a discussion on the impact of the current global financial crisis on microfinance institutions and their clients.  microLINKS is a knowledge-sharing suite of applications and tools designed to improve the impact of United States Agency for International Development (USAID) microenterprise programs and activities.  The QED Group is a U.S.-based consulting firm that focuses on finding solutions to social problems.  QED works with public, private, non-profit, and international clients.  The discussion will be moderated by Martin Holtmann, head of the International Finance Corporation’s Microfinance Group. Additional speakers include:

Eliza Erikson, Microfinance Portfolio Manager, Calvert Foundation

Monica Brand, Principal Director of ACCION Global Investments

John Wasielewski, Director of USAID’s Office of Development Credit

There is no cost to attend, however space is limited.  To reserve a seat, RSVP to afterhours@qedgroupllc.com.  In addition to attending in person, interested parties may register for the webinar by clicking here or access the call-in only instructions by clicking here.

Margarita Correa, General Manager of WWB Medellin, said, “IFC’s renewed support will allow us to extend services to 2,000 new clients and address gaps in formal financing for local microenterprises, many of which are managed by women.”

WWB Medellin is member of the Women’s World Banking Network.  The company was founded in 1985 and became an affiliate of the Women’s World Network in 1987.  As of December 2007, the company had over 66,000 active borrowers and USD 68.2 million in loans outstanding.  Earlier this year, MicroCapital reported on a Women’s World Banking study that found that once an MFI is “transformed” (morphed from being a non-profit lender to a regulated financial institution), the proportion of women that the MFI serves drops on average from 88 percent to 60 percent. 

The International Finance Corporation is an intergovernmental organization launched in 1956.  It is a member of the World Bank Group and its main objective is the promotion of private enterprise.  The IFC finances private sector investment, mobilizes capital in the international financial markets, and provides advisory services to businesses and governments.  For the fiscal year ending June 2008, IFC reported total assets of USD 49.5 billion.

By Iyanna Holmes, Research Assistant

Additional Resources:

IFC Press Release:  IFC Supports Expansion of Microfinance Institution in Colombia

International Finance Corporation

MICROFINANCE PAPER WRAP-UP:  April 22, 2008, Stemming the Tide of Mission Drift: Microfinance and the Double Bottom Line, by Christina Frank

MIX Market: WWB Medellin

Under the agreement, a member of the Informal Sector Fund will be permitted to use their account balance, or their new Occupational Scheme Accounts, to secure a loan from Baofo Microfinance. Dr. Sapara-Grant explained that these accounts were the result of the collaborative effort between the SSNIT, HFC and Boafo to create a credit scheme for members of the SSNIT Informal Sector Fund that is in line with the design of the informal sector scheme but further details of these accounts were not disclosed. Members of the fund are permitted to make periodic withdrawals from the scheme, while 50 percent of the person’s contribution would be used as a retirement account for the individual members. The total membership of SSNIT’s Informal Sector totals over 20 thousand throughout four branches, and contributions to its Informal Sector total over GH¢ 1.8 million (USD 1.5 million). Dr. Sapara-Grant promised to increase the fund’s members to two million in the short term to enable more people to benefit from the scheme.

The SSNIT will recruit members from the informal sector, open occupational scheme accounts (OSAs) for them and ensure that they maintain contributions to their respective accounts. The SSNIT will also provide loan capital to Boafo Microfinance where possible. Boafo will create loan products for members of the SSNIT Informal Fund and evaluate “their capacity to borrow, originate and service loans” as well as further mobilize contributions through loan repayment. HFC Bank will provide loan capital, provide a banking network for contributions, as well as use its branches to facilitate the disbursement of loans, repayment of loans, and collection of contributions from members. Boafo Microfinance Services will use two of its existing loan products for the scheme. The Busy Bee loan is aimed at microenterprises and averages between USD 1 and 3 thousand. Clients can pay a fee to have Boafo staff collect loan payments on a daily basis. The Home Improvement Loans are housing loans, to be used specifically for buying land, building a structure, improving fittings, adding utilities or finishing a home.

The Social Security and National Insurance Trust (SSNIT) is a statutory public trust established in 1972 to administer the National Social Security Scheme. Its mission is to provide innovative income replacement schemes to Ghanaian workers and their dependents in the event of old age, permanent disability or death. The Trust is currently the largest non-bank financial institution in the country and has a registered membership of approximately one million with over 58 thousand pensioners who currently collect their monthly pension from SSNIT. The two major objectives for its investments are to maintain a long term optimum fund ratio and to make investments which are development oriented, including contribution to economic development and to “galvanize” investment in the informal sector.

HFC Bank Ghana limited was licensed in 2003 to provide banking services to its valued customers. It evolved from a mortgage finance institution with mortgage financing as its core business. Its principal activities include mortgage financing, commercial banking and investment banking services. At the end of 2007 its total assets stood at GH¢ 160 million (USD 137 million). HFC Bank currently has fifteen branches and offices throughout Ghana, but predicts that by the end of 2009 they will expand to cover all regions of Ghana.

Boafo Microfinance Services Limited is a microfinance institution established in 2007 by HFC Bank Ghana Limited and CHF International. It was created to address a market niche by providing housing and enterprise microfinance loans to households living and working in three informal settlements in Ghana. Funding for Boafo was initially provided by HFC Bank, CHF International, Global Development Alliance (GDA) of the United States Agency for International Development (USAID) and the United Nations Slum Upgrading Facility (SUF). In August 2007, four months after its establishment, Boafo had an outstanding loan portfolio of USD 1.1 million with 450 borrowers. CHF International intends to grow to have a loan portfolio of USD 4 million by 2010, including USD 1 million in housing loans. Although there is no recent information available on the progress of Boafo, HFC and CHF International had intended for Boafo to act as a pilot that could be replicated in other West African countries after an unspecified number of years.

By Lori Curtis, Research Assistant

Additional Reading:

Daily Guide: “Credit Scheme for SSNIT Informal Sector Members”

Ghanaian Chronicle: “SSNIT Informal Sector Fund signs tripartite agreement”

Social Security and National Insurance Trust: “Home” “At a Glance” “Investments” “Informal Sector”

HFC Bank: “Home” “About Us” “Annual Report for Year Ended Dec 2007”

MicroCapital Story: “CHF International and Ghana’s HFC Bank Creation, Boafo Microfinance Services Ltd, Begins Microcredit Loans”

CHF International: “Ghana: Boafo Microfinance Services Ltd.”

USAID: “Home” “Global Development Alliance“

The program which for which the Social Enterprise of the Year recognition is bestowed is Mercy Corps’ MAXIS (Maximizing Financial Access and Innovation at Scale) program, which was created with funding from the Bill and Melinda Gates Foundation in June 2008 and whose launch was covered in this MicroCapital story. Through MAXIS Mercy Corps has built the bank of banks (BoB) which provides financial products and services to thousands of MFIs, and a partnership with BoB enables MFIs to provide diversified products such as micro insurance, remittances, mortgage finance and mobile phone banking. MAXIS works to expand the access of low income people to microfinance in Indonesia and the Philippines by using working with MICRA (Microfinance Innovation Center for Resources and Alternatives) to build capacity, transparency and performance. MICRA is an Indonesian foundation established by Mercy Corps in 2006 to “in order to institutionalize and expand its work over the past six years in microfinance throughout Indonesia”. MICRA’s role in MAXIS is to build MFI performance, conduct market and product research and perform ratings for transparency and performance.

Mercy Corps is an Oregan-based anti-poverty organization which began in 1979 as Save The Refugees Fund, and was incorporated in 1982 as Mercy Corps International. They began lending money in 1989 which later evolved into the creation of MFIs, and Mercy Corps has formally offered microfinance services since 1997. Mercy Corps and its twelve partner institutions have disbursed over USD 1 billion in 1.17 million loans. They have over 209 thousand active clients, 59 percent of which are women with USD 267 million in outstanding loans. The total assets of Mercy Corps and its partner institutions for microfinance in 2007 stood at USD 329 million and total equity was USD 53 million. In addition to the above mentioned MAXIM program and partner institutions, Mercy Corps has also created the Pheonix Fund, which gathers privately raised seed capital to underwrite high-risk, high-reward projects in developing countries. The total assets of Mercy Corps alone are reported as USD 187 million for 2007.

Fast Company is a business magazine owned and published by Mansueto Ventures LLC which also publishes Inc. and was founded in 2005. Fast Company caters to creative professional and attempts to identify new best practices and help “a new breed of leader work smarter and more effectively”. Fast Company reported a total paid circulation base of over 749 thousand in 2007, with newsstand sales at over 30 thousand, and has been among the top ten fastest growing newsstand titles for the last three consecutive reporting periods.

Additional Reading:

The Oregonian: “Mercy Corps’ microfinance program gets recognition”

Fast Company: “Eureka!: Social Enterprises of the Year” “Social Capitalists: Mercy Corps, 45 Social Entrepreneurs Who Are Changing the World” “Mercy Corps: The Bank of Banks”

MICRA: Home

MicroCapital Story: “Mercy Corps Buys a Commercial Bank in Bali to Service the Microfinance Sector in Indonesia”

Mercy Corps: “Home” “2007 Annual Report”

Pondicherry University’s Commerce Department will host an “International Conference on Microfinance” with support from various Indian agencies, including the National Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of India (SIDBI), and the National Institute of Rural Development (NIRD). The conference will be held at the Department of Commerce in the School of Management of Pondicherry University in Puducherry, India.  University researchers, banking professionals, and representatives from non-governmental agencies (NGOs) and microfinance institutions (MFIs) are welcome to attend. 

The conference aims to:

• evolve strategies for sustaining insurance, savings, and credit to eradicate poverty
• ensure overall development of India
• promote collaboration among national and international research centers working on microfinance
• spur public education programs and community participation in microfinance
• enable discussion among administrators, policymakers, NGOs and the public with respect to sound microfinance policies

The following topics will be discussed at the conference:

• the status of the microfinance sector and the emerging role of MFIs in India
• innovations in delivery methods of microcredit to improve financial inclusion
• options and opportunities for involvement in microfinance for commercial banks
• micro-insurance, micro-pensions, and micro-credit
• MFIs’ experiences with regulation, international microfinance, and corporate governance
• technological improvements in microfinance

All registered participants are provided with boarding and shared accommodations for the two nights and three days of the conference.  Registration costs for Indian participants are as follows: attendees from private industry pay INR 2,000 (USD 40) each; authors pay INR 1,000 (USD 20) each; and research scholars pay INR 500 (USD 10) each.  All participants from abroad pay USD 125 each to register. The registration deadline is December 15, 2008.  To register, please visit the Pondicherry University website.

Further inquiries regarding the conference should be directed to Dr. D. Lazar at +91-413-2654369, +91-9486650016, or icomfi2009.enquiry@gmail.com.   Interested persons should also visit the official event posting on the Pondicherry University website.