By: Christine Chang, Research Associate

About Banco de Comércio e Indústria (BCI):

Banco de Comércio e Indústria (BCI) is an Angolan bank majority-owned by the Angolan government. Established in 1991, the bank is part of a joint venture with Sonangol, the national petroleum company.

Additional Resources:

Source article: Macau Hub: Angolan bank BCI launches micro-credit programme, March 10, 2010: http://www.macauhub.com.mo/en/news.php?ID=9064

MicroCapital Universe: Banco de Comércio e Indústria (BCI): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Banco+de+Com%C3%A9rcio+e+Ind%C3%BAstria+%28BCI%29

 Financial-portal.com: Angola Banks: http://www.financial-portal.com/banks/angola_banks.php

Mr Blaine Stephens, COO and director of analysis for MIX, said, “This year’s ranking shows a lot of movement and activity in the microfinance market throughout the developing world, with 34 MFIs entering the rankings for the first time… We are seeing the stress of changing operational conditions due to the economic slowdown reflected in these rankings, as MFIs struggle to maintain efficient operations and keep their portfolios at risk low.”

By: Stefanie Rubin, Research Associate

About the Microfinance Information Exchange (MIX):

Established in 2002, Microfinance Information Exchange (MIX) is a nonprofit organization with headquarters in Washington, DC, and regional offices in Peru, Senegal, India and Indonesia. MIX provides detailed financial and social performance information from microfinance institutions (MFIs), as well as business information from market facilitators and donor organizations and investors in microfinance. MIX was founded by CGAP (Consultative Group to Assist the Poor) and is sponsored by Citi Foundation, Deutsche Bank Americas Foundation, International Fund for Agricultural Development (IFAD), and the Bill & Melinda Gates Foundation.

Additional Resources:

The Microfinance Information Exchange: 2009 MIX Global 100 Composite: http://www.themix.org/publications/2009-mix-global-100-composite

MicroCapital Universe: The Microfinance Information Exchange (MIX): http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Information+Exchange+%28MIX%29

By: Christine Chang, Research Associate

About the Microfinance Institutions Network (MFIN):

The Microfinance Institutions Network (MFIN) is a trade association of microfinance lenders. Vijay Mahajan, Chairman of MFIN, is also the Chairman of the BASIX Group, an Indian microfinance institution established in 1996. BASIX Group consists of several companies that provide savings and insurance services to poor households in rural India as well as agricultural/business development services and institutional development services. MFIN website: unavailable. BASIX Group website: http://www.basixindia.com/

Additional Resources:

The Wall Street Journal: India’s Micro Industry to Share Data, March 9, 2010: http://online.wsj.com/article/SB10001424052748704784904575111470418555624.html

Domain-b.com: Microfinance lenders set up self-regulatory body, March 9, 2010: http://www.domain-b.com/finance/financial_services/20100309_microfinance.html

MICROCAPITAL BRIEF: Mr Vijay Mahajan and Mr P N Vasudevan Debate Self-Regulation in Indian Microfinance Industry, January 20, 2010: http://www.microcapital.org/microcapital-brief-mr-vijay-mahajan-and-mr-p-n-vasudevan-debate-self-regulation-in-indian-microfinance-industry/

MICROCAPITAL BRIEF: Indian MFIs Agree to Voluntary Credit Code Enforced by Microfinance India Network (MFIN) And Take Equity Stake in Credit Information Bureau, December 29, 2009: http://www.microcapital.org/microcapital-brief-indian-mfis-agree-to-voluntary-credit-code-enforced-by-microfinance-india-network-mfin-and-take-equity-stake-in-credit-information-bureau/

MicroCapital: First of all, would you please provide us with your interpretation of what “impact investing” means in relation to the microfinance sector and regulated banking channels?

Paul DiLeo: I think that impact investing is increasingly important for microfinance because of the kind of transition that the sector is experiencing in terms of its investor base at this time.  Up until the last couple of years, since microfinance started to establish itself, the investor base for microfinance has not changed much.  You had a lot of the same development or philanthropic institutions that had gradually moved with microfinance as the sector had become more commercial, experimenting with investment instruments and structures as microfinance became an investment rather than mostly a philanthropic opportunity.  I guess I am really focusing on equity where there is particular influence to be exerted over the nature and character of the institutions.  More recently, I think that you have seen new types of investors come in who are, at the extreme, motivated entirely by financial considerations and potential for financial return.  Not to say that they don’t care about the social story, but that the social story is entirely an additive beneficial feature and not necessarily required for them to pursue this as an investment opportunity.  But for an important segment of the investor base — the “impact investors” — the social story stands on its own and remains essential.  What that means for the microfinance industry is that microfinance institutions (MFIs) need to be much clearer about the objectives of their traditional and newer investors.

MC: Grassroots Capital has been formed as a “spin-off” from the Gray Ghost Microfinance Fund. What was the drive behind that evolution?

PD: Originally Gray Ghost was the brainchild of Bob Pattillo and David Weitnauer, the head of the Rockdale Foundation, Bob and Katy Pattillo’s foundation at that time.  I joined them to devise an investment strategy for Gray Ghost and help launch it. I was the investment director for about five years.  About three years ago we started looking ahead to the day that Gray Ghost would be fully invested and whether Gray Ghost’s mission of trying to draw other private investors into the microfinance space might be accomplished not just by way of example, but by directly providing for the intermediation of private capital into the industry by raising a fund that would take in capital from private investors other than Bob and Katy Pattillo.  So when we started down that route, it very quickly became clear to us that the most credible way of launching such a vehicle into the market was going to be on the basis of an independent manager–one who would be seen as fully aligned with the interests of all the investors as a group.  It basically came about as a way of positioning the new fund in the most favorable possible way, so as to maximize the chances of launching the new fund successfully.

Thus, together with my partners, David FitzHerbert and Viswanatha Prasad, we spun off the management company — Grassroots — as an independent management company with no ownership from Gray Ghost or Bob Pattillo to launch the new fund: the Global Microfinance Equity Fund.

MC: Given your interest in integrating social performance measurement into the investment process from the start, would you please provide a description of the social impact indicators that you use?

PD: Starting with Gray Ghost, we have tried to come up with a set of indicators of social impact that would be non-burdensome from both the standpoint of the MFI and the investment process.  We tried to identify indicators that would have some social content, but also be indicators that were meaningful in the day-to-day management of the business and were relevant to the analysis of an investment in any case.

More recently with Grassroots, we have taken advantage of some developments in the industry to try to incorporate more of a focus at the client level.  One of the developments that we took advantage of was the emergence of the “poverty scorecard”.  It really provides a snapshot of the poverty status of the client and can be used to evaluate the development of changes in the client’s poverty status over time and even ideally compare it to some kind of national benchmark.  This would give us an idea of how an MFI’s client base is developing over time relative to the general population.  We encourage MFIs that we invest in to incorporate it into their practices.  We have also integrated recent developments with respect to client protection principles into our analysis.

MC: What types of investors are involved in your fund?  Can you also provide greater detail as to the due diligence required when evaluating one’s investment options from a client’s perspective — what are investors looking at when they come to you?

PD: The first fund, Gray Ghost was capitalized by an exceptional individual, Bob Pattillo, who committed a very substantial amount of capital to microfinance at a time where there was essentially no purely private investment in microfinance, certainly nothing of that scale.  As of today, we have about 15 investors with the new fund.  There are probably eight or so individuals, most of whom have some particular interest in microfinance or social investment.  The rest are a fairly diverse group of institutions such as a large European pension fund, a European insurance company, a US socially oriented wealth manager and a US hedge fund.  It’s gratifying in that it’s a pretty diverse group of investors.

With regard to the due diligence required when evaluating one’s investment options from a client’s perspective — it varies.  I think that the principals involved in Grassroots had a reliable and complementary combination of skills, access and market experience allowing them to execute the investment strategy.  I would say that is one of the main things.  Some of the investors, particularly the individual investors, have known or had exposure to us in the microfinance field before; many of them satisfied themselves in that regard, on the basis of personal relationship and personal knowledge.

When you get into the institutional end of the investor group, there is quite a bit of focus on examining the structure of the investment manager, the resources of the manager and the track record.  They would look at how we mobilize the supplemental resources of legal due diligence or analysis of the investment.  This is done in a very formal and rigorous way.

MC: So from an investor’s standpoint with regards to rating microfinance investment vehicle (MIV) fund managers, the qualifications that you have just mentioned are necessary for a ‘competent’ manager?

PD: Yes.  Certainly in terms of the evaluation of the key people involved.  I think that investors are really looking for people that demonstrate some ability to execute these kinds of transactions in the microfinance market.  Also, that they share an appreciation of what the investors are really looking for.

MC: According to the CGAP (Consultative Group to Assist the Poor), microfinance private equity transactions have become increasingly common–JP Morgan at one point identified 144 such transactions completed since 2005, with total value of about USD 300 million. What kind of role do you think private equity firms will play in the microfinance sector in the next 5 years?

PD: I think that there will be a tier or a set of MFIs that achieve scale and have growth prospects that will be attractive to private equity investors.  I think we have seen the beginning of that in Mexico with Banco Compartamos.  I think that the next few steps along that path will be in India.  My guess is that worldwide, the participation of private equity probably won’t become a dominant driver of transactions in microfinance.  I just don’t think that the scale will be that attractive to private equity firms.  India is a very special case.  You are not going to see those kinds of opportunities in many countries.

MC: Would you please provide greater detail as to what an investor should look out for in term of risk/reward when examining the operational structure of an MIV?

PD: Grassroot’s investment approach has been based on the experience that Prasad and I had when building up Gray Ghost and the Bellwether Fund in India.  Fairly early on we had come to the impression that from both a social and financial standpoint, microfinance equity investing was best done very close to the ground–done by people who were in and from the market.  These are people who had information networks and resources throughout their respective market, as well as the capital markets, and also had legal expertise.  I am not talking simply networks and resources in microfinance but in different areas that were relevant to the success of the transaction.

From a social standpoint, we found that microfinance penetration was very uneven.  We learned that there were not many high-quality microfinance services to be found in many markets.  At that point, we felt the most likely way of extending microfinance to some of the blank spots was by either promoting new institutions or helping promising institutions to expand more quickly and develop their capabilities.  For those types of investments you really need very close oversight and a fair amount of inputs to supplement the capabilities of the initial management team.  Thus, it was not an investment that you could manage by flying in and out once a quarter or every couple of months.  It was really something that needed a continuous engagement.

From a financial standpoint, we found those types of investments to be more attractive.  The alternative, which was investing in some of the larger, more established and mature institutions with a track record, five years of financial statements, western auditor, etc., was not attractive due to the large amount of capital chasing those investments.  We found that they just tended to be overpriced.  So we started from that observation and set out to build a capability, first through Gray Ghost and then through Grassroots, of having those kinds of teams deployed in the markets that we were targeting.

MC: How does one evaluate and recognize any potential signs of trouble for a MIV?  I am not just talking about early warnings, but whether there are any structural features that increase the risk for the investment vehicles?

PD: Two things come to mind.  One is concentration.  We have had experience with one vehicle that was a regional vehicle.  The advantage of a regional vehicle is that it could bring to bear this kind of regional expertise.  It would not have this geographical diversification, so, of course, if something goes wrong in that country/region, then there would be a problem.  I would still argue that kind of regionally focused vehicle is preferable for the reasons that I was just describing.  But I think investors need to be aware that it creates a concentration risk given that these are typical emerging markets and there can be heightened country risk or regional contamination risk.

The second thing would be the capability of the vehicle in terms of really being able to develop an independent, well-informed view of the MFI.  That is obviously something that you would expect from an equity manager.  I would argue that unless you have a team in place, it’s pretty much impossible to do.  I think even for a debt fund, you really want to have some reason to believe that the debt fund is going to be able to genuinely make some kind of independent, ongoing evaluation of the MFI, rather than relying entirely on secondary sources, reports, ratings or decisions of other investors.

MC: What type of due diligence is involved in selecting the MFIs that you invest in?

PD: In terms of the regions, I think we would want to have a good understanding of the MFI’s market penetration and what the particular niches are that an MFI might be able to fill.  It’s certainly not inconceivable that you can find a good MFI in Bosnia or Bolivia to invest in, notwithstanding the fact that those are highly penetrated markets.  But you want to be careful and understand how these institutions differentiate themselves from other MFIs.

I think in terms of what we would then look for in the MFI, certainly at an early-stage institution, you are placing a huge weight on the manager and the individuals who are going to be executing the business plan.  You might have some track record of those individuals, but not necessarily from that institution because they may have a long track record at another institution.  A lot of times the promoters of these early-stage MFIs come from an existing institution where they have held some kind of senior management position.  So you get a good feel for the managers.  That’s a huge part of the evaluation.

I think that with more established and mature institutions, you will have to look very carefully at their loan approval process and how they manage risks in the portfolio in terms of the initial underwriting of the loan.  We also look at how they monitor risks that may develop once the loan is made with that borrower–is that borrower taking on excessive debt from other sources?  We look at when that borrower might migrate from being a very attractive asset to being something more questionable and do you have the ongoing ability to reassess that periodically?

By Zoran Stanisljevic

Mr Churchill has authored and edited over 40 documents on microfinance. He received a Bachelor of Arts in Political Science from Williams College and a Master of Arts in International Development and Social Change from Clark University, both in the US state of Massachusetts.

MicroCapital: Would you please explain the International Labour Organization’s (ILO’s) interest in microinsurance and how this led to the founding of the Microinsurance Innovation Facility?

Craig Churchill: The ILO is interested in microinsurance for a couple of different reasons. The ILO is very keen on finding ways of extending social protection benefits to workers in the informal economy. Often when there are government health schemes or pension schemes, they cover workers in the formal sector but don’t cover workers in the informal sector, so microinsurance is one way of extending social protection benefits to workers in the informal economy. The other interest the ILO has is the social justice element of financial markets. If financial markets are working effectively, are they able to reach and include as many people as possible?

The ILO did a detailed analysis of what we call “good and bad practices,” which resulted in a book a few years ago called Protecting the Poor: A Microinsurance Compendium. The book pulls together key lessons from 25 different case studies that looked at 40 different organizations in some detail. The main thrust of it is that insurance can be provided to low-income people and can be viable under certain circumstances, but (1) most of the products out there weren’t providing particularly good value to the poor and (2) there was a real need to push the envelope, improve the quality of products and create alternative institutional models. The big piece of the analysis was looking at different models for delivering insurance or structuring insurance services. Basically the conclusions were that they all had some limitations, that none of them was necessarily much better than the other. Those findings led us into discussions with the Gates Foundation about creating a facility that would disseminate key lessons, but also stimulate new innovations. That’s how we ended up with the Microinsurance Innovation Facility, which provides grants to organizations on a request for proposal process. We pick the ones that we think are going to be innovative and be able to provide good value to more low-income people and help to create new lessons that will make it possible for more people to have more access to better insurance products.

MC: One of the main objectives of the Facility is that 150 million low-income people will have access to insurance products by the end of 2012. While there is a definite need for risk management tools among the poor, there isn’t necessarily as high of a demand, due to either mistrust or a lack of understanding. What is the Facility doing to increase the demand for microinsurance products?

CC: There are a lot of different challenges in the process of providing insurance to low-income people. Certainly weak demand is one of the key issues that need to be addressed. Several of our grantees are involved in consumer education, three of which are insurance associations. In Colombia, Brazil and Kenya, the insurance associations are experimenting with approaches to raise awareness about insurance for low-income people. We hope that these efforts will move toward creating a better understanding of microinsurance and hopefully stimulate demand.

There are two levels of challenges in terms of demand. One is initial sales and the other is at the renewal time, encouraging people to sign up again. One of the things that a lot of our grantees are doing for the renewal bit is to show that there is some benefit for having insurance even if the policyholder doesn’t experience a need for claim. For example, there is one that we are supporting in India that is working with farmers, providing weather index insurance. This is a particular type of product where there is a huge problem with renewals because if there is no drought then people feel like they have wasted their money. What they are doing is in addition to the insurance coverage they are also trying to provide farmers with weather information and agricultural information details, so they see that there is some benefit to being a part of this insurance scheme even if there isn’t a drought.

MC: What are the main products that the Facility focuses on developing?

CC: There are several different dimensions that we are looking at, but the main way that we categorize our priorities is by what is in the greatest demand by low-income households. The products that come up again and again are usually life insurance and health insurance. Life is a much easier nut to crack, because it is more straightforward. People only die once and it is pretty easy to verify. There is less of a need for us to innovate in life insurance than in health insurance, which is a much more difficult type of insurance to offer and an area on which our next call for proposals will focus.

We have gotten more proposals for health insurance than any other, but we haven’t approved very many grants for various reasons, including the level of innovation and viability. It is important that when our grant is over that they are able to stand on their own in some way. It doesn’t have to be viable in a microfinance sense; it could be viable because they have identified other sources of subsidies. With health microinsurance, there is a strong justification for that. Ideally there would be health coverage provided through or supported by the government as a social protection benefit for all people in that jurisdiction. In a perfect world that would be the case; in an imperfect world we would need to figure out how we can move closer to that ideal and see if there are ways of accessing subsidies to enable the less well-off to be able to access appropriate health care.

MC: Is microinsurance financially sustainable?

CC: There is no doubt that life microinsurance can be viable. There are millions of low-income people who have micro life insurance to show it. Health is much more difficult, and agriculture is also an area where more work is needed in order to have viable microinsurance schemes.

MC: In the case of health microinsurance, for example, there have been cases where hospitals overcharge because they know the client has insurance. How do microinsurance providers control fraud and enforce regulation?

CC: Health insurance has all sorts of challenges, and one of them is certainly provider fraud. In terms of overcharging they typically would enroll or certify certain health care providers, which would agree to certain rates in advance.

Additionally, many insurers will hire doctors to help them monitor health care providers and claims processes and make sure that proper diagnoses are being done and people are being charged appropriately. But even with the best systems, this will be a huge challenge that organizations are working on. Another solution they use is third-party administrators (TPAs), which serve as gatekeepers for the health care providers. If somebody goes and wants to get health care, the doctors need to get preapproval from the TPA to admit the person. The TPA would manage all of the claims and certainly have doctors on staff to help in the monitoring process.

MC: Do you foresee large insurance and reinsurance companies playing a larger role in microinsurance in the future?

CC: One of the things that we find is that insurers aren’t particularly good at reaching this market directly. There are trust issues and cultural gaps, and distribution is just not an area of expertise that insurers have, particularly for this market. So what we encourage them to do is to identify appropriate distribution channels. An example of an appropriate distribution channel would be an organization that could easily reach large numbers of low-income people, one that would already have some sort of financial transactions with them, and one that would have the trust of the population. Microfinance institutions (MFIs) would certainly fall into that category as an appropriate delivery channel, but we are also identifying many others: religious organizations, trade unions, even utility companies and retailers.

In some countries they are now putting insurance on the shelves, and you can buy it at a Carrefour in Colombia or at a retailer in South Africa, and you pay for it at the checkout counter. We have one grantee in India that is experimenting with mom and pop shops as distribution channels. These local retailers have a supplier behind them. Clients pay for their premiums and get an SMS [text message] back verifying that they indeed have paid.

MC: What are the main challenges you see facing the microinsurance industry?

CC: So we have talked about the demand side and the distribution side, which are two major issues. Another big challenge is around information management. Insurers are quite good at managing volumes of data; their whole business is really data management. But they’re used to lots of pieces of information about particular policyholders, and what we are talking about in microinsurance is a very different type of data where you have a little bit of information about lots and lots of people. It is challenging for insurers to make that next leap into the space where we are talking about huge volumes of small premiums.

One of the difficulties with insurance today is that it is very difficult for anybody to understand. There is a need for it to be simplified so that people who are not so confident or trusting of insurance to begin with can start increasing their levels of trust. People must start to believe that the insurer will really pay when they are supposed to and not use some fine print exclusion as a way of not paying claims.

MC: To that end I would imagine that illiteracy must be a big challenge as well. How do organizations educate their illiterate clients?

CC: It varies from country to country, but certainly in some countries it’s a challenge and you find organizations using comic books or videos as a way of explaining it. The advantage of that is also that you communicate the same message every time. If you rely on an army of sales agents, you don’t really know what they’re going to say. If there are ways of standardizing it to have greater control over the information that is communicated to low-income people, hopefully that will help improve the uptake.

MC: What trends do you foresee in microinsurance over the next five to ten years?

CC: Certainly new distribution channels. Organizations that have large numbers of members or access to large numbers of low-income people could start to see insurance as a legitimate service that they could provide to their members or customers. Hopefully greater diversity of distribution would make it possible for more people to have access.

The other thing that we really need to find ways of doing is bringing down the administrative costs and making sure that as great a percentage of the premiums that are paid come back to policyholders in the form of claims. A big challenge is how do we streamline administration and make insurance more affordable and more valuable to low-income workers.

By: Stefanie Rubin, Research Associate

Additional Resources:

International Labour Organization: http://www.ilo.org/global/lang–en/index.htm

International Labour Organization Microinsurance Innovation Facility: http://www.ilo.org/public/english/employment/mifacility/

Protecting the Poor: A Microinsurance Compendium: http://www.munichre-foundation.org/StiftungsWebsite/Projects/Microinsurance/2006Microinsurance/Microinsurance_Compendium.htm

MicroCapital Universe: International Labour Organization: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Labour+Organization+%28ILO%29

The software provides SMEs with free online access to business forms, tools, how to articles, free software, and advice about accessing markets. The platform also features online forums and conferences with the aim of increasing interaction among SMEs. Republic Bank first launched SME Toolkit Caribbean in its home market of Trinidad and Tobago in July 2009, and over 25,000 Caribbean SMEs have so far accessed the system [1].

About the International Finance Corporation (IFC)

The International Finance Corporation (IFC) is a member of the World Bank Group, created to support financial private sector development, mobilize private capital and provide advisory and risk mitigation services to businesses and services. It uses loan and debt securities, equity investments and guarantees as instruments of poverty alleviation. It invests in financial institutions in emerging markets as well as provides technical assistance. IFC has 182 member countries that collectively determine its policies and approve investments. In 2009, IFC made new investments in developing countries that reached a total of USD 14.5 billion.

About Republic Bank Ltd.

Republic Bank Ltd. is a commercial bank that operates across the Caribbean. Founded in Trinidad and Tobago in 1837, the organization provides financial services to individual, commercial, and corporate clients. Republic Bank’s “Power to Make a Difference” program aims to alleviate poverty through education and entrepreneurship. Republic Bank hosts the SME Toolkit Caribbean software platform on its servers. The program provides free advice and consultation to over 25,000 small and medium-sized enterprises across the Caribbean. As of September 30, 2009, Republic Bank Ltd. has TTD 42 billion (the equivalent of USD 7 billion) in total assets.

By Eric McKay, Research Assistant

Bibliography

[1] “Republic Bank, IBM, and IFC Promote Guyana’s Small and Medium Enterprises Competitiveness”, IFC Press Release, March 4, 2010, http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/2AFE54C92013FEB8852576DC00753A3F?OpenDocument

Additional Links

SME ToolKit Caribbean Homepage: http://caribbean.smetoolkit.org/caribbean/en

MicroCapital Universe: International Finance Corporation: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital Universe: Republic Bank Ltd.: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Republic+Bank+Ltd.

Rachel Kyte, IFC Vice President for Advisory Services, said in a press release that becoming a regulated institution will enable FMM to “increase the scope of financial products and services that the company is able to provide to its more than [265,000] clients who all belong to the low-income segments of Colombia’s population” [1]. IFC and FMM hope to improve the company’s risk management systems, revise credit policies and procedures, reinforce its training capacity, improve its finance and treasury departments and design and implement savings products.

About the International Finance Corporation (IFC)

The International Finance Corporation (IFC) is a member of the World Bank Group, created to support financial private sector development, mobilize private capital and provide advisory and risk mitigation services to businesses and services. It uses loan and debt securities, equity investments and guarantees as instruments of poverty alleviation. It invests in financial institutions in emerging markets as well as provides technical assistance. IFC has 182 member countries that collectively determine its policies and approve investments. In 2009, IFC made new investments in developing countries that reached a total of USD 14.5 billion.

About Fundacion Mundo Mujer

Based in Colombia, Fundacion Mundo Mujer (FMM) has been a member of the Women’s World Banking network since 1990. It aims to provide microfinance services to women microentrepreneurs and low-income families. As of 2008, FMM’s thirty branches throughout Colombia serve 265,000 clients, and FMM reports a total outstanding loan portfolio of USD 154 million.

By Eric McKay, Research Assistant

Bibliography

[1] “IFC and Fundación Mundo Mujer to Reach Entrepreneurs and Low-Income Households”, IFC press release, March 2 2010, http://www.ifc.org/ifcext/media.nsf/content/SelectedPressRelease?OpenDocument&UNID=F2FF1F12436BDFE5852576DA0052AEB5

Additional Links

MicroCapital Universe: Fundacion Mundo Mujer: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Fundacion+Mundo+Mujer

MicroCapital Universe: International Finance Corporation: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%2

Event Date: March 25 - March 26, 2010

Event Location: Beijing, China

Event Website: http://www.gtz-china.org/finance/microfinance-investor-conference-2010/

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

Cost: There is no fee to attend

Summary of Event:

This conference will review the current status of microfinance in China and discuss prospects for its future. Participants will have the opportunity to network with Chinese microfinance institutions and international investors.

Background on Organizer:

The People’s Bank of China is China’s the central bank of the People’s Republic of China. It is responsible for designing and implementing monetary policy. In 2000, the People’s Bank of China established Rural Credit Cooperatives which are a primary source of microcredit in China today. In 2005, the People’s Bank of China established a pilot program that established government-run microfinance institutions in six provinces in China [1].

Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH is a German government-owned enterprise that encourages sustainable international development. GTZ supports microfinance operations in approximately forty countries by attempting to help microfinance institutions become financially and legally viable as well as supporting reforms in the financial sector that are favorable to microfinance [2].

Event Themes and Discussion Topics:

-Current state of microfinance in China

-Prospects for the future of the microfinance industry in China

Who Is Invited to Attend:

Chinese microfinance institutions, international investors and other stakeholders in Chinese microfinance

About the Presenters:

Wu Xiaoling, Deputy Director, Financial and Economic Affairs Committee of the National People’s Congress

Jiao Jinpu, Acting Vice Chairman of School Administration Committee, People’s Bank of China

Thorsten Giehler, Director, Financial Sector Development Programme, GTZ

Florian Borgmann, Project Manager, KfW Bankengruppe

For information on additional speakers, please see the conference agenda at: http://www.gtz-china.org/finance/microfinance-investor-conference-2010/agenda.html

Online Registration Address: Online registration is unavailable. A registration form can be downloaded at this website: http://www.gtz-china.org/finance/microfinance-investor-conference-2010/docs.html

For additional information, please contact:

Contact Name: Thorsten Giehler

Telephone/Location: +86 (0) 10 8532 5506

Email: Thorsten.Giehler@gtz.de

Submit Your Event: http://microfinanceassociation.ning.com/events

Bibliography:

[1] “Microfinance in China: Micro vs. Mandarin”, Asia Society, August 25, 2008, http://www.asiasociety.org/education-learning/for-students/global-topics/microfinance-china-micro-vs-mandarin

[2] “Microfinance”, GTZ, 2007, http://www.gtz-china.org/finance/en/microfinance.html

About Talam Corporation

Talam Corporation is an investment holding company based in Malaysia that operates in Malaysia and China. The company engages in property investment, management, and development as well as offers asset management and consulting services [2]. As of January 31, 2009, the company holds MYR 3 billion (the equivalent of USD 900 million) in assets [3].

By Eric McKay, Research Assistan

Bibliography

[1] “Selangor To Launch Micro-Credit Scheme To Help Poor, Low-Income Group”, Bernama, March 8, 2010, http://www.bernama.com/bernama/v5/newsgeneral.php?id=480730

[2] “Talam Corp BHD”, BusinessWeek, http://investing.businessweek.com/research/stocks/snapshot/snapshot_article.asp?ticker=TA:MK

[3] “Reports and Financial Statements 2009″, Talam Corporation, http://www.talam.com.my/news/Talam%20Corporation%20Berhad%202009%20Audited%20Financial%20Statements.pdf

Additional Links

MicroCapital Universe: Talam Corporation: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Talam+Corporation

By Christopher Maggio, Research Assistant

About
Janalakshmi Financial Services (JFS)

Description
Janalakshmi Financial Services (JFS) is a microfinance institution (MFI) located in India. It is focused primarily on urban customers and offers loans, savings, and microinsurance.

As of March 8, 2010, it operates in six cities, has over 100,000 customers and a gross loan portfolio of INR 85 crore, the equivalent of over USD 18.6 million. JFS does not report to the MIX Market, the microfinance information clearinghouse.

Contact:
Address:
Head Office
No. 302, 7th Cross
Domlur Layout
Bangalore - 560 071
Phone: +91 080 42595700
Fax: +91 080 41525770 CUT
Email: info@janalakshmi.com

About
Tree Line Asia Master Fund (Singapore) Private Limited

Description
Tree Line Asia Master Fund (Singapore) Private Limited is a hedge fund with offices in Hong Kong and Singapore. It has invested in Janalakshmi Financial Services (JFS), a microfinance institution (MFI) located in India. Other investments include stakes in Goldman Sachs and Mount Everest Mineral Water.

About
Bellwether Microfinance Fund

Description
The Bellwether Microfinance Fund is an onshore Indian venture fund that makes equity investments in microfinance institutions (MFIs). The Fund invests in start-ups as well as established medium-sized nonprofit MFIs. The USD 20 million fund is independently managed by Caspian Advisors.

Just the Facts
-Country of Incorporation: India
-Year Founded: 2005
-Total Assets (as of day/month/year): USD 20 million (as of 2007)
-Number of MFI Investments (as of day/month/year): 14 (as of 2007)
-Assets Allocated to MFIs (as of day/month/year): USD 15.7 million (as of 2007)
-Area of Operation: Global
-Participant(s)/Backer(s)/Investor(s): Gray Ghost, Netherlands Development Finance Company, Hivos-Triodos Fund
-Investment Horizon: 2 years (for Loan and Debt Securities)
-Instruments: Loan and Debt Securities, Equity, Guarantees
-Fund Currency: INR
-Fund Manager: Caspian Advisors

Contact Information
Viswanatha Prasad
Fund Manager
prasad@bellwetherfund.com
+91 40 6646 0505

Additional Resources:
LiveMint article entitled ‘Janalakshmi Financial raises $10 million’: http://www.livemint.com/2010/03/07223157/Janalakshmi-Financial-raises.html

MicroCapital’s Microfinance Universe profile: Janalakshmi Financial Services (JFS)

MicroCapital’s Microfinance Universe profile: Tree Line Asia Master Fund (Singapore) Private Limited

MicroCapital’s Microfinance Universe profile: Bellwether Microfinance Fund