MICROCAPITAL STORY: Gates Foundation Matches Rotary and Caster Foundation to Donate $600,000 to Opportunity International

USD 600,000 was raised by a cooperation between Opportunity International, the Bill and Melinda Gates Foundation, the Caster Foundation, and Rotary Clubs throughout the USA and Canada. The fundraising effort was initiated with an offer by the Gates Foundation to match and double funds raised for Opportunity International, up to a total donation of USD 400,000 by the Foundation. Thirty-six Rotary Clubs in and around San Diego, as well as clubs in Calgary, Canada and The Caster Foundation, joined this initiative to raise a total of USD 600,000 for Opportunity International, a network of partners and institutions that facilitate microfinance, microinsurance and microsavings globally. Bink Cook, co-chair of San Diego Rotary’s Microcredit Committee spoke of Rotary’s motivation to get involved saying that this was, “an ideal opportunity to collaborate in a major program with global impact“. The funds will be distributed by Opportunity International as microloans through their lending facilities in Ghana, where they have 117 thousand active clients and have already loaned USD 98.8 million. Opportunity International currently operates in ten African countries. Continue reading

MICROCAPITAL STORY: Reserve Bank of India (RBI) Discussing Regulations Requiring Banks to Devote 10% of Loans to Microfinance

The Reserve Bank of India (RBI), the country’s central bank, is contemplating requiring that financial institutions direct at least ten percent of their total loans to medium small and micro enterprises (MSMEs). These new restrictions would come on top of the current requirements that banks devote at least 40 percent of lending to the priority sector, which includes poor and agricultural areas and industries. These current laws do not require that loans be made to enterprises of a certain size. Continue reading

MICROCAPITAL STORY: Bill Clinton Extols Microfinance Amid Global Credit Crisis at 2008 Clinton Global Initiative Summit

Bill Clinton praised microfinance in his closing speech at the 2008 summit for the Clinton Global Initiative (CGI), the global development summit and brainchild of the former U.S. president.  As one of the summit’s concluding speakers, Clinton exhorted investors to consider the poor of developing nations as viable investment alternatives to today’s turbulent markets.  He lauded international microfinance investors as “smart people” earning money the “old-fashioned way” in a “real economy based on real people doing real things for a real rate of return.”  Amid a global credit crisis that threatens to dry up anti-poverty aid, Clinton cautioned investors and business leaders from “looking inward.”  Continue reading

MICROCAPITAL STORY: Pilot Project Koshi Yomuti to Become Namibia’s First Microfinance Bank with Funds from GTZ, FIDES, Incofin, Swiss Microfinance Holding and Investisseur et Partenaire Pour le Development

Koshi Yomuti, a six year old microfinance project whose name means “banking under a tree” will become Namibia’s first commercial micro finance bank with seed capital of Euro 2.3 million from the German Technical Cooperation (GTZ), a federally owned international cooperation enterprise based outside of Frankfurt, Germany. The grant money will be used to create the first purely micro finance banking institution in Namibia upgrading the Koshi Yomuti/Ohangwena Pilot Project to a commercial microfinance bank. The bank will be owned by foreign investors, including KfW (on behalf of GTZ), FIDES (Switzerland), Swiss Microfinance Holding (Switzerland), Incofin (Belgium), and Investisseur et Partenaire pour le Development (France). Continue reading

WHO’S WHO IN MICROFINANCE: A Little World

A Little World (ALW) is a company which creates technologies used in extending branchless banking services to the poor. While ALW is a for-profit corporation, its vision is to “touch a billion people through innovative technologies and alliances at the bottom of the pyramid for delivering multiple financial services at the lowest cost through mainstream financial institutions.” Currently, the company’s main project is the ZERO platform, which provides banking technologies via mobile phones. Continue reading

MICROCAPITAL STORY: Blue Financial Services, International Bank Plc, and AIG Investments Found Nigerian Blue Intercontinental Micro Finance Bank

Blue International Micro Finance Bank Limited (BIMFB), a newly created Nigerian micro finance bank, has begun operations in Nigeria, which will be using its capital base of N3 billion (USD 25 million) to provide micro loans to Nigerians. Blue Intercontinental Micro Finance Bank Limited is a partnership between International Bank Plc and Blue Financial Services of South Africa. This N3 billion (USD 25 million) is N2 billion (USD 17 million) over what is required by the Central Bank of Nigeria for starting up a microfinance bank in the country, and is reportedly the first to begin operations throughout different states in Nigeria, according to Business Day. Continue reading

MICROCAPITAL STORY: The Philippine Government Grants $3.7m to Five Microfinance Institutions: Rural Green Bank of Caraga, Enterprise Bank, People’s Bank of Caraga, Talacogon Agro-Industrial Multi-Purpose Development Cooperative, and Rural Bank of Placer

In August, the Philippine government dispersed PHP 169.7 million (USD 3.7 million) in loans to five microfinance institutions (MFIs) in the Caraga region of Mindanao in accordance with the Rural Micro Enterprise Promotion Program (RuMEPP).  The Small Business Corporation (SBC), a government finance agency, funneled the loan to the Rural Green Bank of Caraga, the Enterprise Bank, the People’s Bank of Caraga, the Talacogon Agro-Industrial Multi-Purpose Development Cooperative (TAMDECO), and the Rural Bank of Placer, which in turn redistributed the funds as loans to thousands of micro-entrepreneurs in Caraga. Continue reading

MICROCAPITAL STORY: Examination of Fitch Rating Standards for Microfinance Institutions

The credit ratings assigned to corporations affect the cost of borrowing money in international capital markets. Microfinance institutions (MFIs) are no exception. As more and more MFIs look to raise money from capital markets, their credit ratings will become increasingly important in their ability to provide financial services at a low cost. Fitch Ratings is a premier international ratings agency, which has evaluated a number of MFIs around the world. This story will examine how Fitch approaches ratings of microfinance. Continue reading