MICROCAPITAL STORY: International Finance Corporation (IFC) Provides Loan worth EUR 7 million to Microcredit Foundation EKI (MCF EKI) to Expand Financial Services in Bosnia and Herzegovina

The International Finance Corporation (IFC), the private sector lending arm of the World Bank, is providing a loan worth EUR 7 million to the Microcredit Foundation EKI (MCF EKI), a microfinance institution (MFI) based in Bosnia and Herzegovina (BiH). According to a press release on the IFC website, this loan is issued to enable MCF EKI to expand its outreach to micro-entrepreneurs in the rural areas of the BiH region and will be used in part to finance micro-entrepreneurs and the rest to finance home-improvement projects in several of the region’s war ravaged areas. In this regard, EKI’s micro-lending program, which targets micro and small enterprises in the region, aims to utilize IFC’s support to disburse 4,200 new loans to microentrepreuners by the end of 2011. Under its Housing Refurbishment Loan Program, EKI will use up to EUR 1 million of IFC’s loan to provide loans for repair and improvement of several houses in the BiH  region that were badly damaged by the Bosnian Civil War that took place between 1992 and 1995.

MICROCAPITAL STORY: Challenges to Regulation of Mobile Transaction Services, E-Money, and other Branchless Banking Technologies

In March 2007, when Kenyan cellphone service provider Safaricom launched its mobile payment service M-Pesa (‘M’ for mobile; ‘Pesa’ meaning money in Swahili), it predicted the service would attract 450 thousand customers by January 2008. The service caught on, and fast. When January 2008 rolled around, M-Pesa had more than doubled its goal, registering more than 1 million users in ten months. People began using M-Pesa credits to pay for everything from well water to cab fare. According to Wired magazine, almost a third of Kenya’s population now pays their electricity bills via mobile device. M-Pesa has now registered over 5 million users, and continues to register 10 thousand more each day. As discussed in this MicroCapital article, many banks and microfinance institutions (MFIs), such as Equity Bank in Kenya, have begun to adopt cellphone cash-transfer services as a way to minimize administrative costs and penetrate markets otherwise unreachable by traditional banking. Mobile transaction services, e-money, and other branchless banking technologies have also flourished in a number of developing nations beyond Kenya, most notably Brazil, India, Peru, the Philippines, South Africa, Russia, and Colombia. However, where the rapid growth of branchless banking has sparked the imagination of many, others’ optimism is shadowed by apprehension and concern that inadequate regulation in the nascent industry may place customers’ already vulnerable finances at risk.

MICROCAPITAL STORY: Omidyar-Tufts $100m Microfinance Fund Earns 12 Percent Return and $6.6m for Tufts University in 2008

In 2005, MicroCapital reported enthusiastically that Pierre Omidyar, founder of eBay, and his wife donated USD 100 million to their former school Tufts University, to be managed as a for-profit fund exclusively for investments into microfinance initiatives. At the time, the Omidyar-Tufts Microfinance Fund was the largest single for-profit microfinance fund in the world.

MICROCAPITAL EVENT: Sa-Dhan to host National Conference on Creating a Microfinance Ecosystem in New Delhi, India

National Conference on Creating a Microfinance Ecosystem: Challenges and Balanced Growth

March 31, 2009, New Delhi, India

Sa-Dhan, an association of community development financial institutions in India, is organizing the National Microfinance Conference 2009 focusing on the theme ‘Microfinance Ecosystem: Equilibrium between Growth and Effectiveness’. The day long event will be held at the Ashok Hotel in New Delhi, India on March 31, 2009. The conference is an effort to help facilitate the growth process of Sa-Dhan’s member organizations and other government agencies in India through collective learning opportunities, focusing on the means to overcome issues plaguing the microfinance sector in India. Issues include the commercialization of microfinance institutions (MFIs), governance, risk management, provision of holistic microfinance services (like savings, microinsurance, livelihood, etc), resource mobilization and credit crunch and cost of services.

MICROCAPITAL STORY: International Finance Corporation (IFC) Acquires 16.5% Stake in Peruvian MicroInsurer Protecta

International Finance Corporation (IFC) acquired a 16.5% stake in Peruvian life insurer Protecta, a microinsurance company. In February 2009, Protecta sold 3.17 million new shares to IFC at one sol each for a total of PEN 3.17 million (USD $1million). IFC stated in its official press release that the deal was made in order to help expand Protecta’s capital base and extend its insurance services to lower-income households and smaller businesses.

MICROCAPITAL STORY: Indian SKS Microfinance Issues Bonds and Commercial Notes, and Announces a $963.6m Borrowing Plan to Finance Rapid Growth

Hyderabad-based SKS Microfinance announced that it aims to raise one-tenth of its USD 963.6 million borrowing plan for the next fiscal year through USD 96.4 million worth of securitization deals with financial institutions. The announcement was made shortly after SKS sold USD 4.8 million non-convertible debentures (NCD) with YES Bank and generated another USD 4.8 million through the issuance of commercial paper (CP). Last month, SKS solidified a USD 38.5 million securitization deal with India’s second largest bank, the Industrial Credit and Investment Corporation of India (ICICI). These deals come as SKS strives to finance a loan portfolio that is growing at one of the fastest rates among microfinance institutions (MFIs) in the world.

MICROCAPITAL STORY: Global Alliance for Banking on Values Launched in The Netherlands; Eleven Banks Join to Form the Alliance

Eleven banks have joined to form a new alliance called The Global Alliance for Banking on Values in a move to build a positive alternative to the current crisis in the global financial system. According to a press release on the Netherlands based Triodos Bank’s website, this new partnership plans to develop new ways of building organizations better suited to long-term sustainable thinking and also to develop new forms of ownership and economic cooperation. The alliance was launched at an event held in The Netherlands from March 2-4, 2009. The event was also attended by Her Royal Highness Princess Máxima of The Netherlands, a former banker and former member of the United Nations Group on Inclusive Financial Sectors, and Achim Steiner, Executive Director of the United Nations Environment Program. The eleven member alliance was founded by the Bangladesh Rural Advancement Committee (BRAC) Bank based in Bangladesh, ShoreBank Corporation the United States based community development and environment bank and Triodos Bank in The Netherlands. Other member banks of the alliance include Alternative Bank ABS in Switzerland, Banca Popolare Etica in Italy, Banex, Banco del Exito in Nicaragua, the GLS Bank in Germany, Mekur Bank in Denmark, Mibanco, Banco de la Microempresa in Peru, New Resource Bank in the United States and the XacBank in Mongolia.

MICROFINANCE EVENT: Global Microfinance Investment Congress Hosted by PlaNet Finance and American Conference Institute

GLOBAL MICROFINANCE INVESTMENT CONGRESS

MAY 19-20, 2009, NEW YORK, NEW YORK

Global Microfinance Investment Congress 2009 is being co-hosted by PlaNet Finance Group and American Conference Institute. The conference consists of workshops, case studies, and panels focused on the latest strategies for success in microfinance investing.

MICROCAPITAL STORY: SKS Microfinance in India Plans to Launch Operations in China

SKS Microfinance, the largest microfinance provider in India in terms of assets, is planning to launch operations in China, in a move to expand its reach beyond India. According to a press release on The Economic Times, SKS reckons this would be the ideal time to enter the Chinese market. The export driven Chinese economy has been impacted by the global meltdown and several vocationally-trained rural employees in China have lost jobs. SKS plans to give credit to these unemployed groups in China and help them start their own ventures. In this regard, the release quoted the chief executive officer and managing director of SKS Microfinance, Mr. Suresh Gurumani as saying that SKS was looking to expand in China primarily because it was a ‘large country with a significant population that was poor’. Mr. Gurumani also stated that the expansion was a move to share SKS’ knowledge in the field of microfinance to benefit ‘a larger section of people’. SKS’ foray into China would make it the first overseas expansion for an Indian microfinance institution (MFI).

MICROCAPITAL STORY: Expanding Microfinancing in Latin America

In his article, published in British newspaper Financial Times, Jonathan Wheatley reports that, as the global banking system sinks into its worst crisis since the 1930s, there is a resurgence of interest in microfinance among Latin American banks. Several articles and papers have reported on this up and coming trend.

MICROCAPITAL STORY: Microinsurance Client Base of Allianz Life Indonesia Grows Four-fold in 2008

Microinsurance provider Allianz Life Indonesia has announced that its microinsurance client base grew 417 percent in 2008, from 42 thousand policyholders at the end of 2007 to 183.8 thousand at the end of the year. Its line of microinsurance products, dubbed “Payung Keluarga” (meaning “Family Umbrella”), generated a modest premium income of USD 82.5 thousand for the year, up 350 percent from USD 19.6 thousand in 2007. The significance is not the profit, but rather the increase in business volume. Payung Keluarga offers a range of life insurance products from basic credit life protection, which prevents microcredit borrowers from leaving debt to their family, to products that offer additional payouts to family upon the death of a breadwinner. Allianz Life Indonesia settled 76 microinsurance claims in 2008.

MICROFINANCE PAPER WRAP-UP: “microLINKS Connections, March 2009,” by USAID

The United States Agency for International Development (USAID) has released its March edition of microLINKS Connections. The monthly newsletter reports on the work of USAID and its partners in building microenterprises, summarizes research papers and resources on microfinance, and announces upcoming microfinance events. To subscribe to microLINKS Connects and for a complete version the March edition please refer to this link. Highlights from the March edition are as follows.

MICROCAPITAL STORY: Triodos Bank in The Netherlands Announces Launch of the Triodos Microfinance Fund with EUR 22m in its First Close

Triodos Bank based in The Netherlands announced the launch of the Triodos Microfinance Fund, a new fund that would aim to increase access to financial services for the working poor in developing countries. According to a press release on the bank’s website, the fund was launched with a total investment of EUR 22 million in its first close. Investors include the Netherlands-based insurance company Achmea, the largest fund manager for charities in the UK CCLA Investment Management Ltd. and the UK-based independent grant-making foundation The Waterloo Foundation. Triodos will meet the need for new capital from its existing microfinance partners as well as new partners experiencing strong growth in demand for financial services from low-income population. According to the press release, Triodos is planning a launch to individual investors shortly. The fund is open for institutional investors across Europe. Triodos bank expects the new microfinance fund to grow to EUR 100 million by the end of 2009 and EUR 200 million by 2011.

MICROCAPITAL STORY: State Bank of Vietnam (SBV) to Give Legal Status to Semi-Official Microfinance Institutions (MFIs); Calls for the Establishment of the Vietnam Microfinance Association

The State Bank of Vietnam (SBV) has given its approval to a proposal to change the status of Vietnamese organizations involved in ‘semi-official’ microfinance activities into officially recognized legal entities. According to a press release on the online financial news network Vietnam Business Finance, this move is an effort to help raise more funds for hunger eradication projects in Vietnam. Semiofficial microfinance activities are those included in projects that are sponsored by non-governmental organizations (NGOs) or mass organizations funded with budget capital or member contributions. According to the press release, such projects are generally successful in approaching poor customers. No information on the owners of Vietnam Business Finance is publicly available.