The two major factors affecting the success of Rural Finance Institutions (RFIs) are the lack of efficient, low-cost operational solutions and India’s overall weak agricultural infrastructure. Continue reading →
Written by Anne-Lucie Lafourcade, and based on research conducted by the MIX: Microfinance Information Exchange on 119 African institutions from 24 countries. This report was released in November 2007 as a 12-page publication of MIX Microfinance Information Exchange Inc. available here.
The growth in microfinance in Africa was inconsistent in 2006 with some regions experiencing dramatic growth in credit while others experienced decline. Kenya experienced the highest growth in credit clientele with an average loan portfolio increase of fifty percent. MFIs in Southern Africa experienced a 59 percent growth in their loan portfolio due to an increase in loan sizes and expansion of services in urban areas. Benin experienced the most declines, with a loss of thirty thousand loan clients in twelve months. Continue reading →
The Janasree Sustainable Development Mission, a non-governmental self-help initiative promoting small and micro-enterprises (SMEs) in India, will be officially inaugurated by Indian Finance Minister Palaniappan Chidambaram on February 2, 2008 at the Janasree Microfinance Summit. Continue reading →
Micro-enterprises and SMEs in the Democratic Republic of Congo will benefit from an equity investment of USD 1.1 million in Advans Bank of Congo and a technical assistance grant of EUR 650,000 (USD 970,000), approved by the Board of Directors of the African Development Bank. Continue reading →
Published by CGAP, January 2006, 16 pages, available for viewing here.
Because most microfinance institutions operate in developing countries where risk of currency depreciation is high and debt restructuring occurs periodically, they are particularly vulnerable to foreign exchange rate risk. A recent CGAP survey not only revealed that 50 percent of MFIs have no protection mechanisms in place, but also indicated a general lack of understanding of both foreign exchange risk and the extent to which MFIs are exposed. This paper seeks to raise awareness of the issue of foreign exchange rate risk within the microfinance sector first, by providing a brief overview of the different components of risk, second, by looking at current techniques employed by microfinance institutions (MFIs) and investors to manage these risks, and finally, by making recommendations on mitigating or avoiding exposure to exchange risk. Continue reading →
In a press release, Standard Chartered’s China division announced that they will provide the China Foundation for Poverty Alleviation (CFPA), a China-based non-profit organization, with a local currency loan facility of 20 million Yuan, equivalent to over 2.75 million USD. According to the press release, this credit will be used to “finance the Microfinance projects aiming to provide financial support to farmers and owners of micro-enterprises in ten counties of seven provinces in China…” This will be the first loan facility by an international bank to a Microfinance Institution (MFI) in China. Continue reading →