MICROCAPITAL BRIEF: Lok Capital of Mauritius Seeking $100m for Third Fund, First Round Scheduled to Close by April 2015

Lok Capital, a Mauritius-based venture capital fund that focuses on microfinance and other social businesses in India, reportedly is seeking to raise USD 100 million for a new fund that will focus on financial inclusion as its key priority, with agriculture and energy as secondary areas of interest [1]. Continue reading

MICROCAPITAL BRIEF: Assets of “Several” Microfinance Institutions (MFIs) Frozen by Azerbaijani Government

An anonymous source has informed MicroCapital that several microfinance institutions (MFIs) in Azerbaijan have had their bank assets frozen by the government over the past few months. Continue reading

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MICROCAPITAL BRIEF: Mozido Raises $185m from MasterCard, Wellington Management, Individual Funders to Expand Operations

Mozido, a US-based mobile payment and marketing software company, recently raised USD 185 million in capital in the first round of its Series B financing to expand its mobile and payment services in Africa, China, Europe, India, Latin America and the Middle East. Continue reading

MICROCAPITAL BRIEF: US Agency for International Development (USAID) to Provide $71m to Government of India for Banking, Clean Energy, Water and Sanitation

The US Agency for International Development (USAID), a government agency that provides international economic and humanitarian assistance, recently committed up to USD 71 million to the Government of India to support the country’s banking, clean energy and water and sanitation sectors. Continue reading

MICROCAPITAL BRIEF: European Investment Bank (EIB) to Loan $31m to AccessBank Azerbaijan for On-lending to Small, Medium-Sized Enterprises (SMEs)

The Luxembourg-based European Investment Bank (EIB), the long-term lending bank of the European Union (EU), recently announced that it is extending an intermediated senior loan totaling EUR 25 million (USD 31 million) to AccessBank Azerbaijan, a microfinance bank (MFB) in Azerbaijan, for on-lending to small and medium-sized enterprises (SMEs) in the country. Continue reading

MICROCAPITAL BRIEF: Global Systems for Mobile Association (GSMA) Launches Code of Conduct for Mobile Money Providers

The Global Systems for Mobile Association (GSMA), a UK-based association of 1,000 mobile operators and associated companies, recently launched a “Code of Conduct for Mobile Money Providers” to provide guidance on best practices for its members. Continue reading

MICROCAPITAL BRIEF: Bank of Thailand (BOT) to Aid Non-Bank Lenders in Providing “Nano-Loans” of $3040 to $3650

The Bank of Thailand (BOT), the country’s central bank, recently announced that it will introduce a “nano-financing” financial education scheme to enhance the ability of non-bank lenders to provide “nano-loans” that range from THB 100,000 (USD 3040) to THB 120,000 (USD 3650) and carry an annual interest rate of 30 to 36 percent. Continue reading

MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) May Establish $200m Loan Facility for On-lending to Micro-, Small, Medium-Sized Enterprises (MSMEs) in Kazakhstan

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral financial institution, recently announced that it is in the final stage of consideration for the establishment of a “Kazakhstan MSME Framework,” a credit facility totaling KZT 36 billion (USD 200 million) for on-lending to micro-, small and medium-sized enterprises (MSMEs) in the country. Continue reading

SPECIAL REPORT: Youth Are Less Risky Borrowers? European Microfinance Week Participants on Serving Young People via Leasing, Peer Education, Automatic Teller Machines (ATMs)

Countering the perception that youth are riskier borrowers than older clients, Maria Perdomo, the manager of the UN Capital Development Fund’s YouthStart program, recently presented data from seven African microfinance institutions (MFIs) showing that all but one have lower rates of portfolio at risk (PAR) within the segments of their portfolios serving youth than organization-wide. Nonetheless, she noted, youth often make up a disproportionately small share of an MFI’s customer base because loan officers believe they are less likely than others to repay, which would threaten the bonus that many loan officers receive when more of their clients do repay their loans. Continue reading

SPECIAL REPORT: On Microbusiness Support in Conflict Zones, a Discussion at European Microfinance Week

Major David Beskow of the US Military Academy told a crowd at European Microfinance Week, about distributing microgrants in eastern Baghdad, Iraq, largely to women shop-owners for refrigeration, generators or inventory. Funded by the Iraqi government and the US Army’s Commander’s Emergency Response Program, each grant ranged in size from USD 500 to USD 5,000. Although no repayment was required, each beneficiary business was documented through photos and other means before disbursal and after one and six months, in the presence of local police. Continue reading

SPECIAL REPORT: Distinguishing Multiple Lending from Over-indebtedness at European Microfinance Week

“Multiple borrowing was endemic,” in Bangladesh as of 2008, says Shameran Abed, the director of microfinance at Bangladesh-based Brac International, “but we didn’t know if this was bad, although we knew it was a risk.” Mr Abed was speaking this morning at the opening plenary of the last day of European Microfinance Week, which is organized by the Luxembourgish NGO European Microfinance Platform (e-MFP). In the past, he explained, the members of borrowing groups were good at letting Brac staff know who was a good credit risk. As the market was getting saturated, “Groups became less cohesive, so we couldn’t totally rely on them to tell us if individuals were becoming overindebted.” Continue reading

SPECIAL REPORT: Kompanion of Kyrgyzstan Wins $125k European Microfinance Award on Microfinance and the Environment for Pasture Land Management Training

Kompanion Wins EMAThe Kompanion Financial Group, a microfinance institution (MFI) in Kyrgyzstan, was selected today from three finalists to receive the Fifth European Microfinance Award, which includes a cash prize of EUR 100,000 (USD 125,000). Pictured at the right are Her Royal Highness The Grand Duchess of Luxembourg and Olesya Paukova the development director of Kompanion upon her receipt of the award on behalf of the MFI. Continue reading

 MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Provides $12.5m to Fibabanka of Turkey to Support Small, Medium-Sized Enterprises (SMEs)

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), will disburse a EUR 10 million (USD 12.5 million) senior loan to Fibabanka, a Turkish commercial bank, for lending to small and medium-sized enterprises (SMEs). Continue reading

SPECIAL REPORT: European Microfinance Week Participants: Transparency, Competition, Product-specific Rate Caps Can Lower Microloan Interest Rates

To open the two-day conference portion of European Microfinance Week, which is hosted by the 130-member, Luxembourg-based European Microfinance Platform (e-MFP), panelists and attendees addressed “Balancing financial inclusion, market stability and client protection.” Narda Sotomayor, who leads the Department of Microfinance Analysis at Peru’s Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones, stated that “MFIs [microfinance institutions] moving further down market to serve new people is risky, as this group has less financial education, less collateral. An institution’s credit portfolio can deteriorate quickly unless its lending methodology is revised as part of a dynamic process.” On the issue of increasing financial capability, she added, “We find synergies between financial education and stability. This also leads to benefits for institutions and the whole system.” Continue reading

MICROCAPITAL BRIEF: The MasterCard Foundation, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) Provide $6.5m to Launch Accion Africa Board Fellowship

Accion, a US-based nonprofit organization that offers services such as microenterprise loans and business training in 32 countries; The MasterCard Foundation, a Canadian nonprofit that promotes financial inclusion and education in Africa and other emerging markets; and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch development bank, recently partnered to launch the Accion Africa Board Fellowship in an effort to promote improved corporate governance and risk management practices in financial institutions assisting people with low incomes. Continue reading

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MICROCAPITAL BRIEF: Symbiotics Issues Bonds Totaling $9.3m to Prasac of Cambodia, AccessBank Azerbaijan 

Symbiotics Group, a Swiss for-profit provider of investment and business services, recently issued bonds totaling USD 9.3 million to Prasac, a Cambodian microfinance institution (MFI), and AccessBank Azerbaijan, a microfinance bank (MFB) in Azerbaijan. Continue reading

SPECIAL REPORT: Rural Action Group Discusses Product Ecosystems, Marital Strife at European Microfinance Week

The Rural Outreach & Innovation Action Group of the European Microfinance Platform (e-MFP) met today as part of a full day of Action Group meetings at European Microfinance Week, which is being hosted in Luxembourg by e-MFP, a 130-member NGO. Michael Tarazi, a senior financial sector specialist at CGAP (Consultative Group to Assist the Poor) argued against pushing lending products on new rural clients, instead proposing a multi-stage approach. For example, farmers can be offered mobile phones for free, with the promise of receiving information such as crop management suggestions via SMS (text message). Then crop buyers can purchase access to the farmers’ phones, such as to request the preparation of a wholesale load of crops from a group of the farmers at a given price. This can increase the income of the farmers, putting them in a better position to repay future loans for improvements to their processes. As Mr Tarazi put it, “Finance comes at the end; first you develop the digital ecosystem with other valued services such as information.” Continue reading