This brief argues that research and analysis of sex-disaggregated data can allow stakeholders to accelerate the financial inclusion of women, bridging the gaps in women’s account ownership and finance for women-owned micro-, small, and medium-sized enterprises (MSMEs). Building on its 2018 Data Bootcamp on
SPECIAL REPORT: Digitizing Microfinance – Silver Lining of the Pandemic?
Ciprian 
Panturu of Belgium-based cooperative PHB Development opened a European Microfinance Week session on financial services providers (FSPs) moving toward digital services with a joke: “Who got the FSP to ‘go digital,’ the CEO, the CFO?” The answer, of course, is “COVID!”. Unlike before the pandemic, when FSPs were looking into digital services and clients were often unconvinced, Mr Panturu said, “Now there is a clear pull from the customer side.”
Jessica Schicks of the Belgian Investment Company for Developing Countries (BIO) agreed, “Client uptake has been a challenge in past. COVID is helping overcome digital literacy and trust issues.” However, she warned,
MICROCAPITAL BRIEF: Juvo, Mastercard to Promote Alternative Credit Scoring Platform to Microfinance Institutions, Banks in Latin America, Caribbean
Juvo, a US-based financial technology (fintech) startup that uses transaction data analysis to create credit profiles for individuals in emerging markets, recently partnered with Mastercard to distribute its Financial Identity as a Service (FiDaaS) platform to financial services providers in Latin America and the Caribbean (LAC). For people without traditional credit histories, the FiDaaS platform uses
MICROCAPITAL BRIEF: IKEA Foundation, Swiss Agency for Development and Cooperation, USAID Invest $30m in Aceli Africa, Guarantor of Loans to Agricultural SMEs
The IKEA Foundation, an affiliate of the Sweden-founded IKEA group of furniture companies; the Swiss Agency for Development and Cooperation (SDC); and the US Agency for International Development (USAID) recently made a joint investment of USD 30 million in Aceli Africa, a US-based nonprofit. Aceli encourages lending to small and medium-sized enterprises (SMEs) in the agriculture sector, typically by depositing
SPECIAL REPORT: Lessons, Tools for the Pandemic from Prior Microfinance Crises
Deborah Drake of Accion’s CFI opened a European Microfinance Week session on crises in microfinance by noting that the effect of COVID-19 on the financial inclusion industry “is a different crisis because it is global.” In past crises, which were centered on a single economy, microfinance investors had sufficient capacity to inject into stronger institutions to help them survive. The global nature of the current downturn, however, may exceed the capacity of investors to sustain “worthy” financial services providers (FSPs) in certain markets. “There is inevitable
MICROCAPITAL BRIEF: COFIDES Launches $145m Huruma Fund to Deliver Microfinance to 45k Farmers on 4 Continents
Compañia Española de Financiación del Desarrollo (COFIDES), a development finance institution controlled by the Spanish government, recently launched the Huruma Fund, an investment vehicle with commitments of EUR 120 million (USD 145 million) to assist rural farmers in Asia, sub-Saharan Africa, and Latin America and the Caribbean via a range of intermediaries. Seventy percent of Huruma’s portfolio will be deployed via
SPECIAL REPORT: During Pandemic, VSLAs Support Members Struggling with Barriers to Income, Education, Gender-based Violence, Lack of PPE
During a European Microfinance Week session on village savings and loan associations (VSLAs), speakers from several affiliates of Switzerland-based CARE International described their organizations’ responses to the COVID-19 pandemic. As the pandemic set in, they surveyed members of VSLAs, which commonly include 30 women, in various formats to learn how they were adjusting to the pandemic and what support they need.
Maryam Garba Usman of CARE Nigeria described her organization’s survey of 100 VSLAs, largely via an interactive voice response telephone system. The team also used a mobile app to distribute information on COVID-19 and a range of gender-related issues. Most groups continued to meet in person, incorporating social distancing. In addition to accessing financial services, VSLA members addressed problems such as gender-based violence, child marriage, interruptions to children’s education and
MICROCAPITAL BRIEF: Accion Venture Lab Invests Equity in TerraMagna, Fintech Using Satellite Imagery to Help Agribusinesses Lend to Farmers in Brazil
Accion Venture Lab, a unit of US-based nonprofit Accion, recently took an equity stake of undisclosed size in TerraMagna, an agricultural financial technology (fintech) startup in Brazil that partners with retailers of farming inputs on underwriting and funding loans to smallholder farmers. To review loan applications, TerraMagna uses a
MICROCAPITAL BRIEF: Nasira Guaranteeing $35m in Digital Lending by Sasfin to SMEs Owned by Migrants, Women, Youth in South Africa from Emergency COVID-19 Facility Funded by EU, FMO
The Netherlands Development Finance Company, a public-private partnership also known by its Dutch acronym FMO, recently selected Sasfin Bank of South Africa to be the first beneficiary of an emergency risk-sharing facility intended to counter the impacts of the COVID-19 pandemic. The facility is part of FMO’s Nasira fund, which guarantees bank loans to
SPECIAL REPORT: Lessons from Giving Away, Selling Microinsurance with Remittances
As part of the ongoing search for models that can make microinsurance profitable, the Luxembourg-based nonprofit ADA partnered with UAE-based insurtech Democrance to sell policies to migrant workers in Dubai as they send money to family in their home countries. The incentive for remittance providers to participate is that the draw of microinsurance can increase their customer base and allow differentiation from competitors.
The target population is migrants from India and the Philippines, who are generally tech savvy and aged 25 to 45 years old. Most workers earn up to AED 4,000 (USD 1,100) per month and send about a quarter of that amount home. Rise, a UAE-based facilitator of financial services to migrants, enrolled 1,000 customers by
MICROCAPITAL BRIEF: The Currency Exchange Fund (TCX) Raises $200m in Equity from EU, IFC, KfW, PROPARCO to Manage FX Risk for Microfinance, Other Impact Investments
The Currency Exchange Fund (TCX) recently raised a total of USD 200 million in equity financing that it will use to lower the foreign-exchange risk of third-party impact investments in developing nations. TCX hedges emerging-market currencies to support investments
SPECIAL REPORT: Protecting Consumers, Tracking Business Cash Flows, Cutting Costs for Digital Microfinance
During a session entitled “Digital Credit Beyond Consumer Finance” at European Microfinance Week 2020, Michael Rothe, the co-founder of UK-based Flow, argued that there are both good and bad players in digital lending. He said that “most development finance institutions think digital credit is dangerous” and that “because providers are not being differentiated, Flow is being lumped in with” consumer finance. In fact, Flow is a fintech that lends to businesses only. During the COVID-19 pandemic, some Flow customers – many of whom operate shops that offer mobile-money services as a sideline – had to close down due to government restrictions on travel and trade. However, those that remained open saw an uptick in transactions. This is partially because governments encouraged the use of mobile money in an effort to minimize virus transmission. While other lenders stopped operating during the early days of the pandemic, Flow continued to lend, resulting in brand loyalty that Mr Rothe describes as very high. The ratio of the firm’s portfolio at risk peaked at
MICROCAPITAL BRIEF: AFD Loans $356m to IFAD to Assist Rural Farmers in Developing Sustainable Agriculture, Accessing Microfinance, Fighting Hunger, Responding to Climate Change, Enduring COVID-19 Pandemic
Agence Française de Développement (AFD), the overseas development agency of the French government, recently loaned EUR 300 million (USD 356 million) to the UN’s International Fund for Agricultural Development (IFAD) to assist small-scale rural farmers in developing nations. The funds are intended for managing natural resources,
MICROFINANCE PAPER WRAP-UP: “The Landscape for Social Investments in Southern Africa;” by Dr Frank Aswani, Nancy Kairo, Oluwatoyin Adegbite-Moore, Rachel Keeler; Published by African Venture Philanthropy Alliance (AVPA)
This report presents research on “social” investors in Angola, Botswana, Mozambique, South Africa, Zambia and Zimbabwe. The authors define social investment as “financial and non-financial capital deployed according to rigorous investment principles to generate positive social and environmental impact, with varying financial return expectations.” The dataset draws on
SPECIAL REPORT: Local Market Data, Resilience During Pandemic, Securitization, Land Title Systems Enable Housing Microfinance, Micro-mortgages
During European Microfinance Week 2020, Maria Claudia Rojas of the Netherlands’ Triple Jump described her firm’s experience managing the MicroBuild Fund it created with US-based Habitat for Humanity in 2012. Compared with Triple Jump’s portfolio as a whole, MicroBuild has maintained higher asset quality, and that margin of superiority has doubled during the COVID-19 pandemic.
Lucie Astier Such of the French government’s AFD explained her agency’s role in providing technical assistance, loans and data to support housing finance in developing countries. Part of this effort involves connecting households and microfinance institutions (MFIs) with reputable builders and suppliers of construction materials. One tool for this purpose is
SPECIAL REPORT: Working with Central Banks to Extend Microfinance to Forcibly Displaced Persons (FDPs)
At Thursday’s European Microfinance Week session on serving forcibly displaced persons (FDPs), Mariam Jemila Zahari of the Alliance for Financial Inclusion (AFI), a Malaysia-based network of financial regulators from 90 countries, described her organization’s work in Afghanistan, Mauritania and Rwanda. The Central Bank of Mauritania, for example, used AFI’s peer-learning model to
SPECIAL REPORT: Danone, Incofin, Water.org: WASH Sector is Already Investible
During one of the Friday sessions of European Microfinance Week 2020, Dina Pons of Belgium-based Incofin Investment Management explained a partnership with France-based food company Danone through which the organizations are building a 10-year equity fund to invest in expanding access to clean water in developing countries. Since 2007, the Danone Communities arm of Danone – mostly funded by its employees – has invested in access to drinking water on a proof-of-concept basis. Now Danone believes the sector has matured from the incubation stage to the investible stage. The company selected Incofin to help it invest in proven models, with a technical assistance component and monitoring of factors such as affordability, limiting plastic usage and
SPECIAL REPORT: Muktinath Bikas Bank of Nepal Wins $119k European Microfinance Award for Excellence in Savings
From the European Microfinance Platform (e-MFP): Banks’ traditional activities include the collection of savings, the distribution of loans and the provision of means of payment. Credit products (also known as micro-credit solutions) were the first products to be developed in inclusive finance. Being more lucrative for the service provider, loans have long been the only type of product offered by banks. Yet, savings products also carry many advantages. For vulnerable, excluded and low-income populations, savings help secure a