by the MicroCapital Team -

SPECIAL REPORT: Nurturing Young Entrepreneurs with Revenue-based Repayments, Accounting Apps, Bank Guarantees

e-MFP logoIn a conversation during the last day of European Microfinance Week, Daniel Buchbinder of Guatemala-based Alterna described his NGO’s fee-based support for young entrepreneurs. Upon Alterna’s founding in 2010, its goal was to help its clients’ businesses develop into more stable operations that could qualify for funding. The NGO had served 2,000 firms by 2015, but funders were not investing in many of Alterna’s clients. Hence the NGO launched Catalyzer, a fund that lends small enterprises USD 10,000 to USD 50,000 on a collateral-free basis. Terms range up to five years, and repayments start at 3 percent of revenue and range up to

by the MicroCapital Team -

SPECIAL REPORT: Fintechs vs MFIs – a Debate at European Microfinance Week

e-MFP logoAt Thursday’s debate on “high-tech” versus “high-touch” financial services at European Microfinance Week, Dorcas Thorpe of Nigeria’s LAPO Microfinance Bank argued that customers in rural areas are more likely to access financial services via high-touch channels such as branches and agents rather than mobile money because they have – on average – lower levels of digital literacy and trust in digital financial services. Gregoire Lecomte of

by the MicroCapital Team -

SPECIAL REPORT: Solar-powered Onions in Senegal, Meso-insurance Against Storms in Nicaragua, Performance-based Interest Rate Reductions for Climate-smart Lending in India

e-MFP logoIn a session on strengthening agricultural value chains today at European Microfinance Week, Daphne van Dam of Cordaid described her organization’s work to support onion farmers in Senegal. The farmers were struggling with the cost of fuel for irrigation. Cordaid was able to partner with local microfinance and solar providers to supply farmers with solar-powered irrigation systems that they could pay for on a schedule attuned to the harvest time of their crop.

Magdalena Arbelaez of Incofin described her firm’s work enabling insurance for farmers in Nicaragua. Rather than microinsurance, which would have been unworkable for many of the smallholder farmers in the region, the project extended

by the MicroCapital Team -

SPECIAL REPORT: Enabling Microinsurance via Technology: RFID Tags Slash Fraud, Costs of Livestock Cover in Rwanda

e-MFP logoAt a well-attended workshop today at European Microfinance Week, Ovia Tuhairwe, the CEO of Radiant Yacu Microinsurance, described her firm’s journey to develop a viable product to insure livestock in Rwanda. On its own, a subsidy of 40 percent from the Rwandan government did not make it easy to insure cattle, pigs and chickens in the country. Before Radiant Yacu moved to its current model in 2019, fraud was rampant, and costs were high at 10 percent of

by the MicroCapital Team -

MICROCAPITAL BRIEF: Quona Capital Closes Fund III with $332m for Fintech in Africa, Asia, Latin America

Quona Capital, an investor in financial inclusion that has offices in 10 countries, recently announced the close of its Fund III, with this latest fundraising round engaging most of Fund III’s ongoing investors and 20 new ones. As a result, the fund has a total of USD 332 million in commitments, and the firm has USD

by the MicroCapital Team -

MICROCAPITAL BRIEF: Standard Life Organization Borrows $3m from Oikocredit to Invest in MSMEs, Education in Nigeria

Standard Life Organization, an NGO in Nigeria, recently agreed to borrow USD 3 million for three years from Oikocredit, a Dutch cooperative. Standard Life provides health services and skills training as well as lending to micro-, small and medium-sized enterprises, including many

by the MicroCapital Team -

MICROCAPITAL BRIEF: Gojo Raises $48m in Equity for Microfinance, Eyeing Digitalization in Asia, Expansion to Africa

Gojo and Company, an investor in financial inclusion in Asia, recently raised USD 48 million in a Series E equity round led by three of its ongoing investors, which were joined by 18 new investment firms and several individual investors. The plan for the fresh cash includes “strengthening the

by the MicroCapital Team -

MICROCAPITAL BRIEF: Buying Maritime Microfinance, Fintech Lender Payhippo Gains Deposit License, Access to Nigeria Inter-Bank Settlement System

Payhippo, a financial technology (fintech) lender to small and medium-sized enterprises (SMEs) in Nigeria, recently agreed to pay an undisclosed sum to acquire Maritime Microfinance Bank. Maritime was founded in 2014 and provides in-person loans and savings services to enterprises in Nigeria that have zero to 500 employees, mainly in the shipping and

by the MicroCapital Team -

MICROCAPITAL BRIEF: CRDB Bank Burundi Borrows $5m from IFC for Agricultural Microfinance, SME Lending

The Burundian affiliate of Tanzania’s CRDB Bank recently borrowed USD 5 million from the World Bank Group’s International Finance Corporation (IFC) for on-lending primarily to smaller agribusinesses in Burundi. IFC has agreed to support the loan with technical assistance on designing products that meet the needs of the target borrowers.

CRDB Bank Burundi Managing Director Fredrick Siwale said, “IFC’s financing will help us enhance the availability of long-term

by the MicroCapital Team -

MICROCAPITAL BRIEF: Zubaida Bai Is New CEO of Grameen Foundation

Zubaida Bai has been selected to lead the Grameen Foundation, a US-based NGO that works to reduce poverty in Africa and Asia via “community agents,” who support people – especially women – in learning how to use digital financial services and farm in a “climate-smart” manner. Ms Bai is the founder of Ayzh, a provider of maternal and

by Renata Samadova -

MICROCAPITAL BRIEF: EU Guaranteeing $113m to Support $490m in Lending by EBRD to MSMEs in Eastern Europe, North Africa, Western Asia

In partnership with the multilateral European Bank for Reconstruction and Development (EBRD), the EU recently agreed to guarantee up to EUR 115 million (USD 113 million) in loans distributed by retail financial services providers (FSPs) to micro-, small and medium-sized enterprises (MSMEs) in selected countries of

by the MicroCapital Team -

SPECIAL REPORT: Inclusive Finance in Africa Amid the Current Food and Climate Crises, in Anticipation of SAM 2023 in West Africa

In anticipation of SAM 2023 (Semaine Afri­caine de la Microfinance 2023), its organisers convened a panel discus­sion on October 19 as part of Accion’s Financial Inclusion Week. The panel illustrates the commitment of SAM’s organisers to nurture on­going dia­logue on the issues faced by the inclusive finance sector. The objective was to share and question the strategies being used to address issues faced by the agricultural sector, which remains one of the least financed due to investors’ per­ception of it as high-risk.

Climate change coupled with social and political turmoil is negatively impacting agricultural value chains in particular and global food security in general. The conflict between Ukraine and Russia is lowering food security and agricultural pro­duction in many developing countries, as the warring nations are two of the largest exporters of key agricultural commodities such as wheat, corn, sunflower oil and fertiliser. The Horn of Africa could suffer the worst effects of the war because of its ongoing food crisis following three years of severe drought, the COVID-19 pan­demic and protracted local conflicts. Market volatility and rises in energy costs, input costs, interest rates and perceived risk are expected to lead to higher costs of borrow­ing, credit crunches, and unmet working capital and liquidity needs.

Addressing these issues at the Financial Inclusion Week panel were:

– Jacques Afetor, Executive Director of Assilassimé Solidarité, a Togolese MFI supporting

by the MicroCapital Team -

MICROCAPITAL BRIEF: Citing “Impatience with the Pace,” Calvert Impact Restructures to Boost Microfinance, Green Investment

US-based NGO Calvert Impact Capital is rebranding itself as Calvert Impact, a name it has given to the NGO that will hold a group of subsidiaries that will continue to serve retail investors, institutional investors and financial advisors. CEO Jennifer Pryce stated, “We found that our original organizational framework sometimes prevented us from going bigger and bolder…. Our strategy reflects our impatience with the pace of adoption across the capital markets. We…need to double down on what we know works in and for communities.”

Calvert Impact subsidiaries will continue with the organization’s past activities, such as offering Community Investment Notes in denominations as small as

by the MicroCapital Team -

MICROCAPITAL BRIEF: Visa Foundation Donates $2m to Opportunity International to Support Microfinance, Small-business Lending to Women in Africa

US-based nonprofit microfinance network Opportunity International recently secured a grant of USD 2 million from the Visa Foundation, an affiliate of US-based payments firm Visa. The goal is to facilitate Opportunity in routing an additional USD 14 million via its affiliated financial services providers (FSPs) in Democratic Republic of the Congo, Ghana, Nigeria and Uganda to micro- and small businesses owned by women. The two-year grant is to fund services for: (1) business owners and farmers, such as training in financial literacy, business management and agricultural practices; and (2) partner FSPs, such as technical assistance in developing gender-oriented policies and financial incentives for serving women, such as guarantees, interest-rate buy-downs and collateral buy-downs. A collateral buy-down – where an FSP might

by the MicroCapital Team -

MICROCAPITAL BRIEF: To Fund Biogas Digesters, Cookstoves in Kenya, Sumac Microfinance Bank Borrows $2m from Spark+ Africa

Kenya’s Sumac Microfinance Bank recently secured a three-year loan of USD 2 million from Spark+ Africa Fund, an investor in “modern energy solutions.” Sumac is to use the funds to expand its Kawi product, which funds solar panels, fuel-efficient stoves and biogas digesters. Sumac’s partners include Kenya’s Burn Manufacturing and Mexico-based