As the financial inclusion and impact investment industries mature and grow, so does the issue of how investors committed to advancing financial inclusion can “exit responsibly” from Continue reading →
MicroCapital: Why was housing selected as the theme of this year’s European Microfinance Award?
Christoph Pausch: It’s really a question of staying true to the underlying purpose of the Award: to highlight practices that are outside the microfinance mainstream, but are financially sustainable and deliver significant Continue reading →
The European Microfinance Platform (e-MFP) has begun accepting applications for the eighth iteration of its European Microfinance Award, which is focused this year on financing housing improvements for people with low incomes. The deadline to apply is May 22. The award, which includes a cash prize of EUR 100,000 (USD 106,000), will be presented at European Microfinance Week, which is being held Continue reading →
At Friday’s closing session of European Microfinance Week, representatives of Luxembourg-based MyBucks, US-based Opportunity International and India-based MicroSave argued about the risks and rewards of digital finance services. Vicki Escarra, the CEO of Opportunity International, said, “What we’ve done over the past five years to get to very rural areas is to use these digital channels.… To focus on women in Africa – not just women, but women living in Continue reading →
Paul Luchtenburg, who serves as coordinator for the UN Capital Development Fund in Myanmar, described several of the contrasts in the microfinance industry in Myanmar at European Microfinance Week Thursday. Five years into civilian rule, Mr Luchtenburg says “I’ve never seen a government work so hard. You go to a meeting and the results go up the leadership chain that night…. There’s this rapid push for development.” To accept deposits, institutions must pay at least 10 percent per year and be deemed “sustainable” by the government. However, lending rates are capped at 2.5 percent per month, a level that all of the panelists agreed was too low, especially for serving rural areas. Rommel Caringal, the CEO of the local unit of US-based VisionFund, said, “The inconsistency is causing big problems, but Continue reading →
The Kashf Foundation, a Pakistani nonprofit providing microfinance services and advocacy on social issues, won the seventh European Microfinance Award last night for its support of private schools that serve students from low-income families. In addition to financing the schools, Kashf provides training in areas ranging from classroom management to human resources. The organization also assists Continue reading →
On this first day of European Microfinance Week conference sessions, three participants described their visits to Bangladesh to learn how low-income families there have financed purchases of home solar systems. Tesfaye Befekadu, the general manager of Ethiopia’s Harbu Microfinance Institution, explained, “The exposure visit opened my mind to green microfinance…. I came back from Bangladesh with a lot of knowledge. I collected the managers, and we exchanged information and immediately decided this idea should go to the Board of Directors. Then I asked the Board to explain it to the shareholders.… I can say that all levels of the organization, down to the clients, own this program.” In the year since the visit, Harbu has delivered Continue reading →
MicroCapital: What is the value of social performance management (SPM)?
Lucia Spaggiari & Amelia Greenberg: Financial service providers (FSPs) do not achieve their social goals without deliberately managing their social performance. Providing access to financial products and services can have a neutral or even harmful effect when it is not done responsibly. Even the best-intentioned FSPs have been shocked upon seeing their first data about client outreach, satisfaction and exit. Simply put, they were not reaching their target clients; their products were not well adapted to clients’ needs; and they were not achieving their missions.
MicroCapital: How does housing finance differ from traditional microfinance?
Rajnish Dhall: In India, traditional microloans usually are: (1) sized less than USD 1,000; (2) targeted for productive assets; (3) priced at around 22 percent per year; (4) repaid within less than a year or two; and (5) carry a group guarantee in lieu of collateral. In contrast, the micromortgages that Micro Housing Finance Corporation (MHFC) offers first-time homebuyers: (1) average about USD 8,000 in size; (2) carry interest rates of about 12.5 percent per year; (3) usually have a term of 15 years; (4) are individual rather than group-based; and (5) most importantly, are secured with the home as collateral. While the audience is quite similar, the products are almost at opposite ends of the spectrum.
The European Microfinance Platform (e-MFP), a network of European microfinance stakeholders working in developing countries, recently announced that three finalists for the 7th European Microfinance Award have been selected from 30 applicants: (1) Fundación Génesis Empresarial of Guatemala; (2) Kashf Foundation of Pakistan; and (3) Opportunity Bank of Uganda. Continue reading →
MicroCapital: Why is it important to serve rural markets?
Marina Kortenbusch: In most emerging economies, the rural sector employs a large share of the working population. Developing rural markets is an effective way to boost prosperity by increasing the incomes of individuals whilst also contributing to food security, reducing environmental impact and increasing exports.
MicroCapital: Why is education access the topic of this year’s Award?
Christoph Pausch: Education is the strongest predictor of economic
well-being, and it can also have a major impact on health, women’s empowerment and even population growth. Unfortunately, Continue reading →