by Conner Brannen -

MICROCAPITAL BRIEF: Bank Respublika, a Private Commercial Bank in Azerbaijan, Reduces Interest Rates to Expand Lending for Small and Medium-Sized Enterprises

Bank Respublika, a private commercial bank in Azerbaijan, has reduced interest rates in order to increase lending flow for small and medium-sized enterprises. According to an unnamed bank official, “High levels of liquidity allow the bank to offer the above loan products on unrestricted long-term basis to entities engaged in entrepreneurial activity.” As of April 1, 2010, Bank Respublika held total capital of approximately AZN 56.1 million (USD 9.7 million) and total assets of AZN 334.5 million (USD 415.5 million).

by Jennifer Shevock -

MICROCAPITAL BRIEF: Indian Microfinance Institution Ujjivan Financial Services Reduces Interest Rates, Following Lead of Bandhan Financial Services Private Limited

Ujjivan Financial Services, an Indian microfinance institution, announces that it will reduce borrowing rates on new and renewal loans by 190-290 basis points. As a result, new business loans will cost 23 percent per annum and renewal loans will cost 22 percent per annum beginning in July 2010. As MicroCaptial reported on May 4, 2010, Bandhan Financial Services Private Limited, another Indian microfinance institution, reduced its annual rates on loans possibly triggering the Ujjivan reduction.

by Jennifer Shevock -

MICROCAPITAL BRIEF: MFTransparency Brings Launch of Transparent Pricing Initiative to Bolivia and Ecuador, Funded by the Ford Foundation and MicroNed

MFTransparency, a non-governmental organization which promotes accurate and transparent pricing in the microfinance industry, recently expanded its work to launch its transparent pricing initiative in both Ecuador and Bolivia.  The initiative is being funded by the Ford Foundation, which provided a grant (amount unspecified) to MFTransparency to expand its data collection and dissemination efforts in Argentina, Bolivia, Colombia and Ecuador.

by Julia Korn -

MICROCAPITAL BRIEF: Kerala and Andhra Pradesh, Two States in Southern India, Mandate Non-Banking Financial Companies (NBFCs) and Microfinance Institutions (MFIs) To Register Under Local Money Lending Laws; Mandate Challenged in Supreme Court

Kerala and Andhra Pradesh, two states in southern India, have mandated that non-banking financial companies (NBFCs) and microfinance institutions (MFIs) register under local moneylending laws, but The Shriram Transport Finance Company (STFC), an NFBC in India, has challenged this mandate in Supreme Court [1].

by Julia Korn -

MICROCAPITAL BRIEF: Vastushodh Projects Private Limited Pairs with Micro Housing Finance Corporation (MHFC) to Set Up Housing for Urban Poor in India

Vastushodh Projects Private Limited, a real estate development company in India, is pairing up with The Micro Housing Finance Corporation (MHFC) to provide housing for the urban poor. MHFC has total funds of INR 22.5 million (USD 483,000) and total share capital INR 22 million (USD 473,000) as of March 2009 [1]. The organizations are setting up a micro township located in Yevat, a village in the Pune district of Maharashtra, located in southwestern India.

by Conner Brannen -

MICROCAPITAL BRIEF: In Ecuador, Cap on Interest Rates Pressures Microlenders to Increase Loan Sizes, Sell to Larger Institutions

Ecuador’s central bank, Banco Central del Ecuador (BCE), recently further reduced the cap on annual interest rates to 30.5 percent from 33.9 percent for retail microlenders, and to 27.5 percent from 33.3 percent for all others lenders [1]. Since 2007, when the national government enacted banking reforms allowing the central bank to set a maximum interest rate for all banking institutions, the cap for microlenders has been dropping. According to Javier Vaca, the executive director of Red Financiera Rural (RFR), an Ecuadorian network of organizations that is focused on facilitating and promoting access to financial services, this forces microlenders to increase the average amount of their loans. Some are left with no choice but to sell their portfolios to larger institutions with lower fixed costs [2].

by Christopher Maggio -

MICROCAPITAL BRIEF: Bandhan Financial Services Private Limited, Microfinance Institution (MFI) Based in Kolkata, India, Decreases Interest Rate on Loans from 24 Percent to 19.1 Percent on a Reducing Balance

Bandhan Financial Services Private Limited, a microfinance institution (MFI) based in Kolkata, India, has decreased its annual interest rate on loans from 24 percent to 19.1 percent on a reducing balance.

by Stefanie Rubin -

MICROCAPITAL BRIEF: New York Times Article Addresses High Interest Rates and Mission Drift Among Microfinance Providers

A recent article featured in the New York Times newspaper entitled, “Banks Making Big Profits From Tiny Loans,” argues there is a growing mission drift among microfinance providers and discusses the efficacy of microloans and the need for more transparency in the industry.

by Matthew Castner -

MICROFINANCE EVENT: “MFTransparency Workshops on Transparent Pricing in Ecuador” April 27 to April 29, 2010

MICROFINANCE EVENT: “MFTransparency Workshops on Transparent Pricing in Ecuador” April 27 to April 29, 2010

Event Name: MFTransparency Workshop on Transparent Pricing in Ecuador

Event Dates and Locations: April 27, 2010, in Quito, Ecuador; April 28, 2010, in Ambato,

Ecuador; April 29, 2010, in Guyaquil, Ecuador

Event Website: http://www.mftransparency.org/pages/transparent-pricing-initiative-in-ec…

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

Cost: Free

by Stefanie Rubin -

MICROCAPITAL BRIEF: Government of Bangladesh to Limit Interest Rates for Microfinance Institutions (MFIs)

The Finance Minister of Bangladesh, Mr Abul Maal Abdul Muhith, recently told the Bangladeshi Parliament that, in collaboration with Transparency International Bangladesh, an international non-governmental organization aimed at fighting corruption, the government would limit interest rates charged by microfinance institutions (MFIs).

by Stefanie Rubin -

MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) and CGAP (Consultative Group to Assist the Poor) Criticize Muhammad Yunus’ Method of Judging Microfinance Institutions’ (MFIs’) Interest Rates

Microfinance Information Exchange (MIX) Lead Researcher, Mr Adrian Gonzalez, has published a report on MIX titled, “Analyzing Microcredit Interest Rates: A Review of the Methodology Proposed by Mohammed Yunus.”

by Stefanie Rubin -

MICROCAPITAL BRIEF: Finance Minister of Bangladesh Argues Few Escape Poverty Due to Microfinance, High Interest is Main Challenge Facing Country’s Microfinance Industry

At a recent three-day conference in Bangladesh titled, “Microfinance Regulations: Who Benefits,” the country’s Finance Minister, Mr Abul Maal Abdul Muhith, argued that high interest rates and charges are the main challenges facing Bangladesh’s microfinance industry.

by Stefanie Rubin -

MICROCAPITAL BRIEF: Microfinance Institutions Network (MFIN) Predicts Efforts Will Lower Microfinance Interest Rates in India

The Microfinance Institutions Network (MFIN), a self-regulatory organization of 35 of India’s microfinance companies, is currently working on several projects that it predicts will lower interest rates on microloans.

by the MicroCapital Team -

MICROCAPITAL BRIEF: Wall Street Journal Article Examines “Profit Versus Purpose” Debate in Microfinance Industry

A recent article featured on the Wall Street Journal website entitled “Microfinance’s Midlife Crisis” examines the underpinnings of the debate in the microfinance industry about profit versus purpose.

by Stefanie Rubin -

MICROCAPITAL BRIEF: People’s Bank of China (PBOC) to Legalize Private Lending and Remove Cap on Interest Rates Charged by Microfinance Institutions (MFIs)

The People’s Bank of China (PBOC), the central bank of China, has announced plans to legalize private lending and remove a cap on interest rates charged by microfinance institutions (MFIs).