Fusion Microfinance Private Limited, an Indian non-banking financial company, recently reduced the interest rate it charges on microloans from 24.6 percent to 23 percent per year for pre-existing customers. The rate for first-time borrowers was also 24.6 percent but is now 23.5 percent.
Category: Interest Rates
MICROFINANCE EVENT: 8th Annual Central Asian & Caucasus Microfinance Forum; September 6 – 7, 2018; Almaty, Kazakhstan
Summary of Event: This event will include sessions on topics such as MFI (Microfinance Institution) Challenges After Getting Funds for Sustainable Development; Local-currency Risks from the Fund-management Perspective; How MFIs Can Become More Appealing to Investors; the Green Economy: Microfinance and Poverty; Financial
MICROCAPITAL BRIEF: RBZ Launches Zimbabwe Women Microfinance Bank to Finance Women’s Rural Enterprises
The Reserve Bank of Zimbabwe (RBZ) recently disbursed USD 10 million to form the Zimbabwe Women Microfinance Bank (ZWMB) Limited, an institution whose focus is to provide deposit and lending services to rural women entrepreneurs. Based in Harare, ZWMB is licensed and wholly-owned by RBZ.
MICROCAPITAL BRIEF: Government Policy Moves BancABC, CRDB, NMB to Cut Interest Rates on Loans in Tanzania
Tanzania’s government recently implemented the following measures with the goal of reducing customer borrowing costs: (1) cutting the Bank of Tanzania’s short-term rates on loans to banks to 6.89 percent; (2) lowering the longer-term discount rate to 9 percent; (3) reducing banks’ minimum deposit reserve requirement to 8 percent; (4) creating a credit reference system; and (5) “paying…audited debts to reduce non-performing loans.” In a recent speech,
MICROFINANCE EVENT: Asian Venture Philanthropy Network (AVPN) Conference; June 4 – 7, 2018; Singapore
Summary of Event: This sixth iteration of this event centers on maximizing social impact in Asia through investing and philanthropy. The topics are to include “strategic philanthropy,” investing in education and healthcare, investing with a gender lens, government policy implications, and
MICROCAPITAL BRIEF: Blossom Finance Launches Shariah-compliant Microfinance Fund to Invest in BMT Microfinance Institutions in Indonesia via PBMT Ventura
US-based Blossom Finance recently launched a fund that will lend local-currency on the Indonesian island of Java via Permodalan BMT (PBMT) Ventura, a provider of technical and financial services to Baitul Maal wat Tamwil (BMTs), financial institutions that follow Shariah, Islamic law. PBMT Ventura invests in BMTs that mainly serve market vendors.
Jamil Abbas, a general manager at PBMT Ventura, said, “Ramadan is
MICROCAPITAL BRIEF: BBVA Colombia Borrows $150m from IFC for Housing Lending, Expects Government to Subsidize Mortgage Rates
BBVA Colombia, a unit of Spain’s Grupo Banco Bilbao Vizcaya Argentaria (BBVA), is borrowing USD 150 million from the World Bank Group’s International Finance Corporation (IFC) to on-lend for housing. This comes as the government of Colombia is considering a plan to “reduce prices on the acquisition of housing loans for the middle class through subsidies to mortgage interest rates.”
Oscar Cabrera Izquierdo, the Executive President of BBVA Colombia
MICROCAPITAL BRIEF: Twiga Foods Uses Mama Mboga Owners’ Mobile Phone Data to Assess Credit Risk, Issue Microloans in Kenya via IBM Blockchain System
Twiga Foods, a distributor of produce to 2,600 kiosks in Kenya, recently began lending to its customers to enable them to purchase more inventory. The loans to the owners of the kiosks, known in Swahili as mama mbogas, are distributed via SMS (short message service, also known as text messaging). The system, which was designed by local staff of US-based technology firm IBM, assesses a customer’s creditworthiness based on his or her “purchase records from a mobile device.” It records data using blockchain technology, which has advantages relating to transparency, security and speed.
During an eight-week pilot phase, 220 owners of mama mbogas borrowed an average amount equivalent to
MICROCAPITAL BRIEF: Kaebauk Investimentu no Finansas (KIF) of Timor-Leste Designing Mobile Banking for Women, Farmers with Support from IFC, Australia’s Government
Kaebauk Investimentu no Finansas (KIF), a non-banking financial institution in Timor-Leste, is partnering with the World Bank Group’s International Finance Corporation (IFC) to develop a mobile banking system with a “special focus on women.” The goal is to reach 50,000 people, including 10,000 farmers by
MICROCAPITAL BRIEF: India’s Altum Credo Raises $10m from Aavishkaar, PS Pai, Others for Housing Finance
Altum Credo, a housing lender serving low- and moderate-income Indians, recently raised a total of INR 640 million (USD 9.8 million) from investors including Aavishkaar Venture Management Services, an India-based investor seeking to “enhance livelihoods and reduce vulnerabilities for the low-income population,” and PS Pai, who is known for his tenure at the Murugappa Group, an Indian conglomerate. The amounts they invested and the names of the other investors – identified
MICROCAPITAL BRIEF: Branch International Raises $70m in Debt, Equity from Trinity, Victory Park, IFC, Andreessen Horowitz, CreditEase to Expand Digital Financial Services in Africa, India
Branch International, a for-profit lender to 1 million mobile-phone subscribers in Kenya, Nigeria and Tanzania, recently raised USD 70 million with the goal of expanding within Africa, entering the Indian market, and launching savings and transfer services. US-based Trinity Ventures led the fundraising round, and its general partner, Schwark Satyavolu, will take a position on the board of directors of Branch. While the amounts invested by each entity have not been released, the other investors are US-based Victory Park Capital, the World Bank Group’s International Finance Corporation, US-based venture capital firm Andreessen Horowitz, and China-based CreditEase Fintech Investment Fund. Branch’s other shareholders are listed at https://www.branch.co/about.
Branch evaluates the creditworthiness of applicants by harvesting data from their phones: GPS data, contact lists, type of phone, data from social networks, and
MICROCAPITAL BRIEF: Standard Chartered Offering Mobile Banking App in Cote d’Ivoire Without Retail Presence
Standard Chartered, a UK-based bank with operations in 63 markets on five continents, recently began offering mobile banking in Cote d’Ivoire although it has no bank branches there. Users of the bank’s app can open current accounts, earn up to
MICROCAPITAL BRIEF: Barclays Bank of Kenya’s Timiza App Offers Mobile Savings, Loans, Insurance, Bill Payment
Barclays Bank of Kenya recently rolled out Timiza, an app for Android mobile phones that offers mobile banking services via M-Pesa, a mobile money service launched in 2007 by Kenyan internet service provider Safaricom. Timiza accounts are available to individuals as well as groups. To be eligible, one must have
MICROCAPITAL BRIEF: Opera Charging 1% Daily Interest on Short-term Loans in Kenya via OKash Mobile App, M-Pesa
OPay, a digital payment service developed by Norway-based technology firm Opera Software, recently began offering loans as small as KES 1,500 (USD 15) in Kenya via OKash, an app that works on Android smartphones. The minimum interest rate for initial loans is 1 percent per day, with a maximum term of 14 days. Repeat borrowers may apply for loans as large as
MICROCAPITAL BRIEF: Kazakhstan Increasing Funding for Microloans by $31m, Capping Mortgage Interest Rates at 7%
President Nursultan Nazarbayev of Kazakhstan reportedly has announced that his government will increase its funding of “soft loans for small businesses” from USD 31 million to USD 62 million while offering unspecified “special incentives for rural entrepreneurs.”
Mr Nazarbayev also said that the government will lower the cap on mortgage interest rates to 7 percent per year from approximately 16 percent. Meanwhile, it will extend the maximum mortgage term from 20 years to 25 years.
In addition, the number of scholarships for higher education
MICROCAPITAL BRIEF: Fefisol Buys Equity Stake in Microfinance Institution Musoni of Kenya for $1m
MICROCAPITAL BRIEF: Fusion Microfinance of India Raises $12m in Equity from Creation Investments, Oikocredit, Gawa Capital
Fusion Microfinance, a lender to groups of women in India, recently raised INR 800 million (USD 12.4 million) in unspecified portions from US-based Creation Investments, Netherlands-based Oikocredit and Spain-based Gawa Capital Partners. All three of the investors were already shareholders in the microlender. Fusion plans to use the cash to invest in
SPECIAL REPORT: Registering Property, Charging Up to 3% Monthly Interest, Promoting Local Currency for Housing Loans at European Microfinance Week
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the session titled “Building an Enabling Environment for Low-Income Housing Finance,” R V Verma, former Chairman of the National Housing Bank (NHB) (India) and consultant to the World Bank Group, said that “pushing the formal financial system to reach out to the informal sector [presents] a lot of challenges, but also huge opportunities. As part of financial inclusion, housing microfinance has a very important role.” Mr Verma went on to describe the market in India, which has an outstanding mortgage balance of INR 13 trillion (USD 200 billion) but a shortage of 24 million housing units. He also explained efforts to mitigate risk for housing lenders – both credit risk and issues with land title. Among the tools in use is a central registry of outstanding property loans. Mortgage insurance is also available even to informal workers – when lenders are willing to issue them loans.
Adedeji Adesemoye of the Central Bank of Nigeria described his institution’s efforts to address Nigeria’s shortage of 17 million housing units via resources including a loan package of USD 300 million awarded by the World Bank’s International Development Association (IDA) in 2012. While much of this package was for refinancing mortgages, USD 15 million of it was earmarked for housing microfinance. That portion was disbursed to nine microfinance institutions to test lending to existing (non-housing) clients for land acquisition, incremental construction and