On November 14, the closing day of the European Microfinance Platform’s (e-MFP’s) European Microfinance Week, Wilson Twamuhabwa, CEO of Uganda’s Ugafode Microfinance Limited, explained that his organization began to offer housing loan products partly because its clients were using 30 percent of their loans for housing anyway.
Category: Interest Rates
SPECIAL REPORT: “Making Microfinance Investment Responsible” Group Wrestles with Inconsistent Data Reporting at European Microfinance Week
On this first day of European Microfinance Week, which is hosted by the 140-member European Microfinance Platform (e-MFP) of Luxembourg, e-MFP’s “Making Microfinance Investment Responsible” Action Group convened to work on the data it has collected on client protection from 10 microfinance investors, rating agencies and NGOs.
MICROCAPITAL BRIEF: Microfinance Companies in Ghana Allegedly “Reaping Heavily” from Small Businesses via High Interest Rates
Microfinance companies in Ghana reportedly are “reaping heavily” from high interest rates charged to consumers, who are often unaware of the flat-rate interest calculation method used by most microfinance companies that forces borrowers to pay interest on the initial loan amount rather than on their remaining balance.
MICROCAPITAL BRIEF: $34m in Loans Provided by Development Bank of Jamaica to Micro-, Small and Medium-Sized Business Created 3,324 Jobs over 5 Years
Development Bank of Jamaica (DBJ), a Jamaican state-owned bank, reportedly has created 3,324 jobs over the past five years through its loan program for micro-, small and medium-sized enterprises (MSMEs).
MICROCAPITAL BRIEF: Central Bank of Nigeria Launches $1.3b Micro, Small and Medium Enterprises Development Fund
The Central Bank of Nigeria (CBN), the country’s central banking authority, reportedly has launched a NGN 220 billion (USD 1.3 billion) Micro, Small and Medium Enterprises (MSME) Development Fund, which is intended to offer loans to microfinance institutions (MFIs) at an interest rate of 9 percent or less per year [1].
MICROCAPITAL BRIEF: Thirty Microfinance Institutions (MFIs) Close in Ghana
Approximately 30 unnamed microfinance institutions (MFIs) collapsed in Ghana during the first quarter of 2013 due to an alleged inability to “sustain their operations.”
MICROFINANCE EVENT: No-Interest Loan Scheme (NILS) New South Wales (NSW) Conference 2013, October 22-23, 2013, Sydney, Australia
Event Name: No Interest Loan Scheme (NILS) New South Wales (NSW) Conference 2013
Event Date: October 22-23, 2013
Event Location: Australian Technology Park, Eveleigh (Redfern), Sydney, Australia
MICROCAPITAL BRIEF: Nepal’s Microfinance Institutions (MFIs) See 21% Growth in Profit During 2013-2014 Amidst Concerns over High Interest Rates Charged to Borrowers
Microfinance institutions (MFIs) in Nepal reportedly are experiencing a period of growth that some say can be attributed to high interest rates charged to borrowers.
MICROCAPITAL BRIEF: Reserve Bank of India Raises Interest Margin Cap to 12% for Larger Microfinance Institutions
For non-banking financial companies (NBFCs) and microfinance institutions (MFIs) of all sizes, the Reserve Bank of India (RBI), the country’s central banking institution, recently set the margin cap, the difference between the amount charged to the borrower and the institution’s cost of funds at 12 percent at least until April 1, 2014 [1].
MICROCAPITAL BRIEF: ProCredit Bank Bulgaria Launches Home Loan Program
ProCredit Bank Bulgaria, a microfinance institution (MFI) and member of Germany’s ProCredit Holding, recently launched a housing lending program for clients purchasing homes and refinancing existing home loans.
MICROCAPITAL BRIEF: Caspian Advisors Launches $40m Caspian Impact Investments (CII) Fund for Microfinance, Affordable Housing, Agriculture
Caspian Advisors Private Ltd., an Indian investment management and advisory services company specializing in the socially-responsible arena, recently launched the Caspian Impact Investments (CII) fund, which is targeted to raise USD 40 million for projects in the areas of microfinance, small business financing, affordable housing and agriculture.
MICROCAPITAL BRIEF: Bank of Tanzania (BOT) Licenses Dunn & Bradstreet, CreditInfo Tanzania as Credit Bureaus
The Bank of Tanzania (BOT), the country’s banking authority, reportedly has approved licenses for CreditInfo Tanzania and Dunn & Bradstreet Tanzania, two privately-owned credit reference bureaus, to act as credit bureaus in Tanzania.
MICROCAPITAL BRIEF: Nepal Rastra Bank, Rural Microfinance Development Center, Center for Microfinance Nepal Urge Microlenders to Lower Interest Rates, Focus on “Deprived” Sectors
Representatives of the Nepal Rastra Bank (NRB), the country’s central bank; the Rural Microfinance Development Center (RMDC), an organization owned by Nepalese lenders that provides wholesale loans to microfinance institutions (MFIs); and the Center for Microfinance (CMF) Nepal, a nonprofit network dedicated to promoting the country’s microfinance industry, reportedly have urged MFIs to lower microloan interest rates, claiming that a desire for greater profits is hindering financial inclusion.
MICROCAPITAL BRIEF: Reserve Bank of India (RBI) May Consider Raising Margin Cap on Microloans if MFIs Relinquish Priority-Sector Status
The Reserve Bank of India (RBI), the country’s central bank, reportedly has refused to remove the 26-percent interest rate cap on loans disbursed by microfinance institutions (MFIs) or to alter margin caps for individual loans to borrowers, despite opposition from within the sector.
MICROCAPITAL BRIEF: Microcredit Regulatory Authority (MRA) of Bangladesh Plans to Lower 27% Microcredit Interest Rate Cap
The Microcredit Regulatory Authority (MRA), a Bangladeshi government body that oversees the operations of NGO microfinance institutions (MFIs), reportedly has announced plans to cut the maximum interest rate MFIs are allowed to charge to an unspecified level.
MICROCAPITAL BRIEF: Bank of Zambia Caps Microfinance Interest Rates at 42%
The Bank of Zambia (BOZ), the country’s central bank, reportedly has mandated a 42-percent cap on the effective interest rates charged by non-bank lending institutions designated as microfinance service providers [1, 2].
MICROCAPITAL BRIEF: Representatives of Nepal’s Rural Microfinance Development Center (RMDC), Nepal Rastra Bank (NRB) Express Cautious Optimism About Microfinance Reducing Poverty While Conceding There Are High Interest Rates, Mission Drift
At a recent event in Kathmandu entitled Revisiting Nepal Microfinance Vision 2015, government officials reportedly cited positive socioeconomic effects from microfinance while shedding light on the challenges faced by the industry.
MICROCAPITAL BRIEF: Microfinance Institution Ujjivan of India Reduces Interest Rates to 25% for New Group Loans, 24% for Returning Customers
Ujjivan Financial Services, a microfinance institution (MFI) based in India, recently decreased the interest rates it charges on loans to poor borrowers by one to two percentage points. The effective interest rate for new group loans is now 25 percent per year, down from 26 percent. The rate for loans to previous group and individual customers is now 24 percent per year, reduced from 26 percent. The rate for first-time loans to individuals was not disclosed.