At 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 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
The National Bank of Cambodia (NBC) continues to resist suggestions that it soften the decree it made in December 2016 that all financial institutions boost their local-currency lending to 10 percent of their portfolios by December 2019. NBC Director General Chea Serey reportedly said foreign banks struggling to meet the new threshold should partner with microfinance institutions (MFIs) because
The Bank of Ghana recently accused a group of microfinance institutions of operating illegally, including Agro Development Fund Services Limited, Hebron Financial Services, MMM, Money-doubler and Oboanipa Ventures Limited. The government of Ghana is in the process of implementing a Depositors Insurance Act
At the SAM (Semaine Africaine de la Microfinance) plenary on “Public Solutions to Promote Entrepreneurship in Africa,” Kennedy Komba of the Alliance for Financial Inclusion (AFI) explained that his institution’s SME (Small and Medium-sized Enterprise) Working Group comprises 53 regulatory and policy-making bodies. To facilitate the growth of entrepreneurship, these agencies have created collateral registries, adjusted lender liquidity ratios, updated know-your-customer frameworks and established rules for digital financial services. Trainers in Zambia used a financial education game to reach 5,000 people, of whom 80 percent were able to improve their businesses as a result. In Ghana, the Ministry of Agriculture and the Bank of Ghana collaborated to boost local value chains in an effort to reduce costly
During the SAM (Semaine Africaine de la Microfinance) conference today, Willie Mzumala of Malawi’s Tapika Food Products described how he has grown his business over 13 years to employ 9 people year-round plus additional seasonal staff. However, he still is offered loans at interest rates as high as 45 percent. In addition to affordable financing, he sees a need for small and medium-sized enterprises (SMEs) to get help with marketing, getting international exposure and standardizing quality.
Richard Muteti of the Kenya National Federation of Jua Kali Associations repeated Mr Mzumala’s call for help with standardization and more affordable financing. Among other barriers to SME success, he cited lack of appropriately
Today at the SAM (Semaine Africaine de la Microfinance) conference, Laura Foschi of ADA addressed the question of “how to support enterprises as they make the transition from micro- to small and medium-sized.”
Rebecca Rouse of Innovations for Poverty Action (IPA), described how randomized controlled trials can help determine “how can we best create value, spaces and opportunities for small and medium-sized enterprises (SMEs) and SME growth.” For example, evaluating the effectiveness of a business training program is much more enlightening when
HuaXia Finance, an online peer-to-peer lender in China, recently began holding customer funds at Ping An Bank, a Chinese bank, under a “formal online banking depository management system” in order to comply with tightened requirements of the China Banking Regulatory Commission. Michael J Beda, the Director of Expat Investment at HuaXia, tells MicroCapital that his is “the first company to
Myanmar’s Internet Wallet Limited reportedly has received a mobile financial services license from the Central Bank of Myanmar to cover the operations of its subsidiary, OK Dollar,
Event Name: Social Performance Task Force 2017 Annual Meeting
Event Date: June 6 – June 8, 2017
Event Location: Mexico City, Mexico
Summary of Event: This meeting will include plenary speeches, working group meetings and networking sessions relating to financial inclusion regulation, social outcomes data collection, and analysis and advances in “client-centric” technology . The event will begin with an introductory session on the Universal Standards for Social Performance Management (SPM) and the resources available to financial service providers for measuring and improving their social performance. This is the first time this event is taking place in Latin America since 2013.
Event Name: 5th European Research Conference on Microfinance
Event Date: June 12 – June 14, 2017
Event Location: Portsmouth, United Kingdom
The Bank of Ghana (BoG), the financial regulator of the country, is introducing a logo that microfinance institutions (MFIs) can display to help consumers “distinguish between credible, licensed microfinance institutions and unlicensed ones.” BoG also is requiring MFIs to monitor
The non-bank financial institution (NBFI) sector, often referred to as the alternative finance sector or the shadow banking sector, around the world is largely dependent on the institutional market for funding. By regulation, NBFIs in most markets are prohibited from gathering deposits or restricted from transactional banking services, which are critical to attract deposits. In most markets, banks themselves are reluctant to lend to NBFIs, given the potential long-term competitive threat. For example, Capitec of South Africa and Equity Bank of Kenya, which are now very much fully-fledged banks, have roots as NBFIs. In South Africa, the deepest and broadest market in Africa, NBFIs have been largely focused on borrowing from the domestic market.
This is not without risks given, for example, the significant reversal in domestic investor sentiment following the collapse of African Bank in August 2014. African Bank’s largest peer, Capitec, was less affected because
LOLC (Cambodia) Plc, a microfinance institution (MFI) that is 60-percent owned by LOLC Micro Investment of Sri Lanka, recently received approval from the National Bank of Cambodia to offer leasing services. It is reportedly the first MFI to gain such permission. Beginning in March, LOLC (Cambodia) expects to offer both businesses and
Success Microfinance Bank, a financial institution in Zimbabwe formerly known as Collarhedge Finance, recently received a license from the Reserve Bank of Zimbabwe allowing it to accept deposits. Microfinance banks in the country
The Nepalese central bank, Nepal Rastra Bank, reportedly has capped microloan rates at 18 percent per year following complaints of microfinance institutions (MFIs) “distributing high dividends by charging borrowers, who are often poor people in rural areas, exorbitant rates…as high as 30 percent.” This follows the declaration of
The government of Zimbabwe recently liberalized its Microfinance Act with provisions such as extending the validity of microfinance institution (MFI) license renewals from one to three years. Zimbabwe’s Finance Minister, Patrick Chinamasa, was quoted as saying financial institution “charges are just too high. With MFIs, it mostly has to do with the fact that investment in the sector is just too low, so companies just end up passing their costs to clients…. Zimbabwe seeks to unlock economic opportunities, especially for the women and youths by expanding access to savings,
At the 2016 Mekong Financial Inclusion Forum, MFIs and funders led this session’s discussion of collaboration. Kelly Hattel, Financial Sector Specialist for the Asian Development Bank, underscored “the importance of having national strategies for financial inclusion and having them be evidence-based. These are important…both as a donor individually and for
The Central Bank of Jordan recently announced a strategy to increase financial inclusion in the country during the years 2018 through 2020. The document calls for increased financial education, client protection and