Dr Muhammad Yunus, the founder of Bangladeshi microfinance institution (MFI) Grameen Bank, recently argued that the Arab world has “misinterpreted the system’s true principles” by operating it as a “charity affair” [1].
Category: Regulation
MICROCAPITAL BRIEF: In Center for Financial Inclusion (CFI) Report, “Opportunities and Obstacles to Financial Inclusion,” Microfinance Stakeholders Cite Financial Education as Top Need
The Center for Financial Inclusion (CFI), an affiliate of US-based nonprofit ACCION International, recently released a report titled “Opportunities and Obstacles to Financial Inclusion”, that identifies client financial education as the top opportunity in the microfinance sphere [1].
MICROCAPITAL BRIEF: Due Diligence Critical as Indian Banks Select Business Correspondents to Downscale to Microfinance, Opines Ramesh S Arunachalam
Indian rural finance practitioner Mr Ramesh S Arunachalam recently addressed the need for due diligence in the business correspondent (BC) model that the Reserve Bank of India (RBI), India’s central banking authority, adopted in 2010 to increase financial access for low-income people [1].
MICROCAPITAL BRIEF: Consortium on Financial Systems and Poverty (CFSP) Researchers Posit Weak Financial Sectors in Developing Countries Encourage Microenterprises at Expense of Economic Growth
In a recent paper, “Finance and Development: A Tale of Two Sectors,” published in the academic journal American Economic Review, researchers affiliated with the US-based nonprofit Consortium on Financial Systems and Poverty (CFSP), conclude that poor access to financing opportunities in developing countries makes it harder for entrepreneurs to start large-scale businesses like manufacturing [1].
MICROCAPITAL BRIEF: Ahmed El Bardai of Egyptian Microfinance Institution Reefy Predicts Boom in Lending to Small and Medium-Sized Enterprises to Boost National Economy
Mr Ahmed El Bardai, founder and chief executive of the Egyptian for-profit microfinance institution (MFI) Reefy, expects the country’s next government to focus on small and medium-sized enterprises (SMEs) to boost the economy that is facing a huge budget deficit and declining gross domestic product [1].
MICROCAPITAL BRIEF: Bank of Ghana Issues New Licensing Regime to Regulate Microfinance Industry
In an attempt to improve regulation of microfinance institutions (MFIs) in the country, the Bank of Ghana (BoG), the central bank of Ghana, recently issued new operating rules and guidelines under the Non-bank Financial Institutions Act 2008. Among those being regulated are ‘susu’ companies, which are named after a traditional, informal means to save and borrow.
MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Mandates Banks Open 25% of New Branches in Rural Areas; Banks May Offer Only Limited Financial Services
The Reserve Bank of India (RBI), the country’s central banking authority, recently published circulars that will require new and existing banks to open one quarter of new branches in towns with populations of less than 10,000 people in an effort to further the government’s financial inclusion agenda.
MICROCAPITAL BRIEF: Chuck Waterfield of MFTransparency Explores Ideas to Make Microfinance Prices More Transparent
Mr Chuck Waterfield, founder and CEO of MFTransparency (MFT), a US-based nongovernmental organization (NGO) that collects and publishes information on microcredit products and pricing, recently contributed to the CGAP (Consultative Group to Assist the Poor) blog to suggest ideas for regulations that could encourage more transparent pricing in microfinance [1].
MICROCAPITAL BRIEF: Indian Government Publishes Draft of Microfinance Institutions Bill, Would Make Reserve Bank of India (RBI) Sole Regulator, Establish Microfinance Development Council, Microfinance Development Fund
After months of deliberations and input from academics, policymakers and practitioners, the Indian government has published a draft of its “Microfinance Institutions (Development and Regulation) Bill,” as the first version of a future authoritative policy to govern the domestic microfinance sector.
MICROCAPITAL BRIEF: South Africa’s National Treasury Releases Policy Document, “The South African Microinsurance Regulatory Framework,” to Address Access to Insurance, Consumer Protection for Low-Income Households
In a recent press release, the National Treasury of the Republic of South Africa, the body responsible for managing government finances, released a policy document titled, “The South African Microinsurance Regulatory Framework,” to address the “challenges to improve access to insurance and consumer protection for the lower income families in the country” [1].
MICROCAPITAL BRIEF: United Bank of India to Loan $22m to Microfinance Institution Bandhan Financial Services Amid “Opening Up of Bank Credit”
The government-owned United Bank of India (UBI), recently sanctioned a loan of INR 100 crore (USD 22.5 million) to Bandhan Financial Services, a microfinance institution (MFI) in India [1].
MICROCAPITAL BRIEF: World Bank Working Paper, “Small vs. young firms across the world: contribution to employment, job creation, and growth” by Meghana Ayyagari, Asli Demirgüç-Kunt, Vojislav Maksimovic Explores Economic Contributions of Small and Medium Enterprises (SMEs)
In a recent World Bank policy research working paper, Meghana Ayyagari, Vojislav Maksimovic and Asli Demirgüç-Kunt offer a database on the contribution of small and medium-sized enterprises (SMEs) and young firms to total employment, job creation and productivity growth across 99 developing economies.
MICROCAPITAL BRIEF: Central Bank of Kenya Requires Mobile Phone Carriers to Adopt Payment Card Industry Data Security Standard
The Kenyan Ministry of Information (MOI), through the Central Bank of Kenya (CBK), is newly requiring mobile phone firms to adopt new measures to protect their systems from improper access and to file related security audit reports on an annual basis.
MICROCAPITAL BRIEF: CGAP Reports State Bank of Pakistan (SBP) Removing Regulatory Barriers to Branchless Banking
CGAP (Consultative Group to Assist the Poor) reports that the State Bank of Pakistan (SBP), the nation’s central banking authority, recently announced modifications to its branchless banking regulations that include: removal of the requirement to have one’s fingerprint scanned to open an account; increases in transaction limits and the elimination of the maximum balance; and introduction of “Level 0” accounts that can be opened electronically, without physical paperwork.
MICROCAPITAL BRIEF: Editorial Touts Financial Literacy, Microsavings to Increase Financial Inclusion in Indonesia
A recent editorial in The Jakarta Post, a newspaper in Indonesia, examines the issue of access to financial services in Indonesia and highlights financial literacy as an important element in increasing financial inclusion [1].
MICROCAPITAL BRIEF: Social Performance Task Force (SPTF) Releases Proposed “Universal Standards for Social Performance” in Microfinance
The Social Performance Task Force (SPTF), an initiative set up in 2005 to improve the social performance management of microfinance institutions, released its proposed Universal Standards for Social Performance at its recent annual meeting in the Netherlands.
MICROCAPITAL BRIEF: Cuba May Allow Microfinance as Part of Modernization of Economic System
A microcredit system reportedly may be launched in Cuba as part of a reform program adopted by the government which specifies that “the credit policy will be essentially oriented towards providing necessary support for activities that stimulate national production and generate hard currency income or replace imports, as well as activities that promote development ”[1].
MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas Reduces Fees, Loosens Branch Restrictions to Promote Financial Inclusion in the Philippines
Bangko Sentral ng Pilipinas (BSP), the central bank of the Republic of the Philippines, reportedly is proposing to cut the fees for opening new bank branches and to lift restrictions on the opening of bank branches in the eight “restricted areas” of metro Manila.