by the MicroCapital Team -

MICROFINANCE PAPER WRAP-UP: “The Rise and Fall of Global Microcredit – Development, Debt and Disillusion;” Edited by Milford Bateman, Stephanie Blankenburg, Richard Kozul-Wright

This is a summary of a book edited by Milford Bateman, Stephanie Blankenburg and Richard Kozul-Wright; published by Routledge; September 2018; 290 pages; available for purchase at https://www.routledge.com/The-Rise-and-Fall-of-Global-Microcredit-Development-debt-and-disillusion/Bateman-Blankenburg-Kozul-Wright/p/book/9781138714120

The authors of this book discuss the history, concepts and adverse impacts of microfinance as it has been deployed in the Global South since the 1980s. Contrary to the intent of microcredit and associated economic policies to enable low-income people to benefit from entrepreneurship,

by the MicroCapital Team -

MICROCAPITAL BRIEF: Georgia Cracking Down on Consumer “Microfinance,” Capping Interest Rates at 50%

Georgian Prime Minister Mamuka Bakhtadze reportedly stated recently that 630,000 of the 3.7 million people in Georgia have debt they cannot repay. Questionable loans have been disbursed by banks, online lenders and others using the term “microfinance” to describe their services.

One woman earning GEL 150 (USD 58) per month reportedly was able to borrow GEL 5,000 (USD 1,900) from a bank for a

by Erik McDonald -

MICROCAPITAL BRIEF: 30 Microfinance Institutions (MFIs) in Ghana Investigated for Possible Illegal Activity

Allegations of fraud and embezzlement have surfaced against roughly 30 microfinance institutions (MFIs) in Ghana. A preliminary investigation performed by the country’s Securities and Exchange Commission and the Economic and Organized Crime Office

by Nicholas Galimberti -

MICROCAPITAL BRIEF: With Delinquency Up 24%, Sri Lanka Paying Off Women’s Microfinance Loans, Capping Microloan Interest Rates

Sri Lanka’s Ministry of Finance recently announced that it has placed a cap on the interest rate microfinance institutions (MFIs) can charge borrowers at 30 percent per year. This comes as the Central Bank of Sri Lanka has found the microfinance sector’s gross non-performing loan account

by Jared Junkin -

MICROFINANCE EVENT: 11th Convergences World Forum; September 3 – 4, 2018; Paris, France

Sessions at this event will address topics such as social entrepreneurship, clean energy, the UN’s Sustainable Development Goals, and sustainable tourism and consumerism. While some sessions will be offered in English, the primary

by Nicholas Galimberti -

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,

by Jared Junkin -

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

by Jared Junkin -

MICROFINANCE EVENT: Africa Innovation Summit (AIS); June 6 – 8, 2018: Kigali, Rwanda

Summary of Event: The theme of this conference is facilitating development in Africa by empowering entrepreneurs across the continent. The topics include Challenges and Opportunities for Innovation in Africa; Building a Resilient and Competitive Economy for Africa’s Future; 21st Century African Cities; Financing and Scaling up

by the MicroCapital Team -

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

by the MicroCapital Team -

SPECIAL REPORT: “Aadhaar: Lessons for the African Continent?”, by Edmund Higenbottam of Verdant Capital

In 2009, India launched the world’s largest IT project, i.e. the Aadhaar biometric identification program. The program is intended to drive social and financial inclusion, reform public-sector service delivery, improve fiscal management, increase convenience, etc. An Aadhaar number can be viewed as a permanent financial address. Considering that almost the entire Indian population is now enrolled in Aadhaar – the underprivileged as well as the rich – it also can be viewed as a tool for justice and equality.

The program consists of

by the MicroCapital Team -

MICROCAPITAL BRIEF: Malaysia Distributing $6m in Microcredit for Younger Chinese-Malaysians to Boost Their MSMEs via Technology

The government of Malaysia recently committed MYR 25 million (USD 6.4 million) to a microcredit program intended to help Chinese-Malaysian business owners to “evolve their businesses into tech-savvy outfits.” The program, called the Micro-Credit E-Commerce Scheme, is targeting entrepreneurs in Malaysia who are aged 18 to

by the MicroCapital Team -

MICROCAPITAL BRIEF: Agribank of Zimbabwe to Accept 99-year Land Leases as Collateral, Boost Lending to Tobacco, Fruit, Oil-seed Growers

The government-controlled Agricultural Bank of Zimbabwe (Agribank) recently announced that it will begin lending to farmers using 99-year land leases as collateral. This follows an update to local regulations that makes the leases transferable, for example in cases of loan default. The move gives leaseholders access to a pool of

by the MicroCapital Team -

MICROCAPITAL BRIEF: Central Bank of Nigeria, Service Providers Partner to Establish 500k Financial Service Points via Shared Agent Network Expansion (SANE) Program

Under Nigeria’s new Shared Agent Network Expansion (SANE) program, the Central Bank of Nigeria, mobile-money operators, retail banks and “super agents” – organizations of 50 or more financial services agents – have agreed to create a network of 500,000 agents to offer services such as transferring funds to and from family members, vendors and the government. As part of the scheme, 50 million people will acquire biometric-based

by the MicroCapital Team -

MICROFINANCE EVENT: Global Forum on Remittances, Investment and Development Asia-Pacific; May 8 – 10, 2018; Kuala Lumpur, Malaysia

Summary of Event: This forum is intended “to showcase good practices and build partner­ships to leverage the role of remittances in countries and communities of origin towards achieving the Sustainable Development Goals (SDGs)” of the UN. The sessions on May 8 are focussed on the private sector and include topics such as de-risking, encouraging savings and the “Diaspora and impact investment.” An award ceremony will recognize organizations that are “improving transparency, speed, cost, and reliability” of remittances. The second day is more focused on policy and public-private partnerships. The third day includes workshops on topics including

by the MicroCapital Team -

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

by the MicroCapital Team -

MICROFINANCE PAPER ROUND-UP: Measurement: from Financial Access to Economic Empowerment; Savings Groups’ Impact; MFIs’ Role with Start-ups

“Advancing Financial Inclusion Metrics: Shifting from Access to Economic Empowerment;” by Carlos Monteverde, Mahadevan Chidambaram, Matthew Blake and Drew Propson; published by the World Economic Forum; January 2018; 24 pages; available at
http://www3.weforum.org/docs/WEF_White_Paper_Advancing_Financial_Inclusion_Metrics.pdf

The authors of this report address how to improve the measurement of financial inclusion and ultimately how to bridge financial inclusion with financial health. They identify the following mechanisms as critical to successful financial inclusion: (1) payments; (2) savings; (3) credit; and (4) regulation and policy. Regarding the connection of financial inclusion to financial health, the authors consider three case studies: (1) Insight2Impact, a data-analysis company seeking to measure financial inclusion based on the needs of consumers rather than on the products they are offered; (2) the nonprofit Center for Financial Services Innovation (CFSI), which measures “long-term” consumer outcomes in the US; and (3) the application of CFSI’s model to other countries by

by the MicroCapital Team -

MICROFINANCE EVENT: InsurTech: Rising to the Regulatory Challenge; March 20, 2018; Colombo, Sri Lanka

Summary of Event: The goal of this twelfth consultative forum of its kind is to explore how regulators can adjust to working with the hundreds of start-up firms leveraging technology to enter the insurance market. In particular, sessions will address how “to strike a balance between facilitating innovation, increasing the inclusiveness of the insurance sector, and maintaining the conditions for a fair, safe and stable insurance sector…”. Topics will include digitizing applications, premium collection, payouts and other processes as well as