Two organizations that facilitate lending to people and small businesses with limited credit histories, US-based Entrepreneurial Finance Lab (EFL) and Singapore-based Lenddo, recently merged. Prior to the merger, the organizations had completed a total of 5 million
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
CGAP (the Consultative Group to Assist the Poor), a nonprofit research center seeking to expand financial services in poor regions, recently announced the establishment of the Platform for Economic Inclusion (PEI) to “accelerate innovation and scaling of graduation-style programming.” Initiated by Bangladeshi NGO BRAC (formerly the Bangladesh Rehabilitation Assistance Committee) in 2011, the graduation approach involves: targeting only
MicroCapital: Do you find that microfinance institutions (MFIs) tend to underinvest in human resources (HR)?
Rüdiger Meister: Definitely! Despite the efforts of many consultants in this field, the crucial role of HR management remains under-estimated. Technical assistance interventions, which often accompany investments into MFIs, tend to focus on discrete areas rather than following a holistic and structured approach to capacity building.
There is also a problem of short-term versus long-term thinking. In the short term, the MFI will function even if there are weaknesses in HR management. But in the long term, the MFI will have to pay for mistakes in areas such as
During October 2017, MicroFinanza Rating (MFR) issued a Microfinance Institutional Rating (MIR) of BB with a Stable outlook to Rangtay sa Pagrang-ay Microfinance of the Philippines. MFR also updated the MIRs of three affiliates of US-based Pro Mujer Incorporated: Pro Mujer Argentina’s was confirmed at BB+ with a Positive outlook; Pro Mujer Nicaragua’s was confirmed at BBB+ with a Stable outlook; and Pro Mujer Mexico’s was upgraded
At the SAM (Semaine Africaine de la Microfinance) conference in Addis Ababa, a wide variety of vendors presented their wares. Among these were several core banking system providers. Antonio Separovic of Oradian previously had set the stage for the conversation at the fintech (financial technology) session organized by Dutch development bank FMO. He argued that microfinance institutions (MFIs) shouldn’t start by thinking about whether to buy a new system, but about where the MFI wants to go and how to get there. “Fintech may be able to reduce the friction to do these things,” he said.
Cameron Goldie-Scot of Musoni agreed: “It’s about what are the challenges in your organization? Is it too expensive to handle cash in rural areas? Do you have trouble getting
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
Italy’s MicroFinanza Rating (MFR) issued two microfinance institutional ratings during September. Palestine’s Asala Company for Credit and Development was assigned a grade of BB+ with a “stable” outlook, and Inkunga Finance of Rwanda was assigned a grade of
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
During July and August, Italy’s MicroFinanza Rating (MFR) issued five microfinance institutional ratings. Morocco’s Attadamoune Micro-Finance was assigned the grade B+ with a stable outlook. Ecuador’s Fundación Espoir and Albania’s FED Invest both earned grades of BB with stable outlooks. Two institutions earned grades of
“The Social Dilemma of Microinsurance: Free-riding in a Framed Field Experiment;” by Wendy Janssens and Berber Kramer; published by Elsevier; March 2016; 15 pages; available at:
This paper analyzes the incentives for individuals to buy health microinsurance while active in borrowing groups. Health issues are consistently among the top reasons people become unable to repay loans.
Now that three years have passed since CGAP and the Center for Financial Inclusion (CFI) at Accion published “The Art of the Responsible Exit in Microfinance Equity Sales,” this subject deserves a re-visit and perhaps expansion of the paper’s general principles into industry guidelines.
As the financial inclusion and impact investment industries mature and grow, so does the issue of how investors committed to advancing financial inclusion can “exit responsibly” from
During May 2017, Italy’s MicroFinanza Rating (MFR), under license from the US-based Smart Campaign, determined that Kyrgyzstan’s Kompanion Bank and FINCA Pakistan have complied with the certification standards derived from the Smart Campaign’s seven client protection
MicroCapital: Why was housing selected as the theme of this year’s European Microfinance Award?
Christoph Pausch: It’s really a question of staying true to the underlying purpose of the Award: to highlight practices that are outside the microfinance mainstream, but are financially sustainable and deliver significant
During April 2017, Italy’s MicroFinanza Rating issued four microfinance institutional ratings. Two of these were to affiliates of French NGO Entrepreneurs du Monde: BB- with a stable outlook to Assilassimé Solidarité of Togo and CC “under observation” to Palmis Mikwofinans Sosyal of Haiti. The other two are
Event Name: Global Symposium on Microfinance: Revolutionizing Microfinance: Insight, Innovation, Inclusion
Dates: May 22 – May 23, 2017
Location: Kuala Lumpur, Malaysia
Summary of Event: This symposium will consist of discussions and presentations on scaling up through innovative channels, deploying digital credit, design thinking, using “big data,” and credit risk assessment and risk management . Following the symposium, the Asian Banking School is offering a three-day training