Recent cases of fraud threaten to undermine trust in money transfers by mobile phone, a service which has increased financial inclusion in many countries.
Category: Risks
MICROCAPITAL BRIEF: Mexico, Indonesia, Haiti Use Tiered Savings Account Requirements to Promote Financial Inclusion
Mexico, Indonesia and Haiti are responding to the challenge of balancing financial access with security by creating tiered requirements for savings accounts.
MICROCAPITAL BRIEF: Microfinance Credit Bureau, MiDAS, Launched by Microfinance Institutions in Philippines
Microfinance institutions (MFIs) Taytay Sa Kauswagan Incorporated (TSKI), Opportunity Kauswagan Bank, CARD Bank, CARD NGO, Negros Women for Tomorrow Foundation Incorporated, Ahon Sa Hirap and ASA Philippines signed a memorandum of agreement creating the Microfinance Data Sharing System (MiDAS) in January of this year after an initial pilot phase in 2011 [1].
MICROFINANCE PUBLICATION ROUND-UP: Role Reversal Revisited, Microinsurance Profitability Business Case, Trends in Cross-Border Funding
“Role Reversal Revisited,” by Damian von Stauffenberg and Daniel Rozas, published by MicroRate, 2011, 22 pages, available at http://microrate.com/wp-content/uploads/2012/01/Role-Reversal-Revisited-…
This paper reviews the roles of development finance institutions (DFIs) and private lenders in funding microfinance institutions (MFIs).
MICROCAPITAL BRIEF: “Paris Appeal for Responsible Microfinance” by Convergences 2015 Reaches 600 Signatories
Convergences 2015, a nonprofit based in France that focuses on poverty elimination, is promoting the “Paris Appeal for Responsible Microfinance” in an effort to slow the commercialization of microfinance, arguing that it is inconsistent with development and inclusive finance.
MICROCAPITAL BRIEF: Cambodian Government: Microfinance Interest Rates of Up to 50 Percent Threaten Loss of Land, “Social Instability”
Cambodian government officials reportedly are looking to negotiate down the interest rates on microfinance loans, arguing that current rates are unsustainable for the country’s rural farming population and that defaults are causing many farmers to become landless. [1]
MICROCAPITAL BRIEF: Preferring Sector-Wide Solution, Reserve Bank of India Refuses to Classify Restructured Loans as Performing Assets for Microfinance Institutions BASIX, Sharada’s Women’s Association for Weaker Section (SWAWS)
The Reserve Bank of India (RBI), India’s central banking authority, has refused to give a special exemption to commercial banks, that include HDFC Bank, Corporation Bank and Axis Bank, to restructure loans outstanding to microfinance providers BASIX Group and Sharada’s Women’s Association for Weaker Section (SWAWS) Credit Corporation India Private Limited under a classification other than as non-performing assets [1] [2].
MICROFINANCE PAPER WRAP-UP: “Bank Agents: Risk Management, Mitigation, and Supervision;” by Kate Lauer, Denise Dias, Michael Tarazi; Published by CGAP (Consultative Group to Assist the Poor)
By Kate Lauer, Denise Dias and Michael Tarazi; published by CGAP (Consultative Group to Assist the Poor); December 2011; 24 pages; available at: http://www.cgap.org/p/site/c/template.rc/1.9.55781/
MICROCAPITAL BRIEF: 48 Tanzanian Microfinance Institutions Adopt Code of Conduct Covering Transparency, Client Protection
The Tanzania Association of Microfinance Institutions (TAMFI) has announced that 48 of its member microfinance institutions (MFIs) have adopted a code of conduct. Winnie Terry, TAMFI Executive Secretary, was quoted as having said, “With this code of conduct, TAMFI members are expected to take a leading role to deliver high quality and responsible financial services to the community. The code is intended to make Microfinance Institutions become more responsive to the clients they serve.”
MICROFINANCE PUBLICATION ROUND-UP: Microfinance Product Diversification, Over-indebtedness in Kosovo, Social Inclusion
“Making Microfinance Work: Managing Product Diversification” by Cheryl Frankiewicz, Craig Churchill; published by the International Labour Organization (ILO); December 2011; 612 pages; available for a fee at http://www.ilo.org/global/publications/ilo-bookstore/order-online/books/…
MICROCAPITAL BRIEF: Indian Microfinance Institutions Shift from Lending Mostly to Women Towards Relatively Gender-Balanced Portfolio, Reports Elena Bridgers in Stanford Social Innovation Review
Elena Bridgers, a social researcher based in France, recently authored an article on the website of the US-based Stanford Social Innovation Review exploring the shift of microfinance institutions (MFIs) in India from a primarily “female client base” to a more “gender-balanced portfolio” [1].
MICROFINANCE EVENT: CGAP (Consultative Group to Assist the Poor) Hosts Virtual Conference “Understanding Multiple Borrowing and Avoiding Over-indebtedness Among Clients,” January 12 and 13, 2012
Event Name: Understanding Multiple Borrowing and Avoiding Over-indebtedness Among Clients
Event Date: January 12 – 13, 2012
Event Location: Online
MICROCAPITAL BRIEF: Smart Campaign Calls for Input on Microfinance Client Protection Certification Program
The Smart Campaign, an initiative to improve accountability regarding client protection in the microfinance industry, has called for public input on its Client Protection Certification Program, which has been under development since June 2010.
MICROCAPITAL BRIEF: International Finance Corporation (IFC), India’s Microfinance Institutions Network (MFIN) Promote Reporting to Credit Information Bureau
The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, and the Microfinance Institutions Network (MFIN), a self-regulatory organization of Indian microfinance institutions, are working together to encourage microfinance institutions to start reporting to the country’s Credit Information Bureau, which is intended to promote responsible lending.
MICROFINANCE PAPER WRAP-UP: “Too Much Microcredit? A Survey of the Evidence on Over-Indebtedness;” by Jessica Schicks, Richard Rosenberg; Published by CGAP (Consultative Group to Assist the Poor)
By Jessica Schicks and Richard Rosenberg, published by CGAP (Consultative Group to Assist the Poor), September 2011, 44 pages, available at: http://www.cgap.org/p/site/c/template.rc/1.9.55377/
MICROCAPITAL BRIEF: Center for Financial and Credit Counseling of Bosnia Offers Debt Mediation, Financial Education to Microfinance Clients
The Center for Financial and Credit Counseling (CFKS), a nonprofit established in 2010 in the Bosnian city of Tuzla, has been set up to counter the negative impact of over-indebtedness through financial education, counseling, mediation and debt resolution.
FROM NEXT BILLION: David Satterthwaite on “This World Food Day, Making it Africa’s Last Famine”
The author, David Satterthwaite, is Oxfam America’s head of micro-insurance and risk management and founder of MicroCapital.org. Despite the current severe drought in East Africa and resultant famine in Somalia, northern Ethiopia has thus far escaped this year’s drought. The region has, however, been devastated by lack of rainfall in the past and Satterthwaite’s program was designed to help local farmers overcome periods of severe drought. His work is featured in a World Food Day half-hour documentary special report from ViewChange and Oxfam: “ViewChange: Africa’s Last Famine,” which is available at the end of this post.
I woke up that day in Addis Ababa. It was a morning that I’ve come to think of as typical there: it was sunny, the air was cool with the smell of wood smoke, and slow-moving donkeys shared the city streets with blue taxis. I had been on the job at Oxfam for about a month. A group of us – a number of my Ethiopian colleagues and I – were scheduled to meet with the CEO of Nyala Insurance to discuss a contract to provide weather insurance to farmers in northern Ethiopia.
MICROCAPITAL BRIEF: In Tanzania, Default Rates Up to 10% Push Commercial Lending Rates as High as 24%; Credit Bureau to Open in 2012
With default rates reportedly ranging from seven to 10 percent in Tanzania, commercial banks in the country are charging lending rates between 14 and 24 percent.