by the MicroCapital Team -

SPECIAL REPORT: Non-performing Loan Management and Investment – a New Executive Education Offering from Frankfurt School

This year, Europe is emerging from the deepest recession in a gen­eration. But this has not been a normal recession. The number of insolvencies has come down over the last year, and non-performing loans (NPLs) are close to a historic low. Numerous government sup­port measures, such as tax rebates, furlough schemes, moratoria and the suspension of insolvency proceedings were highly effective in temporarily bridging enterprises’ liquidity shortfalls.

However, most of these support measures have come to an end, and many firms’ liquidity buffers are depleted. Meanwhile, a range of sectors will need to confrontSustainable World Academy a fundamental reshaping of their business models. The European Systemic Risk Board, tasked with the big financial stability issues in Europe, speaks of a coming tsunami of insolvencies.

In developing countries, the COVID-19 crisis will be more protracted, and a full recovery is less certain. Many mid-sized companies entered the crisis with significant leverage levels, and the more numerous micro­enterprises are poorly

by the MicroCapital Team -

SPECIAL REPORT: “Financial Inclusion Compass 2021” Reveals a Sector Grappling with the Consequences of COVID-19 – and Trying to Look Beyond It

InEuropean Microfinance Platform 2018, e-MFP launched the first Financial Inclusion Compass, a new annual publication series to collate sector opinions on emerging short-, medium- and long-term trends in the financial inclusion sector. e-MFP is delighted to now publish the English language version of the Financial Inclusion Compass 2021 – the fourth in the series.

The survey on which this paper is based was open in May 2021, with financial services providers (FSPs), investors, donors, researchers and support services providers evaluating and describing the importance of various current Trends, rating future New Areas of Focus, and providing open-comment qualitative input on the expected (and hoped-for) direc­tion of financial inclusion progress.

The survey had two main sections: in Section 1, respondents rated from 1-10 the current importance of a list of 20 Trends and evaluated a list of 16 future New Areas of Focus to rank their highest five in terms of future significance. Optional comments on each were possible. Section 2 had three optional and open-ended questions, with a focus on the impact of the pandemic.

The Compass received 125 responses from 39 countries. A plurality of respondents were FSPs, followed by consultants/support services pro­viders, infrastructure organisations, funders and researchers. On the main geographic focus of respondents’ work, a plurality selected Global, followed by Sub-Saharan Africa, Asia and Latin America.

Trends

Two new trends, introduced in response to the uniquely challenging context of the pandemic, took the top two spots

by the MicroCapital Team -

SPECIAL REPORT: Unlock New Value from Lending Operations: 6 Reasons Why Digital Loan Origination Holds the Key to Lasting Success


If your organization still relies on paper-driven lending processes, you’re missing out on opportunities to cut costs, boost efficiency and tap into new markets. Read on to discover the top reasons you can’t afford to delay making the move to digital loan origination.

Loan origination has long been a complex, highly manual process. It typically involves piles of paperwork, in-person visits and rigorous checks that cost financial providers serious time, money and effort. But this lending landscape is changing fast: Borrowers increasingly expect

by Harriet Ritchie -

MICROCAPITAL BRIEF: BlueOrchard Raises $207m in Equity for COVID-19 Emerging and Frontier Markets MSME Support Fund – Adding IDB, Visa Foundation as Investors

BlueOrchard Impact Investment Managers, a member of the UK-based Schroders Group, recently announced it raised USD 207 million in the second close of its COVID-19 Emerging and Frontier Markets MSME Support Fund, which is intended to counter “the economic consequences of the COVID-19 pandemic” among micro-, small and medium-sized enterprises (MSMEs) in low- and middle-income countries. The new investors in the funding round include IDB Invest, a member of the Inter-American

by the MicroCapital Team -

SPECIAL REPORT: How Do We Build the Right Skills for a Sustainable Future?

There is no doubt that sustainability considerations recently have found their way into many areas of our lives. The global Fridays for Future movement is just one of several calls to action to significantly reduce carbon emissions and make the world more climate-resilient and socially equitable – and thus a better place to live. The adoption of the Paris Agree­ment and the UN’s Sustainable Development Goals (SDGs) are Sustainable World Academydriving demand for low-carbon goods and services around the world. Thus, the sustainability wave has spilled over into the real economy and the finan­cial sector, forcing stakeholders to rethink legacy business models and practices. Environmental, social and governance (ESG) con­sidera­tions, being the main pillars for sustainability, have become key drivers for investment and other business decisions, as sustain­ability-related risks (e.g. climate change) have started to gain wide recognition.

The COVID-19 pandemic: A (final) push for sustainability?

The fragility of unsustainable business models and lack of practices for a resilient and robust economy – as well as survivability – became

by Harriet Ritchie -

MICROFINANCE PAPER WRAP-UP: “SME Finance Loans for Growth,” Published by Symbiotics

This paper offers an analysis of the impact of the SME Finance Loans For Growth (LFG) fund from its launch in 2016 through 2020. LFG is a collaboration of three Swiss organizations, the Symbiotics Group, the State Secretariat for Economic Affairs (SECO) and

by Bradley Shulman -

MICROFINANCE PAPER WRAP-UP: “COVID-19: Crisis as an Opportunity for Urban Cash Transfers?”; by Keetie Roelen, Edward Archibald, Christina Lowe; Published by ODI

Urban areas in developing countries were especially hard-hit by the COVID-19 pandemic due to a range of issues including “overcrowding, poor hygiene and sanitation, and widespread informal employment.” To support urban dwellers and others, many governments across the world implemented cash-transfer programs in response to COVID-19. However, just 16 percent

by Harriet Ritchie -

MICROCAPITAL BRIEF: CGAP, GOGLA, IFC’s Lighting Global Launch PAYGo PERFORM Standards, Seeking to Boost Investment in Off-grid Solar

Two NGOs, US-based CGAP (Consultative Group to Assist the Poor) and the Netherlands-based Global Off-Grid Lighting Association (GOGLA), along with the Lighting Global program of the World Bank Group’s International Finance Corporation (IFC) recently launched a framework for measuring the outcomes of selling off-grid solar products on a pay-as-you-go (PAYGo) basis. The PAYGo Performance, Reporting and Measurement (PAYGo PERFORM) plan “offers the PAYGo solar industry a standardized and transparent set of key performance indicators (KPIs)…

by Sophie Fiala -

MICROCAPITAL BRIEF: CDC Updates Environmental, Social, Governance (ESG) Toolkit for Financial Services Providers, Adding Climate Component

CDC Group, a development finance institution backed by the UK government, recently launched an updated environmental, social and governance (ESG) toolkit to assist financial services providers (FSPs) in addressing common ESG challenges such as corruption, money laundering, and gender-based harassment and violence. It is targeted at

by Teo Lin-Bianco -

MICROFINANCE EVENT: Impact Investing World Forum; September 23-24, 2021; London, UK, with Virtual Option

The Impact Investing World Forum (IIWF) is focused on investments that are in line with concerns such as environmental, social and governance (ESG) criteria and the UN Sustainable Development Goals. The event will feature speakers from

by Teo Lin-Bianco -

MICROCAPITAL BRIEF: Incofin Loans $2m to Bina Artha for Microfinance, Small Business Loans for Rural Women in Indonesia

Recently, Belgium-based Incofin Investment Management (IM) lent USD 2 million from its Incofin CVSO fund to Bina Artha, a microfinance institution (MFI) in Indonesia. Incofin IM acknowledges that

by the MicroCapital Team -

SPECIAL REPORT: SAM 2021 to Take Place in Kigali, Rwanda, October 18-22; “One Is Not Born Resilient But Becomes Resilient: Fostering Inclusive Finance to Better Overcome Crisis!”

From ADA: It’s official! The largest event in inclusive finance on the African continent, the long awaited African Microfinance Week (AMW 2021), will take place in Kigali, in the land of 1,000 hills and mountains: Rwanda. From October 18 to October 22, 2021, the SAM will address the theme of resilience, a concern that is all the more important in these particular times.

This notice is the first in a

by Harriet Ritchie -

MICROFINANCE PAPER WRAP-UP: “Weathering the Storm II: Tales of Survival from Microfinance Crises Past;” by Daniel Rozas; Published by Accion’s Center for Financial Inclusion, e-MFP

Mr Rozas evaluated 16 case studies of microfinance institutions’ (MFIs’) reactions to various crises that arose between 2004 and 2018 as a follow-up to the paper, “Weathering the Storm,” which was published in 2010 as a response to the global financial downturn that began in 2007. The new publication considers “the decade that followed the original paper,

by the MicroCapital Team -

SPECIAL REPORT: e-MFP “Financial Inclusion Compass” Survey of Trends, Forecasts Open Until May 31

From European Microfinance Platformthe European Microfinance Platform (e-MFP): The Financial Inclusion Compass has, since its launch in 2018, grown to be one of the most important ways of taking the “pulse” of the sector, giving practitioners, investors, donors, academics and support service providers the opportunity to evaluate and describe the importance of various current Trends, rate and give opinions on New Areas of Focus, and provide

by Aakansha Shenoy -

MICROFINANCE PAPER WRAP-UP: “Deploying Blended Finance to Mobilize Investment at Scale in Food and Agriculture;” by Bettina Prato et al; Published by SAFIN, Convergence

The authors of this paper discuss the “financing landscape” of the food and agriculture sector and argue in favor of increasing the deployment of blended finance, “the use of catalytic capital from public or philanthropic sources to increase private sector investment.” A report from the 2019 UN Conference on Trade and Development estimates that the private sector could fund

by Tejas Gumudavelly -

MICROCAPITAL BRIEF: Joint Impact Indicators (JIIs) Bridge HIPSO, IRIS+ to Streamline Investors’, Investees’ Measurement of Gender Equality, Job Creation, Climate Impacts

A group of investors recently launched the Joint Impact Indicators (JIIs), a framework for increasing “harmonization in the way that impact investors measure and report on the effects of their investments.” The indicators, which were developed by The Global Impact Investing Network, a US-based nonprofit, and the World Bank Group’s International Finance Corporation, focus on three areas:

by Aakansha Shenoy -

MICROFINANCE PAPER WRAP-UP: “Evidence Review of Women’s Groups and COVID-19: Impacts, Challenges, and Policy Implications for Savings Groups in Africa;” by Eva Namisango et al

This brief offers evidence on how COVID-19 has affected women’s savings groups in sub-Saharan Africa – with a specific focus on Nigeria and Uganda – including how these groups have helped to “mitigate the pandemic’s negative consequences.” In a savings group, members pool their savings, lend out these funds and share the resulting profits. In addition to

by the MicroCapital Team -

SPECIAL REPORT: Christoph Pausch on the European Microfinance Award 2021: Inclusive Finance and Health Care

MicroCapital: Why was “Inclusive Finance and Health Care” chosen as the topic of the European Microfinance Award 2021?

Christoph Pausch: As the past year has shown us all with such unfor­tunate clarity, health is everything. Being healthy allows education to play its role in opening new opportunities; it allows people to earn, invest and employ others; it keeps the economy growing and lets groups and societies prosper. And the opposite is true as well: without health – without health care to help people recover from serious health shocks and to stop minor health issues from becoming serious – it’s so hard for people to prosper.

This is especially true for the global poor – the financially excluded – who typically have volatile and precarious incomes and live in countries without high-quality universal health care. They not only need access to health care, but also the ability to pay for it. Too often this can mean taking on debt and selling income-generating assets or even