MICROCAPITAL BRIEF: Central Bank of Nigeria Inspecting Microfinance Institutions with Provisional Licenses, Plans to Cut Number of Microbanks “Drastically”

The Central Bank of Nigeria (CBN), the nation’s central banking authority, recently announced that it has commenced inspections to assess the level of compliance with its operational guidelines at the 103 microfinance institutions (MFIs) that were granted approval-in-principle after being among the 224 MFIs that had their licenses revoked in September 2010.

MICROFINANCE PAPER WRAP-UP: Reaching the Poorest: Lessons from the Graduation Model, by Syed M Hashemi, Aude de Montesquiou; Published by CGAP (Consultative Group to Assist the Poor)

By Syed M Hashemi and Aude de Montesquiou; published by CGAP (Consultative Group to Assist the Poor), March 2011, 16 pages; available at: http://www.microfinancegateway.org/gm/document-1.9.50806/Reaching_the_Poorest.pdf

MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Microfinance Blog Examines Role of Transparency in Strengthening the Microfinance Sector

A recent article on the CGAP Microfinance Blog, which is operated by US-based think tank CGAP (Consultative Group to Assist the Poor), examines the outcome of a discussion on information initiatives in strengthening the microfinance industry that was recently held by CGAP and the Microfinance Information Exchange (MIX), a US-based nonprofit. At the event, which was held in Nepal, representatives of microfinance organizations from India, Pakistan, Sri Lanka, Afghanistan, Bangladesh and Nepal discussed the following efforts: 1)Annual state of the sector reports such as the Pakistan Microfinance Network’s (PMN’s) Pakistan Microfinance Review, ACCESS Development’s India: A State of the Sector Report, and rating agency M-CRIL’s Microfinance Analytics Report ; 2)Access mapping such as Microfinance Investment Support Facility for Afghanistan’s (MISFA’s) monthly performance reports, PMN’s Micro WATCH in Pakistan and Sa-Dhan’s Microfinance Map of India; and 3)Interest rate transparency such as the report on India from US-based nonprofit MFTransparency.

MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Technology Blog Reviews Lessons Learned from Branchless Banking in Brazil

The CGAP Technology Blog, operated by US-based think tank CGAP (Consultative Group to Assist the Poor), recently posted an article by Kabir Kumar and Yanina Seltzer that reviews branchless banking in Brazil, whereby agents such as retailers and post offices serve as links between banks and customers. The article is the first of a planned series that examines the state of branchless banking in different countries.

MICROCAPITAL BRIEF: Fitch Ratings Stresses Importance of Single Regulator for Indian Microfinance Sector

Multiple Indian newspapers have cited an unnamed report on Indian microfinance regulation from global ratings agency Fitch that reportedly states that a single regulatory body is crucial to ensuring a stable Indian microfinance sector and that future legislation affecting microfinance should be developed through cooperative efforts between state and federal authorities.

MICROCAPITAL BRIEF: Wall Street Journal Publishes “India Journal: Linking Health and Microfinance” By Somen Soha of Indian Institute of Public Health, Marcia Metcalfe of Freedom From Hunger

Mr Somen Saha, senior lecturer at the Indian Institute of Public Health in the state of Gujarat, and Ms Marcia Metcalfe, director of microfinance and health protection at California-based international development nonprofit Freedom from Hunger, recently co-authored an article that was published on the website of US-based newspaper The Wall Street Journal wherein they argue for the integration of health care with microfinance in India.

MICROCAPITAL BRIEF: Mr Ganesh Sankaran of HDFC Bank Asks, “Can Microfinance Attain Industry Status?”

Mr Ganesh Sankaran, executive vice president of India’s HDFC Bank, argues in a recent article on the Hindu Business Line website that the microfinance industry has reached a bifurcation point wherein its stakeholders must navigate it towards achieving either commercial sustainability or poverty alleviation.

MICROCAPITAL BRIEF: Global Entrepreneurship Program: Is There Greater Need for Investment in Small and Medium-Sized Enterprises (SMEs) Than in Microfinance?

Alan Patricof, Founder and Managing Director of US-based venture capital company Greycroft Partners, argues in a recent issues of Fortune magazine that while microfinance institutions (MFIs) “do play an important role in development, there is an even greater need to support small and medium-sized enterprises (SMEs), which have the greatest potential for job growth in most places around the world” [1].

MICROCAPITAL BRIEF: MasterCard Foundation, Equity Group Foundation Celebrate First Graduation From Financial Education Program in Kenya

The MasterCard Foundation, a Canadian institution that seeks to alleviate poverty through microfinance and education, and Equity Group Foundation (EGF), the social arm of Kenyan microfinance institution Equity Bank, are celebrating the graduation of the first 1,000 participants from their financial education program in Kenya [1].

MICROCAPITAL BRIEF: Bangladesh Probe Clears Dr Yunus of Misappropriation of Norwegian Aid Money

A recent probe by the government of Bangladesh has cleared Dr Muhammad Yunus, founder of Grameen Bank, of misusing Norwegian aid money. The Norwegian government previously cleared Dr Yunus of any allegations of mishandling funds following the release of a Norwegian documentary in 2010 that accused Dr Yunus of diverting approximately USD 96 million of aid money from Grameen Bank to Grameen Kalyan, a sister company of Grameen Bank that offers affordable health insurance to Grameen members.

MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Seeks Public Comment on Draft Revisions to “A Guide to Regulation and Supervision of Microfinance”

Eight years after first releasing the “Guiding Principles on Regulation and Supervision of Microfinance,” CGAP (Consultative Group to Assist the Poor) has released a revised draft of the document (with a revised name) that reflects changes in the global microfinance sector.

MICROCAPITAL BRIEF: MFTransparency Updates Pricing Data for Cambodia’s Microfinance Industry

MFTransparency, a US-based nongovernmental organization (NGO) that provides information on credit products and pricing, has published updated pricing data for Cambodia. The updated data builds on the original data published in 2009 as part of its collection of international microloan product pricing data.

MICROCAPITAL BRIEF: Stanford Social Innovation Review (SSIR) Blog, Ignacio Mas, John Staley Offer Regulators, Financial Service Providers Ideas to Increase Financial Inclusion

Ignacio Mas, Senior Advisor to the Financial Services for the Poor Initiative at the Bill & Melinda Gates Foundation, and John Staley, Director of Finance and Shared Services at Equity Bank of Kenya, recently posted an entry on the Stanford Social Innovation Review (SSIR) blog titled “Are We Serious About Financial Inclusion for All?” [1]. Mr Mas and Mr Staley highlight the importance of increasing access to financial services in developing countries and outline their four suggestions for regulators and financial service providers to advance financial inclusion.

MICROCAPITAL BRIEF: Kiva Intermediates “Green Loans” From Individuals to Promote Clean Energy Efforts Worldwide

To commemorate Earth Day on April 22, 2011, online microfinance intermediary Kiva announced the introduction of “Green Loans” to provide opportunities for individuals to lend as little as USD 25 to businesses and individuals looking to fund clean energy efforts [1].

MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Focus Note Examines Cross-Border Funding of Microfinance

A new Focus Note from CGAP (Consultative Group to Assist the Poor) examines data from CGAP’s annual surveys on cross-border microfinance funding to provide an overview of the microfinance funding landscape and trends in cross-border funding [1].

MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) Providing Islamic Microfinance Services in Iraq Face Governance Constraints Relating to Shariah Law

T Keyzom Ngodup, co-founder and executive director at Ideas sYnergy, an Iraq-based consulting company, recently reported that there are currently six microfinance institutions (MFIs) providing Islamic microfinance services across the Anbar, Kirkuk, Ninewa and Tikrit regions of Iraq. One of these is Al-Takadum, which operates in the Anbar region, the others are not named.

MICROCAPITAL BRIEF: Indonesia’s Commercial Bank Tabungan Pensiunan Nasional (BTPN) Expanding Customized Microfinance Services

The Economist, a UK-based weekly news publication, recently commented on the growth of the microfinance activities of Bank Tabungan Pensiunan Nasional (BTPN), an Indonesian commercial bank. According to The Economist, BTPN’s microfinance portfolio growth is fueled by the informal economy on the populous island of Java including market traders, repair shops and household producers. BTPN equips staff with portable devices to scan fingerprints and bank cards to serve illiterate customers and also facilitate real-time information exchange between its branches and head office. BTPN also offers free financial skills training courses to its microborrowers.

MICROCAPITAL BRIEF: Indian Microfinance Institution Swadhaar Finserve Private Limited (SFPL) Reports Serving 51,500 Clients in 2011, Earns Honors in Smart Campaign’s Call for “Appropriate Collections Practices Tools”

Swadhaar Finserve Private Limited (SFPL), an Indian microfinance institution, recently received honors for “Appropriate Collections Practices” from the Smart Campaign, an initiative that focuses on client protection in microfinance. According to Smart Campaign Tool Development Specialist Leah Wardle, “SFPL won our Call for Tools because their policies and procedures for collections are a good example of how microfinance institutions (MFIs) can provide staff with clear expectations for dignified treatment of clients during collections processes. From their general code of conduct for collections to their specifics on ethical loan recovery procedures, SFPL’s policies clearly embody elements of our Client Protection Principles.” [1]. Smart Campaign’s Client Protection Principles focus on non-coercive debt collection practices and other aspects of good governance such as avoiding client over-indebtedness, privacy practices and transparent pricing.