International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, recently purchased a USD 48.4 million equity stake in Rizal Commercial Banking Corporation (RCBC), a private commercial bank that was established in the Philippines in 1960, with the intention of enabling RCBC to increase lending to microfinance clients and small and medium-sized enterprises (SMEs).
Category: Trends/Challenges
MICROCAPITAL BRIEF: International Finance Corporation (IFC), Governments of Austria and Japan Train Bankers in Georgia to Provide Financial Services to Small and Medium-Sized Enterprises (SMEs)
International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, is currently training bankers in the nation of Georgia to provide financial services to small and medium-sized enterprises (SMEs). IFC is partnering with the governments of Austria and Japan to offer the three-day program covering strategy and market segmentation, product design, credit risk management and information management systems. The initiative is aimed at building self-sustaining SMEs and strategies for funding these organizations. While reportedly being major drivers of economic growth and job creation in Central and Eastern Europe, SMEs often struggle with financing the growth of their businesses.
MICROFINANCE EVENT: Saïd Business School of Oxford University to Hold Skoll World Forum on Social Entrepreneurship, March 30 – April 1, 2011, Oxford, England
Event Name: Skoll World Forum on Social Entrepreneurship
Event Date: March 30 – April 1, 2011
Event Location: Oxford, England
MICROCAPITAL BRIEF: Microcredit Summit Campaign Releases State of the Microcredit Summit Campaign Report 2011, Reports 128m Poor People Received Microfinance Loans in 2009
The Microcredit Summit Campaign, a project that was launched in 1997 by US-based nonprofit advocacy group RESULTS Educational Fund (REF), recently released the State of the Microcredit Summit Campaign Report 2011, a plenary account of the recent trends, challenges and achievements in the microfinance industry, at the National Press Club in Washington, DC. The report indicated that 128 million poor people received microloans in 2009, more than was recorded in any of the organization’s previous reports. In 1997, 7.6 million were estimated to have received microloans.
MICROCAPITAL BRIEF: Mobile Technology as an Alternative Channel for Foreign Aid Delivery May Increase Access to Finance
Recent developments in mobile technology, including biometric identification and point-of-sale devices, are being considered as alternatives to current foreign aid delivery mechanisms. The possible shift towards electronic transfers of foreign aid comes at a time of rising concern regarding its delivery methods and effectiveness.
MICROCAPITAL BRIEF: Nigerian Microfinance Bank Classic Microfinance Ordered to Sell Assets to Pay Debts to Former Depositors
Abeokuta-based microfinance bank (MFB) Classic Microfinance has been reportedly forced to sell off assets to pay debts it owes to its former depositors. The move is part of a broader effort in Nigeria to repay depositors of over 100 MFBs—including Classic Microfinance—whose licenses were permanently revoked in 2010 after being deemed “terminally distressed and technically insolvent.”
MICROCAPITAL BRIEF: Vijay Mahajan of Indian Microfinance Institution (MFI) BASIX Undertakes 75-Day Journey Across 12 Indian States to Gain Feedback From Poor People
Vijay Mahajan, chairman of Indian for-profit microfinance institution (MFI) BASIX, began a 75-day journey in January 2011 on foot, public transport and car across 12 Indian states to obtain direct feedback from poor people on the effect of microfinance on their lives. Mr Mahajan began his journey amidst criticism that BASIX charges unreasonably high interest rates.
MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN) Directs Microfinance Banks to Adopt Technology and Shared Service Platforms, Hints at New Microfinance Policy Framework
The Central Bank of Nigeria (CBN) recently mandated that microfinance banks (MFBs) adopt information technology infrastructure and utilize shared service providers—organizations that provide services such as cash processing and currency sorting for multiple banks—by June 2011 as concerns over struggling MFBs persist. CBN reportedly will offer financial assistance to MFBs to facilitate compliance with the directive. Use of the shared service platforms is also expected to help MFBs reduce operating expenses.
MICROCAPITAL BRIEF: Malaysian Islamic Banking Team Visits Interest-Free Shariah Microfinance Program Developed by US-based Helping Hand for Relief and Development
A team from the Islamic Shariah Research Academy, a Malaysian outfit aimed at providing avenues for the development of Islamic finance, recently visited an interest-free microfinance program based on Islamic lending principles that was developed by Helping Hand for Relief and Development (HHRD), a US-based humanitarian relief and global development outfit that operates in 16 countries in Africa and the Middle East. The team, headed by Dr Lal Akram Din, chairman of the academy, came to Islamabad, Pakistan, to learn how HHRD incorporates Islamic practices such as murabaha, a form of interest-free loans, into its microfinance programs. Dr Din reportedly suggested that Malaysian microfinance institutions (MFIs) could benefit by implementing some of the practices employed by HHRD.
MICROFINANCE EVENT: 14th Annual Microfinance Centre (MFC) Conference, “Reorienting Microfinance Towards Balanced Growth”, May 18 – 20, 2011, in Prague, Czech Republic
Event Name: 14th Annual Microfinance Centre (MFC) Conference, “Reorienting Microfinance Towards Balanced Growth”
Event Date: May 18 – May 20, 2011
Event Location: Prague, Czech Republic
MICROCAPITAL BRIEF: International Association of Microfinance Investors (IAMFI) Releases Report “Charting the Course: Best Practices and Tools for Voluntary Debt Restructuring in Microfinance”
The International Association of Microfinance Investors (IAMFI), a US-based NGO, recently released a report, “Charting the Course: Best Practices and Tools for Voluntary Debt Restructuring in Microfinance”, that aims to develop guidelines for debt restructuring for microfinance institutions (MFIs).
MICROCAPITAL BRIEF: US-based Nuru International Offers Microfinance Services to Rural Households in Kenya Through Mobile Banking Technologies
Nuru International, a US-based outfit that seeks to empower poor people in the Kuria district of Kenya through access to clean water, food, healthcare, education and microfinance, recently began using the Mifos 2.0 cloud-based management information system (MIS), a software tool designed for microfinance institutions (MFIs), and M-PESA, a cellphone-to-cellphone money management service, to increase access to basic financial services for rural households in Kuria.
MICROCAPITAL BRIEF: Commercial Banks Look to Serve Small and Medium-Sized Enterprises (SMEs) in Honduras
Commercial banks in Honduras have expressed increasing interest in expanding lending to small and medium-sized enterprises (SMEs) according to a recent report from Honduran newspaper Impulso Microempreserial.
MICROCAPITAL BRIEF: Government Housing Bank of Thailand Enters Microfinance Arena with Plan to Extend Mortgages to Low-Income Households
The Government Housing Bank (GHB), a government-owned financial institution that primarily provides mortgage financing, has announced its plan to streamline its operations in order to improve access to its mortgage-provision services for low-income households.
MICROCAPITAL BRIEF: Bangko Sentral ng Pilipinas (BSP) Study Indicates High Density, Advanced Technology, Larger Profits in Philippine Banking Sector
According to a report from the Malaya Business Insight, a Philippine newspaper, a study by Dr Johnny Noe E Ravalo of Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, offered a range of data on the banking sector in the Philippines including that the bank density is 8.6 banks per 1,000 square kilometers, at least five banking offices exist in every municipality or city, there are approximately 10,700 persons per banking office, 207 microfinance banks exist nationwide and the largest concentration of banks (32 percent) occurs in the capital. The actual report by Dr Ravalo is not available online.
MICROFINANCE EVENT: International Conference on Islamic Banking and Finance in Quatre Bornes, Mauritius, April 5 – 6, 2011, to Include Microfinance Session
Event Name: International Conference on Islamic Banking and Finance
Event Date: April 5 – April 6, 2011
Event Location: Quatre Bornes, Mauritius
MICROCAPITAL BRIEF: Thailand’s Ministry of Finance Launches Community Banking Program Based on Microfinance Model of Grameen Bank, Bank for Agriculture and Agricultural Cooperatives (BAAC) Sets Aside $321m for Lending, Staff Training
As part of its five-year financial sector development plan, Thailand’s Ministry of Finance along with the Bank of Thailand (BOT), the central banking authority in Thailand, has launched a community banking program that mirrors the model of Grameen Bank of Bangladesh. The program, which aims to improve access to finance for poor people in rural areas, is set up so that each community bank will be partly owned and run by members of the community, with financial support provided by state-owned banks when required. Personal guarantees offered by other members of the community will serve as collateral for the loans extended.
MICROCAPITAL BRIEF: MFTransparency, Grameen Crédit Agricole Microfinance Foundation Partner to Host West African Transparent Pricing Workshop in Senegal, March 3, 2011
MFTransparency, a US-based nongovernmental organization (NGO) that aims to provide information on credit products and pricing, and Grameen Crédit Agricole Microfinance Foundation, a nonprofit organization established in Luxembourg in 2008, recently announced that the two outfits have partnered to host the West African Transparent Pricing Workshop on March 3, 2011, in Dakar, Senegal. The event will bring together representatives of microfinance institutions (MFIs), microfinance networks, government officials and financial regulators for a one-day training workshop to promote pricing transparency standards followed by a half-day conference on current topics in West African microfinance markets.