The Microcredit Summit Campaign, a project that was launched in 1997 by US-based nonprofit advocacy group RESULTS Educational Fund (REF), today released a report indicating that between 1990 and 2008 approximately 10 million Bangladeshis rose above the international poverty line of USD 1.25 a day.
Category: Trends/Challenges
MICROCAPITAL BRIEF: International Finance Corporation (IFC) Invests $35m in Equity of Indian Microfinance Institution (MFI) Bandhan Financial Services
The International Finance Corporation (IFC), the investment arm of the World Bank Group, a multilateral development finance organization based in Washington DC, will make an INR 1.6 billion (USD 35.1 million) equity investment in Bandhan Financial Services, a microfinance institution (MFI) based in Kolkata, India, to expand its operations in the country. The deal is reportedly the largest equity investment in an Indian MFI since the turmoil in the microfinance industry in Andhra Pradesh began in late 2010.
MICROCAPITAL BRIEF: Retail Microfinance Institution (MFI) Loans Taking Two Months to Process in Andhra Pradesh, India
Since the state government of Andhra Pradesh implemented a law in October 2010 that requires microfinance institutions (MFIs) to get approval from district officials before disbursing loans, it now reportedly takes approximately two months to process loans.
MICROCAPITAL BRIEF: Microfinance Under Scrutiny – Arguments For and Against From the Daily Star of Bangladesh and Forbes Magazine
Since the onset of the debt crisis in the Indian state of Andhra Pradesh during the last quarter of 2010, in which borrowers stopped making payments on their loans to microfinance institutions (MFIs), microfinance has come under intense scrutiny.
MICROCAPITAL BRIEF: Old Mutual South Africa (OMSA) Partners With Shoprite to Launch Pay-When-You-Can Funeral Microinsurance
Old Mutual South Africa (OMSA), a financial services outfit based in Cape Town, in partnership with Shoprite, a local retailer based in Western Cape, recently launched a “Pay-When-You-Can” funeral insurance plan aimed at low-income individuals who cannot commit to making regular monthly payments.
MICROCAPITAL BRIEF: Mexican Microfinance Bank Compartamos Banco Looks To Expand in Other Latin American Nations
Carlos Danel, an executive vice president and co-founder of Mexican microfinance bank Compartamos Banco, recently said that the bank is looking to expand into other countries that have similar markets to Mexico, particularly other Latin American countries.
MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Drafts Technical Guide, “Advancing Savings Services: Resource Guide for Funders,” for Public Review
CGAP (Consultative Group to Assist the Poor), an independent policy and research center that is housed at the World Bank Group, recently drafted a technical guide entitled “Advancing Savings Services: Resource Guide for Funders” that is intended to help donors and investors understand savings mobilization as it relates to microfinance.
MICROCAPITAL BRIEF: MFTransparency Launches Transparent Microfinance Pricing Initiative in Togo and Benin
MFTransparency, a US-based nongovernmental organization launched in July 2008 that aims to provide information on credit products and pricing, the Association of Micro Finance Institutions in Togo (APIM-Togo), the Association of Microfinance Institutions of Benin (FNM) and the Association of Decentralized Financial Systems of Benin (Consortium ALAFIA) are partnering to expand MFTransparency’s Transparent Pricing Initiative to Togo and Benin with the aim of providing training on interest rate calculations, publishing online pricing information and promoting consumer protection.
MICROCAPITAL BRIEF: Kenyan Microfinance Start-Up Remu DTM Limited Acquires Deposit-Taking License
The Central Bank of Kenya (CBK), Kenya’s central banking authority, has granted a license to start-up microfinance institution (MFI) Remu DTM Limited (Remu). The Microfinance Act of 2008 allows the CBK to license, regulate and supervise DTMs—institutions that provide loans to micro- or small enterprises and low-income households, and that receive money by way of deposits. Previously, MFIs could issue loans but were not allowed to take money from the public.
MICROFINANCE PAPER WRAP-UP: Is There a Business Case for Small Savers? by Glenn D Westley and Xavier Martin Palomas, published by CGAP (Consultative Group to Assist the Poor)
By Glenn D Westley and Xavier Martin Palomas, published by CGAP (Consultative Group to Assist the Poor) as Occasional Paper 18, September 2010, 23 pages, available at: http://www.cgap.org/p/site/c/template.rc/1.9.47356/
MICROCAPITAL BRIEF: Bill and Melinda Gates Foundation Provides $10m for Haiti Mobile Money Initiative (HMMI) in Collaboration with US Agency for International Development (AID)
The Bill and Melinda Gates Foundation, in collaboration with United States Agency for International Development (AID), has announced the award of its “First to Market” prize of USD 2.5 million to Jamaica-based mobile operator Digicel and its Canadian partner bank ScotiaBank as part of the Haiti Mobile Money Initiative (HMMI), a competition created by the US-funded Haiti Integrated Finance for Value Chains and Enterprises (HIFIVE) in June 2010 to encourage partnerships between mobile operators and banks to launch mobile money programs.
MICROCAPITAL BRIEF: Luxembourg Fund Labeling Agency (LuxFLAG) Releases Study Analyzing Microfinance Industry, Performance of Microfinance Investment Vehicles (MIVs)
The Luxembourg Fund Labeling Agency (LuxFLAG), an organization that certifies whether investment vehicles actually invest in the microfinance sector, has released a study analyzing 2009 and early-2010 trends in the microfinance industry as well as the performance of microfinance investment vehicles (MIVs) that were carrying the LuxFLAG certification label during the period covered in the study.
MICROCAPITAL BRIEF: SKS Microfinance Announces Interest Rate Slash in India
SKS Microfinance, a for-profit microfinance institution (MFI) in India, has announced a universal cut in “effective” interest rates charged to microfinance borrowers from 26.7 percent to 24.6 percent.
MICROCAPITAL PAPER WRAP-UP: Do Multiple Financial Services Enhance the Poverty Outreach of Microfinance Institutions?, by Koen Rossel-Cambier, Published by Centre Emile Bernheim and Solvay Brussels School
By Koen Rossel-Cambier, published by Centre Emile Bernheim and Solvay Brussels School, December 2010, 41 pages, available at: http://www.microfinancegateway.org/p/site/m/template.rc/1.9.49256/
MICROCAPITAL PAPER WRAP-UP: Building Social Capital Through Microfinance by Benjamin Feigenberg, Erica Field and Rohini Pande
By Benjamin Feigenberg, Erica Field and Rohini Pande,; Harvard Kennedy School Working Paper no. RWP10- 019; available at: http://dash.harvard.edu/bitstream/handle/1/4449105/Feigenberg_BuildingSocial.pdf?sequence=1
Social capital, defined as “features of social organization, such as trust, norms and networks that can improve the efficiency of society by facilitating coordinated actions”, is built up as a result of repeated interpersonal interactions.
MICROCAPITAL BRIEF: Beijing’s CreditEase Launches Online Referral Engine in Response to Growing Microfinance Sector in China
CreditEase, a Beijing-based financial services firm, has launched an online referral engine in China aimed at connecting investors and the public with borrowers that include graduate students and rural women through partnerships with merchants, microfinance institutions (MFIs) and universities. The company’s microfinance operations are detailed at http://www.yinongdai.com/. While other lending services are handled via http://www.creditease.cn/.
MICROCAPITAL BRIEF: Commercial Banks in Kenya Lower Loan Sizes to Compete with Microfinance Sector
Commercial and retail banks in Kenya, recognizing the increase in demand for microloans in the country, have lowered their loan minimums to compete against moneylenders and microfinance institutions (MFIs).
MICROCAPITAL BRIEF: Founder of Grameen Bank and Nobel Peace Prize Winner Dr Muhammad Yunus Speaks Out Against the Commercialization of Microfinance Institutions (MFIs)
Dr Muhammad Yunus, founder of Grameen Bank and winner of the Nobel Peace Prize for his work in microcredit, has again spoken out against the commercialization of microfinance institutions (MFIs) and their deviation from the mission of poverty alleviation.