The South Korean government has launched “Sunshine Loans,” a new offering under Smile Microcredit Bank – a state-run microfinance program established in 2009 to provide unsecured loans to low-income households through partnerships with the private sector. Over the next five years, the program is slated to extend KRW 10 trillion (USD 8.45 billion) to low-income households. The program will be implemented by a variety of financial institutions, including the National Agricultural Cooperative Foundation, the National Federation of Fisheries Cooperative, the National Credit Union Federation of Korea, the Korean Foundation of Community Credit Cooperatives and several unnamed private mutual savings banks.
MICROCAPITAL BRIEF: National Microfinance Bank (NMB) Launches ‘Juhudi’ Loan Program to Improve Access to Microcredit in Tanzania
The National Microfinance Bank (NMB), a commercial bank in Tanzania, has announced its intentions to provide ‘Juhudi’ loans of TSH 5 million (USD 3,300) to TSH 500 million (USD 330,000) to entrepreneurs in the country. According to Mr Kees Verbeek, the chief commercial officer of NMB, the issue for entrepreneurs is not whether loans are available, but rather if the interest rates, which reportedly vary between 18 to 25 percent in Tanzania, are affordable. Juhudi loans will be distributed at a 15 percent annual interest rate.
MICROCAPITAL BRIEF: Group of 20 (G-20) and Ashoka’s Changemakers Announce Small and Medium Enterprise (SME) Finance Challenge 2010
The Group of 20 Finance Ministers and Central Bank Governors (G-20), a group of leaders from 20 economies, and the US-based nonprofit, Ashoka, have announced that they will be holding a worldwide contest for the best models that catalyze finance for small and medium-sized enterprises (SMEs). The challenge is open to all private sector participants, including private financial institutions, private investors and companies, socially responsible investors, foundations and civil society organizations.
The goal of the Challenge is to identify catalytic and well-targeted public interventions to unlock private finance for SMEs. Maximizing leverage of scarce public resources is at key part of the Challenge.
MICROCAPITAL BRIEF: Unitus Equity Fund Investment in SKS Microfinance Valued at $60m, Partial Exit Expected This Week
Unitus Equity Fund, a privately-funded microfinance investment fund affiliated with Unitus Inc., a United States-based nonprofit, is reportedly expected to reduce its shareholdings in SKS Microfinance this week by selling approximately 1 million shares during SKS Microfinance’s initial public offering (IPO), which has been covered by MicroCapital several times since March 29, 2010.
MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Releases French Edition of 2009 Arab Microfinance Report
The Microfinance Information Exchange (MIX) in partnership with Sanabel, a nonprofit organization dedicated to advancing Arab microfinance, and CGAP (Consultative Group to Assist the Poor), an independent policy and research center housed at the World Bank Group, recently released the French edition of its 2009 Arab Microfinance Analysis and Benchmarking Report.
MICROCAPITAL BRIEF: Microfinance Experts Express Concern Over Rapid Growth of Microlending by For-Profit Organizations in India
An article in the Financial Times titled, “Microfinancing Spreads Beyond India’s Grassroots,” discusses recent concerns raised by some microfinance experts surrounding the increase in microlending by profit-oriented companies in India.
MICROFINANCE PAPER WRAP-UP: A Business to Call Her Own: Identifying, Analyzing and Overcoming Constraints to Women’s Small Businesses in Latin America and the Caribbean, by Jennifer Powers and Barbara Magnoni, Published by the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB)
By Jennifer Powers and Barbara Magnoni of EA Consultants, Published by the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), April 2010, 100 pages, available at: http://idbdocs.iadb.org/wsdocs/getDocument.aspx?DOCNUM=35282406
The authors of this study focused on the differences between male and female entrepreneurs in six countries in Latin America: Guatemala, Nicaragua, Colombia, Bolivia, Mexico and Peru.
MICROCAPITAL BRIEF: SKS Microfinance Launches India’s First Initial Public Offering (IPO) by a Microfinance Institution
SKS Microfinance has launched India’s first initial public offering (IPO), anticipation of which stretches at least back to a report by MicroCapital on March 29, 2010.
MICROFINANCE PAPER WRAP-UP: Why Microfinance Take-up Rates Are Low & Why It Matters, by Dean Karlan, Jonathan Morduch and Sendhil Mullainathan
By Dean Karlan, Jonathan Morduch and Sendhil Mullainathan, published by Financial Access Initiative, June 2010, available at: http://financialaccess.org/sites/default/files/RFN11_Why_microfinance_takeup_rates_are_low%286-17-10%29.pdf
Evidence indicates that under half of eligible households participate in microfinance. In this paper, Mr Karlan, Mr Morduch and Mr Mullainathan begin by reviewing why take-up rates are important and how they can be measured. Data from thirteen projects show that take-up rates vary from 2 to 84 percent of eligible individuals.
MICROCAPITAL BRIEF: India’s SKS Microfinance Raises $64m in Share Allotment Ahead of Initial Public Offering (IPO)
SKS Microfinance reported it has raised INR 2.98 billion (USD 64 million) in a share allotment to 36 undisclosed anchor investors prior to its initial public offering (IPO) scheduled to open July 27, as was previously reported by MicroCapital on July 22, 2010.
MICROCAPITAL BRIEF: ThoughtWorks to Provide Software Services in Support of The Grameen Foundation’s Mifos Microfinance Technology Platform
ThoughtWorks, a global technology company based in the US state of Illinois, has announced that it will provide software engineering services for The Grameen Foundation’s Mifos Platform, a software platform launched in 2006.
MICROCAPITAL BRIEF: All Commercial Banks in Fiji Establish “Microfinance Units”
The Reserve Bank of Fiji (RBF) has reportedly completed an initiative in which all commercial banks in Fiji have complied with a requirement to establish a “microfinance unit.”
MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $4m to JSCB Senagat and Turkmenbashy of Turkmenistan for SMEs
The European Bank for Reconstruction and Development (EBRD) is providing a USD 4 million loan facility to Turkmenistan for on-lending to small and medium-sized enterprises (SMEs).
MICROCAPITAL BRIEF: Special Provincial Administration of Kocaeli, Turkey, Distributes 993 Microfinance Loans to Female Entrepreneurs
In Kocaeli, Turkey, a “Special Provincial Administration” has reportedly distributed microloans totaling TRY 958,000 (equivalent to USD 629,000) to 993 female entrepreneurs.
MICROCAPITAL BRIEF: International Finance Corporation (IFC) and Gesellschaft fur Technische Zusammenarbeit (GTZ) to Provide Technical Assistance to Philippines’ Central Bank to Spur Lending to Small and Medium-Sized Enterprises
The International Finance Corporation (IFC), a member of the World Bank Group, and Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ – German Technical Cooperation Center), a German government-owned international development organization, are providing technical assistance to the Philippines’ central bank in order to strengthen its supervisory and regulatory capacity for lending to small and medium-sized enterprises. A study last year by Asia Business Monitor showed that approximately 83 percent of small and medium-sized enterprises in the Philippines have experienced difficulties in accessing credit from banks. According to Will Beloe, IFC head of advisory services in the Philippines, greater support from central bank supervisors for commercial banks specializing in lending to small and medium enterprises is expected to increase credit flow to the sector.
MICROCAPITAL BRIEF: Saija Finance Private Limited Addresses Shortage of Microfinance in Bihar, India
Since 2008 Saija Finance Private Limited, a nonbanking finance company with total assets of INR 11 million (equivalent to USD 240,000), has been providing microfinance services in the Indian state of Bihar, which according to a report by the National Bank for Agriculture and Rural Development (NABARD), has a credit-demand supply gap of 96 percent.
MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Releases “Brazil Microfinance Analysis and Benchmarking Report” in Portuguese
The Microfinance Information Exchange (MIX), the microfinance information clearinghouse, has recently released the Portuguese version of its most recent report on microfinance in Brazil, entitled “The 2009 Brazil Microfinance Analysis and Benchmarking Report.”
MICROCAPITAL BRIEF: Monica Brand of ACCION International’s Frontier Investments Group Discusses Emerging Sectors in Microfinance Investment
In a recent interview, Frontier Investments Group Managing Director Monica Brand discusses the sub-sectors within the microfinance investment industry in which Frontier Investments seeks to invest.