The Netherlands Development Finance Company, which also is known by its Dutch acronym FMO, recently disbursed a loan of EUR 3 million (USD 3.5 million) to Agence de Crédit pour l’Entreprise Privée (ACEP) Burkina Faso to support its lending to microenterprises as well as small and medium-sized enterprises (SMEs). FMO sourced the funding from
MICROCAPITAL BRIEF: IFC Loans $50m to Diamond Trust Bank Kenya to Support SMEs Challenged by COVID-19
To support small and medium-sized enterprises (SMEs) that are struggling during the COVID-19 pandemic, the International Finance Corporation (IFC), the private-investment arm of the World Bank Group, recently issued a loan of USD 50 million to Nairobi-based Diamond Trust Bank Kenya Limited (DTB Kenya). The targeted sectors include
MICROCAPITAL BRIEF: EBRD Lends $47m to CaixaBank to Support SMEs in Morocco Amidst Coronavirus Pandemic
CaixaBank, a Spanish retail bank, recently accepted a loan of approximately MAD 430 million (USD 46.8 million) from the European Bank for Reconstruction and Development (EBRD), a UK-based development finance institution that has been investing in Morocco since 2012. CaixaBank is to use the funding to
MICROFINANCE EVENT: Future Banking; September 9-10, 2020; Bucharest, Romania
This event features 25 speakers in a format offering both in-person and virtual options. It will cover a range of technical, marketing, funding and other topics
MICROCAPITAL BRIEF: EIB Lends $12m to Credo Bank for Microfinance in Rural Georgia to Offset Effects of COVID-19 on Food Production
Credo Bank, a microfinance institution in Georgia, recently accepted a local-currency loan in an amount approximately equivalent to USD 11.8 million from the EU’s European Investment Bank (EIB). Credo will use the funds to on-lend primarily as working capital for people living in rural areas,
MICROCAPITAL BRIEF: State Bank of Pakistan Increases Limits on Microloan Size, Annual Income, Gold Loans to Help Microfinance Institutions, Clients Respond to COVID-19 Pandemic
The State Bank of Pakistan (SBP), that country’s central bank, recently took additional steps to relieve pressure on microborrowers and microbanks caused by the COVID-19 pandemic, including the following: (1) for general-purpose loans, increasing the maximum loan size from PKR 150,000 (USD 900) to PKR 350,000 (USD 2,100), with a loosened annual income cap of PKR 1.2 million (USD 7,000) to qualify; (2) for enterprise and housing loans, increasing the maximum loan size from PKR 1 million (USD 6,000) to PKR 3 million (USD 18,000), with an income cap of PKR 1.5 million (USD 9,000); and (3) increasing to 50 percent the portion of a microbank’s gross loan portfolio that may consist of loans secured by gold.
Additionally, SBP is allowing microborrowers to restructure their loans if they
MICROFINANCE PAPER WRAP-UP: “Fintech, Digital Finance and Funding: How the Development Sector Is Channeling Money to Digital Financial Services,” by Howard Miller
This paper outlines a system to “identify, classify and measure the funding flows going to DFS [digital financial services]” from funders such as development finance institutions and private foundations. The objective was to “help the inclusive finance sector better coordinate, fill gaps and identify new pathways for funding the sustainable development of digital financial services for financial inclusion.” Mr Miller’s primary findings were:
1) Development funders had USD 1.95 billion in outstanding commitments as of year-end 2018, 60 percent of which was allocated to
MICROCAPITAL BRIEF: BIO Investing $1.5m in FINCA Malawi for Microfinance, SME Lending
The Belgian Investment Company for Developing Countries, a government-backed institution also known as BIO, recently began disbursing funds as part of a four-year loan of USD 1.5 million to FINCA Malawi, a microfinance institution (MFI) owned by the US-based firm FINCA Impact Finance. The microbank will use the funds for on-lending via its 23 branches and
MICROCAPITAL BRIEF: As Bank of Ghana Intervenes Due to COVID-19 Pandemic, Concerns of Failure, Profiteering Among Microfinance Institutions
The Bank of Ghana, the central bank of the country, recently introduced a series of measures to cushion the effects of the COVID-19 pandemic on microfinance institutions (MFIs). Many MFIs are struggling with liquidity for various reasons including that many have granted their borrowers repayment moratoria of up to 6 months. Citing a recent report from the Bank of Ghana, Samuel Darko, a local researcher, warns that a “liquidity stress-test conducted for the sub-sector shows minimal survival rate for
MICROCAPITAL BRIEF: AXA, FMO, Mirova, Novastar Funds Invest $28m in Equity in Komaza Group for Tree Planting by Rural Farmers in Africa
Four investors recently agreed to place equity totaling USD 28 million in the Komaza Group, a Kenya-based forestry company. Komaza plans to harness the funding to continue its work with smallholder farmers in Africa to use their idle land for growing trees.
Tevis Howard, Komaza’s Founder and CEO explains, “At Komaza, our vision is to become Africa’s largest forestry company, by partnering with farmers to provide a sustainable and hyper-scalable domestic supply of wood. As a result, farmers get a climate-resilient, zero-risk, source of wealth creation for their families, and investors get commercial returns, all while
MICROCAPITAL BRIEF: Banco del País, Citibank, DFC, Microsoft, Government of Taiwan, Collaborate to Support Women-led SMEs, “Gender-smart” Investing, Technology Infrastructure
The US International Development Finance Corporation (DFC), a government-backed institution, recently announced it will participate in the following initiatives promoting the economic empowerment of women:
1) The office of the US President and DFC increased the target of funds to be mobilized through the 2X Women’s Initiative of the Women’s Global Development and Prosperity (W-GDP) Initiative to USD 6 billion. 2X Women was launched in 2018 and has since documented
MICROCAPITAL BRIEF: CAURIE Microfinance of Senegal Borrows $1.4m from Grameen Credit Agricole Foundation, Mostly for Rural Women
Coopérative Autonome pour le Renforcement des Initiatives Économiques par la Micro finance (CAURIE-MF), a microfinance institution in Senegal, recently borrowed the approximate equivalent of USD 1.4 million from the Grameen Credit Agricole (GCA) Foundation, whose head office is in Luxembourg. Based in the city of Thies, CAURIE-MF serves about 80,000 women, including 48,000
MICROCAPITAL BRIEF: Accion’s CFI to Hold 6th Annual Financial Inclusion Week; October 13-16, 2020
The Center for Financial Inclusion (CFI), an initiative of US-based NGO Accion, is planning to hold the sixth iteration of its Financial Inclusion Week (FIW), an annual event aimed at promoting financial inclusion, from October 13 to October 16. FIW 2020 will focus on four of CFI’s priorities: (1) Consumer Protection; (2) Data Opportunities and Risks for Financial Inclusion; (3) Women’s Financial Inclusion; and (4) Financial Services for Mitigating and Adapting to Climate Risk. The event is aligned with the initiative’s recent moves
SPECIAL REPORT: Stakeholders Fearful, But with Tentative Hope Too in e-MFP’s Just-published “COVID-19 Financial Inclusion Compass”
The
European Microfinance Platform (e-MFP) has published the COVID-19 Financial Inclusion Compass, a special edition of the Compass series specifically focused on the current challenges, medium-term priorities, concerns, opportunities and forecasts for a sector facing probably the greatest crisis in its modern history.
The world – the financial inclusion sector included – is in the midst of twin crises: (1) a novel and highly contagious virus with no vaccine or cure that shows no signs of abating; and (2) a genuinely global recession as a result of the unavoidable containment measures put in place. The situation is uncertain and dynamic. Six months from now, the landscape will
MICROCAPITAL BRIEF: Bangladesh Bank Reports Record $2.6b in Remittances During July
The Bangladesh Bank, the country’s central bank, recently reported that Bangladeshis living in other countries sent USD 2.59 billion home during the month of July. This was an increase of USD 760 million over June 2020 and USD 1 billion higher than July 2019. Although some observers expected a fall in remittances due to the COVID-19 pandemic, others cite the following factors as contributing to the increase: requests for aid from Bangladeshis experiencing unemployment and other economic shocks associated with the pandemic;
MICROCAPITAL BRIEF: Symbiotics Launches $10m Bond Issue for Abaco of Peru for Microlending, SME Finance
Symbiotics, a Switzerland-based investment company, recently launched a “social” bond to raise USD 10.2 million to benefit Peruvian Cooperative de Ahorro y Crédito Abaco. The bond is part of the Sustainability, Social and Green Bond Framework of Symbiotics’ entity Micro, Small & Medium Enterprises Bonds SA. The proceeds will flow to Abaco in the form of a 4-year, unsecured senior loan of PEN 36 million. Abaco plans to use the proceeds “to finance small and medium-sized enterprises within the trade, services and agriculture sectors, in particular the
MICROCAPITAL BRIEF: Led by Farmers, Microfinance Borrowers from 21 MFIs in India Boost Repayment Rate from 10% to Over 40%; Yet Many Lenders Remain Starved for Cash
The India-based Information and Credit Rating Agency (ICRA) recently conducted a study of 21 microfinance institutions (MFIs), finding “better-than-expected collection efficiency in June 2020.” During April and May 2020, the MFIs reported a “cumulative collection efficiency” of approximately 10 percent. This rate rose to a range of 40 percent to 70 percent in June, with rural borrowers
MICROCAPITAL BRIEF: TradeCore Platform Facilitates Process of Launching New Fintechs
TradeCore, a financial technology (fintech) firm that assists retail fintechs in navigating regulations, licensing and payment systems, recently established a platform to expedite the launching of new digital financial services providers (FSPs). The platform assists businesses in legal matters, payments and billing related to services such as digital banking, cryptocurrency, investment, know-your-customer (KYC) protocols, and issuing digital and physical Mastercard-branded payment cards. TradeCore CEO Stefan Pajkovic argues,