by Lori Curtis -

MICROCAPITAL STORY: USAID and Netherlands-based Oikocredit Partner to Guarantee $36.2 million for Microfinance Over 10 Years

Oikocredit, a Dutch cooperative investment fund, and the United States Agency for International Development (USAID) announced a partnership which will leverage USD 36.2 million in private financing to support microfinance. USAID will provide a 50 percent guarantee on loans made by Oikocredit for ten years, and this guarantee is intended to increase private-sector financing to microenterprises and small-scale farmers, according to a press release by USAID. USAID has guaranteed loans for Oikocredit in the past, beginning in 2003 but this is the largest guarantee to date. Oikocredit’s loans are channelled through a network of regional offices worldwide and managed by local professionals.

by Iyanna Holmes -

MICROCAPITAL STORY: First MicroFinanceBank Afghanistan Signs €4m Agreement with Germany’s Kreditanstalt für Wiederaufbau

Under an agreement between the governments of Germany and Afghanistan, Germany’s Kreditanstalt für Wiederaufbau (KfW) signed an agreement with Afghanistan’s First MicroFinanceBank (FMFB-A).  Under the agreement, KfW will lend EUR 4 million to Afghanistan’s Finance Ministry, which will then lend the funds to FMFB-A in a 15 year long term credit facility in local currency.  Proceeds will be used to fund the growth of FMFB’s loan portfolio which was USD 19.8 million in loans to over 101,000 borrowers at the end of 2007.

by Lori Curtis -

MICROCAPITAL STORY: Australia’s Christian Super to Invest in Triodos Bank and JPMorgan Microfinance

Christian Super, an Australian Christian-based superannuation (pension) fund, has announced that it will invest an undisclosed amount in two separate microfinance funds run by JP Morgan and Triodos Investment Management. The fund, worth AUS 450 million (US 304 million) is reportedly interested in investing in JP Morgan’s Microinvest II Fund and Triodos Investment Management’s Triodos-Doen, Hivos-Triodos Fund, and Triodos Fair Share Fund. Christian Super CEO Peter Murphy spoke to Australia’s Financial Standard saying that these investments present an excellent opportunity for the super fund as it will provide a good risk diversification tool. He also said that Christian Super has been interested in investing in microfinance for 12 months but that the microfinance market was lacking the sophistication level required for super funds.

by Iyanna Holmes -

MICROCAPITAL STORY: Ayala Corporation, Bank of the Philippine Islands (BPI), and Globe Telecom Announce a New Microfinance Bank in the Philippines

Ayala Corporation, the Philippines’ largest conglomerate, and two of its subsidiaries, inked a deal that will establish what it claims will be the Philippines’ first microfinance bank.  Ayala Corporation, Bank of the Philippine Islands (BPI), the country’s largest bank by market capitalization, and Globe Telecom, the country’s second largest telecommunications company, will form a new company that will extend wholesale microfinance loans to microfinance institutions (MFIs) and use mobile technology to reach retail customers.  The new company has authorized capital of P 500 million, approximately USD 10.2 million.  The group will use BPI’s wholly-owned subsidiary, Pilipinas Savings Bank, as the vehicle for the venture.  The closing of the deal is subject to approval by  the Bankgko Sentral ng Pilipinas (BSP), the central bank of the Philippines, and other regulators.  Ayala Corporation will retain a 20 percent stake and BPI and Globe Telecom will each retain a 40 percent stake.

by Iyanna Holmes -

MICROCAPITAL STORY: BBVA Microfinance Foundation and Bancredito Promote Microfinance Initiatives in Costa Rica

BBVA Microfinance Foundation, the microfinance arm of BBVA Group, a multinational financial services group, and BanCredito, the state owned bank formerly known as Cartago Agricultural Credit Bank,  have signed a collaboration agreement for an undisclosed amount to promote initiatives that would make credit and other financial products accessible to the most disadvantaged sectors of Costa Rica’s population and others in Central America.  “This alliance will result in important benefits for the development of Costa Rica’s microfinance sector, as both of our entities share common objectives: allow people who currently don’t have access to the traditional financial system to be able to establish small production activities that would help them improve their quality of life and that of their families in a sustainable manner,” BBVA’s Mendez del Rio said.

by Lori Curtis -

MICROCAPITAL STORY:Opportunity International Emulates Kiva With The Launch of OptINnow

Opportunity International (OI) announced the launch of OptINnow, a project that allows people to donate online funds which will then be disbursed as microloans. The donor selects an entrepreneur online and then chooses how much he or she will donate. The funds are disbursed through the relevant OI microfinance institution (MFI) Kenya, Mexico or the Philippines, with additional countries being added in the future. The minimum donation is USD 25. While the launch of OptINnow was announced on October 21st, 2008, it began advertising in June, using Facebook and MySpace.

by Lori Curtis -

MICROCAPITAL STORY: Nigeria’s Delta State, Oceanic Bank International and the CBN Partner to Create Microcredit Bank Account

The Nigerian Delta State government is collaborating with the Central Bank of Nigeria (CBN) and Oceanic Bank International (OBI) to create the Delta Oceanic Micro-Credit Scheme Account (DOMSA), it was revealed on October 15th, 2008. In signing a Memorandum of Understanding (MoU), the Delta State government contributed N50 million (USD 424 thousand) in the form of loans to support the first phase of a microcredit trust fund to OBI, while OBI will commit N200 million (USD 1.7 million) to microcredit finance.

by Lori Curtis -

MICROCAPITAL STORY: South Africa’s IDC To Invest Up To US$19.4 million for MFI Startup

The Industrial Development Corporation (IDC) has expressed an interest in creating a microfinance institution (MFI) designed to fill the void that exists of clients not covered by existing development finance institutions and that are considered too risky by commercial banks. IDC, the South African state run national development finance institution, is anticipating investing between R100 million (USD 9.7 million) and R200 million (USD 19.4 million) to set it up, if the plan for the MFI is to go ahead.

by Lori Curtis -

MICROCAPITAL STORY: DFID Expands Microfinance Partnerships in Nigeria with US$ 13.9 million in Funding

The UK Department for International Development (DFID) has become increasingly involved in Nigeria’s microfinance sector over the last three months, with recent donations to two separate Nigerian organizations involved in microfinance. In August DFID donated N12 million (USD 102 thousand) to an Abuja Enterprise Agency (AEA) run project entitled AEA FCT-wide Enterpreneurship Campaign (AFEC), and then again in October announced that it would provide GBP 8 million (USD 13.8 million) over five years to Enhancing Financial Innovation and Access (EFINA), a non-governmental organization (NGO) conceived by DFID.

by Jeffrey Erfe -

MICROCAPITAL STORY: BlueOrchard Microfinance Invests $5.3m and Purchases Equity Stake in Indian Microfinance Institution Asmitha Microfin Limited

On September 30, BlueOrchard Private Equity, the private equity arm of BlueOrchard Microfinance Investment Managers, invested INR 250 million (USD 5.3 million) and purchased a minority stake in Asmitha Microfin Limited, the fourth largest non-banking financial company in India.  This will be BlueOrchard’s first equity investment deal with an Indian microfinance institution (MFI).  With the new investment, Asmitha intends to expand its capital base and to bolster its borrowing capacity in order to shore up its microfinance lending operations.   The new partnership is a strategic development for BlueOrchard, which hopes to consolidate its presence in India in the coming years.

by Jeffrey Erfe -

MICROCAPITAL STORY: Schwab Charitable Fund, Grameen Foundation and Developing World Markets Allocate Over $20m in Microfinance Loan Guarantees From Schwab Charitable Gift Accounts

Schwab Charitable Fund (Schwab), a national donor-advised fund based in San Francisco, has begun allowing donors to its Charitable Gift Accounts to apportion some their donations as microfinance loan guarantees in the hopes that this will magnify Schwab’s charitable impact among low-income entrepreneurs.  Schwab expects the multi-phase program to increase the number of microfinance loans available at lower costs in more than 25 developing countries.  In the near future, the program should provide USD 20 to 30 million in guarantees to over USD 100,000 micro-loans. 

by Iyanna Holmes -

MICROCAPITAL STORY: International Finance Corporation (IFC) Signs Agreement with First MicroFinanceBank Afghanistan (FMFB), Part of Aga Khan Development Network (AKDN), to Strengthen Capacity to Introduce Housing Microfinance

International Finance Corporation (IFC), a member of the World Bank Group, signed an agreement, for an undisclosed amount, with First MicroFinanceBank Afghanistan (FMFB), part of the Aga Khan Agency of Microfinance, a unit of Aga Khan Development Network (AKDN) to strengthen the bank’s capacity to introduce a product line that will address the housing needs of low- and middle-income Afghans.  First MicroFinanceBank Afghanistan, established in 2003, was the first licensed microfinance bank in Afghanistan after the collapse of the Taliban regime.  The company had USD 27.2 million in loans outstanding in 2007.

by Jeffrey Erfe -

MICROCAPITAL STORY: Ernst & Young Donates $1m of In-Kind Resources to Assist Kiva Microfunds with Accounting

Ernst & Young LLP (E&Y), a “Big Four” accounting firm headquartered in London, has donated up to USD 1 million of in-kind resources over the next three years to provide oversight and accountability to the micro-lending process of Kiva Microfunds LLC, a micro-lending website that connects individual lenders with target entrepreneurs via microfinance institutions (MFIs).  The partnership was announced at the 2008 Clinton Global Initiative (CGI) summit, an annual gathering of global leaders in government, business and civil society for the purpose of discussing pressing development challenges and their solutions.

by Jeffrey Erfe -

MICROCAPITAL STORY: Merrill Lynch Community Development Company Invests $10m in Fixed-Income Securities Offered through the Calvert Social Investment Foundation

Merrill Lynch Community Development Company (MLCDC), a for-profit development-focused subsidiary of Merrill Lynch & Company, Inc., has invested USD 10 million in Calvert Community Investment (CCI) notes, which are fixed income products issued by the Calvert Social Investment Foundation, a development non-profit located in Besthesda, MD.  The MLCDC investment will finance about twenty microfinance institutions (MFIs) that are expected to provide micro-credit over 25,000 female entrepreneurs in developing nations.  The initiative was announced at the recent 2008 Clinton Global Initiative (CGI) summit, an annual gathering of global leaders in government, business and civil society for the purpose of discussing pressing development challenges and their solutions.

by Jeffrey Erfe -

MICROCAPITAL STORY: Green Mountain Coffee Roasters Pledges $450k Over Five-Year Period to Non-Profit Social Investment Fund Root Capital

On September 26, Green Mountain Coffee Roasters, Inc. (GMCR), a Vermont-based coffee company, pledged a grant of USD 450,000 over five years to Root Capital, a non-profit social investment fund focused on grassroots businesses in the developing world.  This is the single largest grant in Green Mountain’s history.  The announcement was made at the 2008 summit of the Clinton Global Initiative (CGI), an annual meeting of world leaders aiming to address global development challenges.