Over the past 6 weeks we have been keeping you up to date on the ongoing debate over the IPO of Mexican microfinance institution (MFI), Compartamos. This has included extracts from the Yahoo online ‘microfinance practice group’ discussion (click here to sign up), moderated by Mr. Chuck Waterfield. Below we quote from a comment posted by Mr. Malcolm Harper. Mr. Harper is former chairman of BASIX, an Indian MFI (1996-2006), and is founder and editor-in-chief of the ‘Small Business Development Journal’. He is also currently chairman of Micro-Credit Ratings International Ltd (M-CRIL).
Category: Deals
MICROCAPITAL STORY: CGAP Publishes Focus Note on Compartamos Controversial IPO åö Discussed by Microfinance Practice Group
The biggest news in microfinance last month was the sale of equity of Compartamos, a Mexican microfinance institution (MFI), on stockmarkets in both the US and Mexico (see previous article on microcapital). The move stirred up much debate and drawing on this, the Consultative Group to Assist the Poor (CGAP) has recently published a focus note addressing the issues brought up by this development.
At the time of the deal, and ongoing since then, there has been much discussion over this issue, particularly in the Yahoo online ‘microfinance practice group’ (see previous article on microcapital) which is monitored by Mr. Chuck Waterfield who has more than 20 years of experience in the microfinance industry. Below we quote in full a recent comment posted to the group by Mr. Waterfield regarding the CGAP focus note. Microcapital will also be posting our own paper review of the focus note over the coming days.
NEWS WIRE: Experian and PlaNet Finance to Promote Credit Bureau Projects Where Microfinance is Developed
MICROCAPITAL STORY: Dutch Fund Triodos-Doen Makes a USD 662,175 Loan to Opportunity International – Sinapi Aba Savings and Loans Ltd. of Ghana
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. The Dutch fund Triodos-Doen made a USD 662,175 loan to the microfinance institution (MFI) Sinapi Aba Savings and Loan Ltd, which is under the umbrella organization of Opportunity International. Sinapi Aba reported to MIX market, the microfinance information clearinghouse, at the end of 2006 as having a gross loan portfolio of USD 13.6 million and USD 19.3 million in total assets. Its capital to asset ratio is 32.59% and its debt to equity ratio is 206.81%.
MICROCAPITAL STORY: Microfinance Bank of Azerbaijan Receives $8 Million Loan from Blue Orchard Finance, its Largest Loan Ever
The MicroFinance Bank of Azerbaijan (MFBA) receives a loan from Blue Orchard Finance, a Swiss-based asset management company specializing in microfinance. The 5-year loan is on the order of USD 8 mm, and marks the largest single loan ever made to MFBA by any organization. The funds will be used by MFBA to provide further loans to support the growth of Azeri micro and small businesses (see Press Release on Microcapital.org).
MICROCAPITAL STORY: Dutch Oikocredit Makes 20 Loans to Microfinance Institutions (MFIs) Worldwide Totaling Approximately USD 19.7 Million in One Month’s Time
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. Oikocredit of the Netherlands made twenty seperate loans to microfinance institutions (MFIs) worldwide between March 22, 2007 and April 25, 2007. The most recently disbursed portion of this USD 19.7 mn in funding from the Dutch-based Oikocredit went to the Centro de Apoio aos Pequenos Empreendimentos (CPAE) of Brazil via a USD 308,417 loan on April 25, 2007. The CPAE reported to the MIX market, the microfinance information clearinghouse, at the end of 2005 as having a gross loan portfolio of USD 3.8 mn and USD 4.5 mn in total assets. Its capital to asset ratio during the same time period was 57.74% and its ratio of debt to equity was 73.18%.
MICROCAPITAL STORY: California-Based Dignity Fund Provides a USD 0.5 Million Loan to the Banco de Microfinan̤as de Mozambique (Socremo)
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. The Banco de Microfinan̤as de Mozambique (Socremo) received a USD 500,000 loan from the US-based Dignity Fund. Socremo is an African bank that was established in 1998 “to provide – in a transparent, professional and sustainable way – financial services to low and middle income groups, with special focus on micro and small entrepreneurs.” At the end of 2005, Socremo reported to the MIX Market, the microfinance information clearinghouse, of having a gross loan portfolio USD 5.3 mn and USD 8 mn in total assets. It also reported to having a capital to asset ratio of 36.15% and a debt to equity ratio of 176.66%. The Dignity Fund was established in California in 2005 to provide debt financing “to promising MFIs.” As of March 2007, the Dignity Fund has total fund assets of approximately USD 5.5 mn.
MICROCAPITAL STORY: Dutch Oikocredit Makes a USD 50,500 Equity Investment in CAP Microfinance
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. Oikocredit, based in the Netherlands, made a USD 50,500 equity investment in CAP Microfinance, which does not report to the MIX Market, the microfinance information clearinghouse. This equity investment is not typical of Oikocredit which supports sustainable microfinance institutions (MFIs) mainly through loans, but is not without precedent.
MICROCAPITAL STORY: XacBank of Mongolia Receives Loans Totaling USD 1 Million from Dutch Funds Tridos Doen and USD 0.5 Million from Tridos Fair Share
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. Mongolian XacBank received two loans from the Dutch Funds Tridos Doen and Tridos Fair Share, totaling USD 1.5 mn. According to MIX Market, the microfinance information clearinghouse, XacBank was established in 1998 to provide the following services: loans, voluntary savings, leasing, fund transfers, training and consultation. At the end of 2006, XacBank reported a gross loan portfolio of USD 50.2 mn, USD 76.3 mn in total assets. During the same time period, its capital to asset ratio was 12.22% and a 718.14% ratio of debt to equity. It received an A from the microfinance rating agency, Planet Rating.
MICROCAPITAL STORY: Acquiring Sangli Bank Gives India’s ICICI Bank a Leg Up in Microfinance
With its acquisition of Sangli Bank, a private lender based in Western India, ICICI Bank, the second largest bank in
MICROCAPITAL STORY: Dutch Hivos-Triodos Lends USD 1.56 Million to AMRET of Cambodia and USD 1.32 Million to the Kazakhstan Loan Foundation
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. The Dutch fund Hivos-Triodos made a loan of USD 1.56 mn to the Cambodian microfinance institution (MFI) AMRET, formerly EMT. According to the MIX Market, the microfinance information clearinghouse, it was established in 1991 to provide loans and voluntary savings. As of the end of 2006, it had a gross loan portfolio of USD 17.6 mn and USD 22.8 mn in total assets. Its capital to asset ratio is 25.79% and its debt to equity ratio is 287.81%.
NEWS WIRE: Microfinance Bank of Azerbaijan (MFBA) Receives its Largest Ever Loan
MICROCAPITAL STORY: Micro Finance Bank of Azerbaijan (MFBA) Sells 4.3 million in Shares to EBRD, Black Sea Trade and Development Bank, IFC, KfW, LFS Financial Systems, and AccessHolding
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. The Micro Finance Bank of Azerbaijan (MFBA) sells USD 4.3 mn of its shares to six investors: EBRD, Black Sea Trade and Development, IFC, KfW, LFS Financial Systems, and AccessHolding. The European Bank for Reconstruction and Development (EBRD) invested the equivalent of USD 1.1 mn in MFBA. The EBRD is a multilateral institution that was formed in 1991 to support market economies and democracies from Central Europe to Central Asia. The organization currently works with more than 70 commercial banks and non-banking financial institutions to support microbusiness and microfinance. To date it has lent more than USD 1bn to facilitate more than USD 15 bn of microloans in the region.
MICROCAPITAL STORY: AccessHolding Invests USD 430,414 in Banco de Microfinan̤as de Mozambique (Socremo) Equity
This story comes to us here at MicroCapital.org courtesy of the May 2007 CGAP-MIX Capital Markets Update Newsletter. AccessHolding made a USD 430,414 equity investment in the Mozambique-based Banco do Microfinan Microfinan̤as de Mozambique (Socremo). Socremo is an African bank that was established in 1998 “to provide – in a transparent, professional and sustainable way – financial services to low and middle income groups, with special focus on micro and small entrepreneurs.” At the end of 2005, Socremo reported to the MIX Market, the microfinance information clearinghouse, of having a gross loan portfolio USD 5.3 mn and USD 8 mn in total assets. It also reported to having a capital to asset ratio of 36.15% and a debt to equity ratio of 176.66%.
PRESS RELEASE: IFC Helps Kyrgyz Microfinance Institution Transform into Commercial Bank
MICROCAPITAL STORY: H&R Block Team Up With Grameen America to Provide For-Profit Microcredit Programme in New York
Missouri based H&R Block, America’s largest tax services provider, have announced an agreement with Grameen America, a for profit microfinance institution recently established by the Grameen Trust, part of the Grameen family which began with the Grameen Bank in Bangladesh. Grameen America will draw upon the resources and experience of H&R Block and the Grameen Trust, its majority owner, for fund raising, product and service development, and evaluation of the pilot programme which will be run in New York.
MICROCAPITAL STORY: The Ondo State of Nigeria Disburses N2.326 billion (USD 18 million) in Microfinance Loans
As part of the government’s 4-year plan on poverty alleviation, the Ondo state government has been making large strides in increasing accessibility to micro-credit loans to its people. According the government, these loans have reached 27,208 people over the course of the program’s implementation.