The National Bank of Ethiopia (NBE), the country’s central bank, recently announced it has passed directives allowing the following: (1) microfinance institutions to transform into banks; and
Category: Regulation
MEDIA OF THE MONTH: “Post COVID-19: Will Physical Cash Exist in 10 years?”, London Institute of Banking and Finance
We are pleased to suggest this fun conversation between Dean Maria Carapeto and Visiting Scholar Jonathan Holman of the London Institute of Banking & Finance on the topic of “financial inclusion, developing economies, digital and more”!
This post is part of a monthly series from MicroCapital pointing you to great media on microfinance and other forms of impact investing. Enjoy!
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-page/.
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
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: BCEAO Revising Microfinance Regulation to Promote “Responsible” Digital Financial Inclusion in West Africa; Supported by FAPSFD, UNCDF
The Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), the central bank of the eight countries of the Union Economique et Monétaire Ouest Africaine (UEMOA), is finalizing an updated set of regulations on microfinance with support from institutions including the UN Capital Development Fund (UNCDF) and the Fédération des Associations Professionelles des Systèms Financiers Décentralizés (FAPSFD), which represents groups of microfinance practitioners in each country of UEMOA. FAPSFD President Azartou Sondo Nignan explains that
MICROFINANCE PAPER WRAP-UP: “A Market Systems Approach to Savings Groups,” by Joanna Ledgerwood, published by The SEEP Network
In this paper, Ms. Ledgerwood advocates for a “market systems approach” to help savings groups (SGs) – self-managed associations of about 20 individuals who work together to save and borrow – thrive and replicate to satisfy more of the unmet demand for financial services. While SGs have grown exponentially in the past 25 years, Switzerland-based CARE International estimates that
MICROCAPITAL BRIEF: Amid Pandemic, Fintechs Pause Some Projects, But Innovate to Care for Customers, Staff
MIX, an NGO based in the US city of Washington, recently surveyed 25 financial technology (fintech) providers and investors regarding their responses to the COVID-19 pandemic. Over the past two months, investment in fintech providers has fallen, as has their revenue, due to lower remittance and lending volumes. The fees that fintechs charge are also down, sometimes at fintechs’ choosing, but sometimes by government decree. Clients have more incentive to use mobile money due to travel restrictions, branch and agent closures, and the potential transmission of germs via cash. However, they have less money to transact. One study found that four in five business owners in Kenya did not
MICROCAPITAL BRIEF: World Bank to Loan $300m to Indonesia for Financial Sector Reform, Including Promoting Long-term Savings, Disaster Microinsurance
The World Bank recently agreed to loan USD 300 million to the government of Indonesia for “financial sector reforms that will help sustain economic growth and achieve the country’s shared prosperity goals.” Planned strategies include increasing the range of
SPECIAL REPORT: Highlights of European Microfinance Week 2019
From 
the European Microfinance Platform (e-MFP): European Microfinance Week 2019 gathered 450 leading experts from 62 countries to showcase the most exciting innovations advancing sustainable and responsible financial
MICROFINANCE EVENT: MEDA Innovate Learning Event; March 17, 2020; Ottawa, Canada – CANCELED
THIS EVENT HAS BEEN CANCELED.
Presenters at this event will share testimony on “designing, testing, and scaling non-traditional finance solutions and agricultural technologies for smallholder farmers.” Other topics will include
MICROCAPITAL BRIEF: Nvio Pagos México Awarded 1st Fintech License from Comisión Nacional Bancaria y de Valores
The Comisión Nacional Bancaria y de Valores (CNBV), Mexico’s banking and securities commission, recently licensed Nvio Pagos México to operate as a fintech firm. While 85 firms have applied for such licenses, this is the first to have been awarded under the Mexican government’s Financial Technology (Fintech) Institution Law,
MEDIA OF THE MONTH: Video Summary of SAM 2019, also Known as African Microfinance Week, in Burkina Faso
This five-minute video gives you a taste of what happened when 900 participants from 50 countries met for the 2019 SAM conference in Ouagadougou.
This post is part of a monthly series from MicroCapital pointing you to great media on microfinance and other forms of impact investing. Enjoy!
MicroCapital coverage of the last three SAM conferences, including vignettes demonstrating its value to participants, appears at http://www.microcapital.org/category/semaine-africaine-de-la-microfinance-sam/.
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-page/.
MICROCAPITAL BRIEF: Bangladesh Capping Interest Rates at 9%, Observers Warn Microfinance Lending Would Become “Unviable Overnight”
As of April 1, all lending in Bangladesh is to occur at a cost of no more than 9 percent per year. The only exception is for loans via credit card. In advance of the deadline, the average lending rate for cottage, micro- and small enterprises (CMSEs) reportedly stands at 16 percent. Economist Zahid Hussain argued, “The 9 per cent interest rate cap will
MICROCAPITAL BRIEF: Central Bank of Sudan Issues Monetary Policy Promoting Financial Inclusion, Competition Among Financial Institutions; Sets $30k MSE Loan Ceiling
Governor 
Badr Ibrahim (pictured) of the Central Bank of Sudan (CBOS) recently announced a new monetary policy intended to reduce inflation, stabilize exchange rates, finance goods produced for export, strengthen financial safety nets, boost financial inclusion and increase competition among financial services providers.
Elkhidir Elamin Mohammed, the managing director of Al-Fal MSE Finance, tells MicroCapital that, “This announcement is motivating financial institutions to innovate and link their investment activities with
MICROCAPITAL BRIEF: 15 Mobile Money Firms Acquire Licenses from Central Bank of Nigeria
The governor of the Central Bank of Nigeria, Godwin Emefiele, reportedly has announced that, “We have so far provided 15 licenses to several mobile money operators who are working to increase access to finance using digital channels.” This is part of an effort to open 500,000
MICROCAPITAL BRIEF: Tightened Regulation in Zimbabwe Makes Directors, Officers, Shareholders Personally Liable to Microfinance Institution Depositors in Case of Negligence
A new law in Zimbabwe tightens the requirements for microfinance institutions (MFIs) in the country. Each of Zimbabwe’s 205 MFIs will have to pay a yearly fee to maintain its registration with the government. The law also provides for the creation of a Microfinance Advisory Council (MAC), which will report to Minister of Finance and Economic Development on strategic and governance issues. The council membership will include government officials as well as representatives of the banking industry, the microfinance industry and “a reputable
MICROFINANCE PAPER WRAP-UP: “Handbook on Consumer Protection for Inclusive Finance,” published by Center for Financial Inclusion, New Perimeter
“Handbook on Consumer Protection for Inclusive Finance,” by the Center for Financial Inclusion (CFI) at Accion and New Perimeter, October 2019, 91 pages, available at https://www.centerforfinancialinclusion.org/handbook-on-consumer-protection-for-inclusive-finance
This handbook highlights the importance of having a robust legal and regulatory framework in place to ensure the protection of low-income consumers of financial services via new delivery channels. It is intended to supplement the seven Consumer Protection Principles developed by CFI’s Smart Campaign by highlighting legal
SPECIAL REPORT: SheInvest to Deliver $1.1b to Women in Africa, Access Bank’s “Beta Friends” Bringing Digital Savings to Market Sellers, Women Move Slowly to Mobile Money: All at European Microfinance Week
At Friday’s session on gender and financial inclusion during European Microfinance Week, Enrico Pini of the European Investment Bank (EIB) argued that, “It’s smart business,” to boost opportunities for women. Such is the motivation for EIB’s SheInvest program, which is scheduled to mobilize EUR 1 billion (USD 1.1 billion) to invest in entrepreneurship, financial inclusion, digital inclusion and climate-resilience efforts for African women.
Njideka Nwabueze of Nigeria’s Access Bank described her company’s product, “Beta,” which translates as “Good” in the local language. She said that many poor women use informal savings schemes because they do not believe that banks offer products that meet their needs. One of these women’s priorities is easy access to funds. Women who sell products in a market, for example, risk losing a good selling spot if they leave during the day to visit a bank. Also, bank lines can be very long.
This is why, six years ago, Access launched Beta, an interest-bearing savings account that leverages mobile money but is