This conference on financial services innovation will cover topics such as the digitization of credit unions and community banks, payments innovation for small businesses, small business lending innovation, blockchain in financial services, financial health and inclusion, and policy and regulation.
Category: Risks
MICROCAPITAL BRIEF: Government of Ghana Restores Losses to Customers of Failed Microfinance Institutions (MFIs), but $150m of Savings Remain “in Jeopardy” in Advance of Deposit-insurance Rollout
After the collapse of approximately 100 licensed microbanks in Ghana over four years, the country’s central bank, the Bank of Ghana, has announced it will refund deposits of up to GHS 10,000 (USD 2,000) per retail
MICROFINANCE PAPER WRAP UP: “Cyber Security in Emerging Financial Markets,” Published by CGAP
This is a summary of a paper by Hildah Nduati, published by CGAP (Consultative Group to Assist the Poor), May 2018, 8 pages, available at https://www.findevgateway.org/sites/default/files/publication_files/cybersecurity_in_emerging_markets_06-30.pdf
The availability of digital financial services (DFS) has altered the way many payments are collected and processed in developing countries. Ms Nduati argues that, although DFS have helped millions of people stabilize their income and break out of their stagnant socioeconomic positions, there remain many issues outstanding
MICROFINANCE PAPER WRAP UP: “A New Kind of Conglomerate: Bigtech in China,” published by Institute of International Finance
This is a summary of a paper published by the Institute of International Finance, November 2018, 33 pages, available at https://www.iif.com/portals/0/Files/private/chinese_digital_nov_1.pdf
This paper focuses on the five largest technology firms in China – Alibaba, Tencent, Baidu, Ping An and JD.com – and their reach into both the daily life and broader economy of China. The number of internet users in China
MICROFINANCE PAPER WRAP UP: “The Bali Fintech Agenda: A Blueprint for Successfully Harnessing Fintech’s Opportunities;” published by International Monetary Fund (IMF), World Bank Group
This is a summary of a paper published by the International Monetary Fund (IMF) and the World Bank Group; October 2018; 43 pages; available at:
http://www.findevgateway.org/sites/default/files/publication_files/pp101118-bali-fintech-agenda_1.pdf
The authors of this paper, whose title refers to its release at a conference in Bali, Indonesia, argue that financial technology (fintech) offers emerging markets both opportunities and risks, including risks to “financial
SPECIAL REPORT: Despite a “Solid” Willingness to Invest in Microinsurance, a “Terrifying” Lack of Coverage
On 
the last day of European Microfinance Week, Katharine Pulvermacher of the Luxembourg-based Microinsurance Network led a discussion on insuring people with daily incomes of USD 2 to USD 20. Those with lower incomes, she argued, will have to be covered by government safety nets.
Anup Singh of India-based consultancy MicroSave described the path to success in microinsurance as
SPECIAL REPORT: RUFI Crosses Border with Refugees from South Sudan, Opens Doors in Uganda; Breaking MFIs’ Stereotypes About Victims of Conflict – Insights from European Microfinance Week
Friday at European Microfinance Week, Resi Janssen of Dutch NGO Cordaid described her institution’s Rural Finance Initiative (RUFI), which had been working in South Sudan when violence in 2016 caused most of its clients to flee to Uganda. With no license to accept deposits in Uganda, RUFI became an agent of Centenary Bank so it could continue to provide savings and other services to its customers – albeit in a different country – at a time of great need.
Not long after relocating, some of RUFI’s customers started asking how they could keep their children from being recruited as fighters. RUFI secured
SPECIAL REPORT: Randomized Controlled Trial Shows Significant Impact from Financial Education in Uganda
On the first day of conference sessions at European Microfinance Week (EMW), Esther Nanjovu of German development agency GIZ demonstrated a portion of a two-hour financial training program that has been shown to benefit attendees in several ways. The program is participatory, with stations addressing personal financial management, savings, investment, debt management and the usage of financial services providers. The personal financial management component is taught using a display board on which learners can place and move cards representing various expenses and income sources. As a team, approximately 25 learners work together to create a prioritized list of expenses to help them appreciate the significance of their choices. In some cases, they even argue over whether certain cards – such as sports betting – are expenses or
SPECIAL REPORT: Matching Rules of Thumb with Clients in Eastern Europe and Central Asia: Financial Education at EMW
Today at European Microfinance Week (EMW), Ewa Bankowska of the Microfinance Centre (MFC), a Poland-based network of approximately 100 microfinance institutions (MFIs), described her organization’s response to lackluster results from the financial education it has delivered to 200,000 people in 22 countries over 15 years.
Evidence suggests that changes in financial behavior are more likely when learners are given simple “rules of thumb,” such as putting a euro in a jar after every shopping trip. Based on this idea, MFC is developing a system to determine which rules of thumb should be suggested to which clients. The organization has drafted an online tool with 13 questions that categorize users into one of four categories. Based on the person’s category, she is given a
SPECIAL REPORT: Measuring the Impact of Energy Access, Bringing Climate Data into Agricultural Lending Methodologies with the Yapu App at European Microfinance Week
During the first day of European Microfinance Week, Natalia Realpe Carrillo of Germany-based social network platform Hedera and Giulia Corso of Germany-based MicroEnergy International discussed the World Bank’s Multi-Tier Framework for Measuring Energy Access and the Progress out of Energy Poverty Index. Key factors include whether energy sources are adequate, reliable, legal and safe. To address impact, it is important to consider factors such as families’ energy spending, income generation and reduction of carbon dioxide emissions. These frameworks also align with the work of the Netherlands-based Global Off-Grid Lighting Association.
Davide Forcella of the Centre for European Research in Microfinance (CERMi) walked attendees through a simulation using the Yapu app to make lending decisions for a smallholder farmer with and without crop and climate data. For example, the agricultural data included
SPECIAL REPORT: Green Inclusive and Climate Smart Finance Action Group Convenes on First Day of European Microfinance Week Regarding Its Green Index, Study Tour, Impact Measurement
The 60-member Green Inclusive and Climate Smart Finance Action Group, one of the European Microfinance Platform’s (e-MFP’s) five Action Groups, met today to drive forward agenda items such as the increased adoption of the Green Index. The Green Index is a tool for assessing the performance of microfinance institutions (MFIs) in four areas: policy and strategy; internal risk; external risk; and green loan products offered. Green loans can fund a range of purchases, from solar panels to waste management systems.
The coordinators of the Action Group also solicited ideas on new projects to take on during the next two years. Andre Harriman, CEO of the Zimbabwean arm of the UK-based Microloan Foundation, said that the rural women his institution serves are very interested in solar and other green products. However, he is wary of
SPECIAL REPORT: Verdant Capital: Hybrid Capital Solutions to Support the Next Phase of Inclusive Growth
This sponsored content was written by Edmund Higenbottam, Managing Director of Verdant Capital, and Raj Domun, Director and Fund Manager of the Verdant Capital Hybrid Fund. Verdant Capital is a leading specialist financial advisory firm that operates on a pan-African basis.
In recent years, the Inclusive Financial Institution sector has grown significantly in Africa and elsewhere, driven in part by growth in the global specialist investor base supporting the sector, and in part due to the growth of local debt markets. In Africa, this growth has stretched the equity capital bases of many institutions – and of the sector as a whole – due to the
SPECIAL REPORT: A Model from Cambodia for Preventing Overheating – Not Just Multiple Lending; to be Presented at European Microfinance Week; November 14-16, 2018
Since 2016, the 95-member Cambodia Microfinance Association (CMA), Incofin, MIMOSA, the Credit Bureau of Cambodia, and several other stakeholders have been developing the CMA Lending Guidelines, under which microfinance institutions (MFIs) are working together to prevent over-indebtedness in Cambodia. The project is funded by Incofin, PROPARCO, BIO, FMO and ADA.
MicroCapital: How long have you been concerned about possible overheating in the Cambodian microfinance market?
Kea Borann: Concerns of the market overheating started at least as early as 2015. Since then, the total outstanding portfolio of the industry has been growing at an average of 25 percent per year, even as the number of loans has remained unchanged at 2.3 million. This seems to mean that the same clients are taking on more debt when their loans are renewed. The average loan size grew from USD 1,691 to
SPECIAL REPORT: Responsible Investment Requires Responsible Exits – Applying a Fitness and Compatibility Review Matrix to Choose an Equity Buyer for AMK Cambodia
In 2012, Incofin’s Rural Impulse Fund II (RIF II) bought a 25-percent stake in AMK, a microfinance institution in Cambodia. Six years later, RIF II exited AMK, selling its stake to Shanghai Commercial and Savings Bank (SCSB). Dina Pons, Incofin’s regional director for East Asia, shares some insights on the exit 
process.
IN PHOTO: The last and first meeting of AMK’s board of directors: entering and exiting members ensuring a smooth transition.
MicroCapital: Please tell us a bit about AMK’s social performance and Incofin’s contribution to it.
Dina Pons: Founded in 2003, AMK is one of the largest and most recognised finance institutions operating in rural Cambodia. It serves around 700,000 clients nationwide with a unique set of financial services, including credit, savings, money transfers and insurance. AMK’s strong customer centricity and deep focus on rural clients were among the key attractions for us to invest in the company. Since its inception, AMK’s mission has been “to help large numbers of poor people improve their livelihood options through the delivery of appropriate and viable microfinance services.” Far from being just a theoretical motto, AMK’s social mission is what drives the institution and its staff to perform. For instance, a board-level social performance committee, which I was privileged to chair for three years, was tasked with checking each year whether
MICROCAPITAL BRIEF: Accion’s CFI Seeks Hosts for Events During Financial Inclusion Week, October 29 – November 2, 2018
The Center for Financial Inclusion (CFI), which is part of US-based NGO Accion, is seeking organizations to participate in its fourth annual Financial Inclusion Week (FIW), which will be held during the week of October 29. CFI will provide participating organizations with background material and
MICROCAPITAL BRIEF: Shanghai Commercial and Savings Bank (SCSB) Buys 80% of AMK of Cambodia from Agora Microfinance, Incofin’s Rural Impulse Fund II, Norfund’s Cambodia-Laos Development Fund, Proparco
Incofin Investment Management, a Belgium-based impact investor, recently announced that its Rural Impulse Fund (RIF) II is among several entities selling a total of 80.01 percent of the shares of Cambodian microfinance institution Angkor Mikroheranhvatho Kampuchea (AMK) to Taiwan-based Shanghai Commercial and Savings Bank (SCSB). The other sellers are Agora Microfinance NV, a Dutch holding company; the Cambodia-Laos Development Fund of the Norwegian government’s Norfund; and the French government’s Societe de Promotion et de Participation pour La Coopération Economique (Proparco). While the sizes of the former shareholdings have not been released, each of the investors is exiting AMK completely, except for Agora Microfinance NV. AMK Staff Association,
MICROCAPITAL BRIEF: Georgia Cracking Down on Consumer “Microfinance,” Capping Interest Rates at 50%
Georgian Prime Minister Mamuka Bakhtadze reportedly stated recently that 630,000 of the 3.7 million people in Georgia have debt they cannot repay. Questionable loans have been disbursed by banks, online lenders and others using the term “microfinance” to describe their services.
One woman earning GEL 150 (USD 58) per month reportedly was able to borrow GEL 5,000 (USD 1,900) from a bank for a
SPECIAL REPORT: Registration Opens for European Microfinance Week; November 14 – November 16, 2018; Luxembourg
Event Summary: On November 14, the European Microfinance Platform’s (e-MFP’s) ten Action Groups will meet in person to work on their respective topics of focus, such as rural outreach and innovation, investors, and green-inclusive and climate-smart finance.
On November 15 and 16, more than 80 organisations will be represented in over 25 sessions addressing topics including the following: making insurance markets work for the poor, the business case for gender-lens investing, crowdfunding, financial services for refugees, financing clean energy, meeting the financial needs of smallholder farmers, financial education, youth finance, microfinance and the UN’s Sustainable Development Goals, social performance management, financial inclusion through technology, regulation realting to digital financial services (DFS), and client protection relating to DFS.
Also on November 15, we will learn what organization wins this year’s EUR 100,000 (USD 115,000) European Microfinance Award, which will be for