Intellecap, a social-sector advisory firm with offices in India and the US, has released a white paper analyzing the events leading up to the ongoing microfinance lending crisis in Andhra Pradesh, a state on the southeastern coast of India.
Category: Trends/Challenges
MICROCAPITAL BRIEF: Muthoot Fincorp, ACCION International Join to Increase Microfinance Lending in India
Muthoot Fincorp, a finance company serving retail and institutional customers in India, and ACCION International, a US-based nonprofit with affiliated microfinance institutions (MFIs) in 23 countries, have joined together in an effort to increase lending in India’s microfinance sector.
MICROCAPITAL BRIEF: The World Council of Credit Unions (WOCCU) and Federacion Nacional de Cooperativas de Ahorro y Credito (FENACOAC) of Guatemala Partner to Launch Savings Guarantee Fund
The World Council of Credit Unions (WOCCU), a US-based global trade association for credit unions, and the Federacion Nacional de Cooperativas de Ahorro y Credito (FENACOAC), an association of credit unions and cooperatives in Guatemala, have partnered to launch Mi Cooperativa (MICOOPE) Savings Guarantee Fund, a private deposit insurance institution aiming to serve FENACOAC holders of savings and share accounts in Guatemala.
MICROCAPITAL BRIEF: Cooperative Insurance Company (CIC) of Kenya Launches M-Bima, Mobile-to-Mobile Premium Payment Program
Cooperative Insurance Company of Kenya Limited (CIC), an insurance company in Kenya, has announced the launch of M-Bima, a mobile-to-mobile premium payment program. CIC has partnered with telecommunications company Safaricom and its M-Pesa program, a mobile-to-mobile money management service, and reportedly plans to partner with other money transfer platforms such as u-Cash, and Airtel’s Zap/Airtel Money.
MICROCAPITAL BRIEF: Investment Company responsAbility Releases “Microfinance Market Outlook 2011”
responsAbility Social Investments AG, an investment company in Switzerland, recently released “Microfinance Market Outlook 2011,” a report based on surveys of representatives of microfinance institutions (MFIs), investors, rating agencies and consultancies.
MICROCAPITAL BRIEF: The International Finance Corporation (IFC) Publishes “Doing Business 2011: Making A Difference for Entrepreneurs,” Analysis of Business Regulation Worldwide
The International Finance Corporation, a World Bank Group member created to support private sector development, recently released the annual report “Doing Business 2011: Making A Difference for Entrepreneurs,” which examines the impact of regulations that affect business activity.
MICROCAPITAL BRIEF: Pakistan, Cambodia and Philippines Top Economic Intelligence Unit (EIU) Ranking of Microfinance Regulatory Frameworks
A study conducted by the Economic Intelligence Unit (EIU), the business information arm of The Economist Group, the producer of The Economist weekly magazine, has ranked Pakistan, Cambodia and the Philippines first in the world in terms of regulatory framework. The study was based on data from 54 countries, measuring their regulatory frameworks, investment climate and institutional development.
MICROCAPITAL BRIEF: Dr Muhammed Yunus, Winner of Nobel Prize for Work in Microfinance, Accused of Improperly Transferring $100m from Grameen Bank to Insurer Grameen Kalyan
Bdnews24.com, a web-based Bangladeshi newspaper, reports that Muhammed Yunus, the founder of microfinance institution (MFI) Grameen Bank of Bangladesh and a 2006 Nobel Prize winner for championing microcredit, has been accused of secretly transferring approximately USD 100 million in 1996 to Grameen Kalyan, a sister company of Grameen Bank that offers affordable health insurance to Grameen members and their families but does not engage in microlending.
MICROFINANCE PAPER WRAP-UP: Savings Groups: What Are They? By Hugh Allen and David Panetta, Published by The SEEP Network
By Hugh Allen and David Panetta, Published by The SEEP Network, June 2010, 64 pages, available at: http://seepnetwork.org/PDFfiles/Savings_FINAL_web.pdf
Even as microlenders become a popular channel through which to reach the poor, many of those in rural areas and urban slums remain without access to formal financial services.
MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) in India’s West Bengal Face Cash Shortage as Pain Spreads Outside Andhra Pradesh
Microfinance Institutions (MFIs) in the Indian state of West Bengal are facing a shortage of lendable funds, as the banks from which they borrow reduce their exposure to the microfinance sector.
MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Assesses Potential Impact of Recent Microfinance Regulation in India’s Andhra Pradesh State
Microfinance Information Exchange (MIX), a nonprofit that seeks to offer objective data and analysis on microfinance players, recently examined historical data from 2003 to the present from 100 MFIs in India to assess the hypothetical impact of capping interest rates at 24 percent and return on assets (ROA) at 3 percent, two limits effectively imposed by the state government on MFIs amidst the ongoing crisis in the microfinance industry in India’s Andhra Pradesh state.
MICROCAPITAL BRIEF: Standard Chartered Bank Tanzania Arranges, USAID Guarantees Local-Currency Bond for Tanzanian Microfinance Institution (MFI) Promotion for Rural Initiatives and Enterprise Limited (PRIDE Tanzania)
Standard Chartered Bank Tanzania, a division of the London-based international bank Standard Chartered PLC, recently arranged a bond issue for Tanzanian microfinance institution (MFI) Promotion for Rural Initiatives and Enterprise Limited (PRIDE Tanzania), which is reportedly the first MFI bond ever issued on the Tanzania Stock Exchange.
MICROCAPITAL BRIEF: University Commission for Development (CUD) Announces Scholarships for 2011 Academic Year, Including European Masters in Microfinance
The University Commission for Development (sometimes referred to by the French acronym CUD), a group of nine French-speaking universities in Belgium established by the Interuniversity Council of the Francophone Community (sometimes referred to by the French acronym CIUF), has announced the availability of scholarships for the 2011 academic year for training courses and academic programs that include a European Masters in Microfinance. Only applicants originating in developing countries may apply for the funding.
MICROCAPITAL BRIEF: Evaluation Cooperation Group (ECG) Finds Microfinance Operations of Major Multilateral Development Banks (MDBs) Have Difficulty in Reaching Very Poor People
The Evaluation Cooperation Group (ECG), a network of evaluators of multilateral development banks (MDBs), has published a report that finds that the microfinance operations of MDBs have difficulty in reaching very poor borrowers.
MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Grants Transparency Certificates to Microfinance Investment Vehicles (MIVs) That Adhere to Environmental, Social and Governance (ESG) Standards
CGAP (Consultative Group to Assist the Poor), a policy and research center dedicated to enhancing financial access for the world’s poor, has announced its granting of Transparency Certificates to several microfinance investment vehicles (MIVs) that are in compliance with its environmental, social and governance (ESG) guidelines for MIVs.
MICROCAPITAL BRIEF: SHARE Microfin Limited Officially Delaying Initial Public Offering (IPO) Due to Rising Loan Defaults
SHARE Microfin Limited, a regulated non-banking financial company (NBFC) in India, officially delayed its planned initial public offering (IPO) of INR 10 billion (USD 218 million), originally scheduled for early 2011, due to rising default rates and tightening government regulations in India’s troubled Andhra Pradesh state. A delay had been rumored since October amidst rising uncertainty in the microfinance industry. SHARE Microfin has USD 577 million in assets, a gross loan portfolio of USD 490 million, 990 branches, 2.3 million active borrowers, return on assets (ROA) of 5.5 percent and return on equity (ROE) of 45.18 percent.
MICROCAPITAL PAPER WRAP-UP: Microfinance and Gender: Is There a Glass Ceiling in Loan Size? By Isabelle Agier and Ariane Szafarz, published by Pontifical Catholic University of Rio de Janeiro and Universite Libre de Bruxelles
By Isabelle Agier and Ariane Szafarz, published by Pontifical Catholic University of Rio de Janeiro and Universite Libre de Bruxelles, March 2010, 37 pages, available at: http://ssrn.com/abstract=1573872
MICROCAPITAL BRIEF: State-Owned Union Bank to Offer Microcredit in Indian State of Andhra Pradesh
The Union Bank of India (UBI), a state-owned bank based in Mumbai, has launched a new microfinance scheme to support self-help groups (SHGs), village-based financial intermediaries comprised of groups of 10 to 20 women, in Andhra Pradesh.