Mr Vijay Mahajan, Chairman of BASIX and a Board Member of CGAP (Consultative Group to Assist the Poor), and Mr P N Vasudevan, Managing Director of Equitas Micro Finance, recently published an article entitled, ‘Microfinance in India: Twin Steps towards Self-Regulation.’
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MICROCAPITAL BRIEF: ICICI Prudential Asset Management Invests $900k in $10m Securitized Offering by Chennai-based Equitas Microfinance
ICICI Prudential Asset Management, an Indian fund manager, has invested in a securitized offering by Equitas Microfinance, an Indian microcredit lending firm based in Chennai, India.
MICROFINANCE PAPER WRAP UP – CGAP Due Diligence Guidelines For The Review Of Microcredit Loan Portfolios, by Robert Peck Christen and Mark Flaming
Written by Robert Peck Christen and Mark Flaming of CGAP (Consultative Group to Assist the Poor), published by the World Bank Group in December 2009, 58 pages, available at: http://www.cgap.org/gm/document-1.9.36521/DueDiligence_TechGuide_ENG.pdf
The purpose of this paper is to provide a method of acquiring an understanding of the underlying quality of the loan portfolio of an microfinance institution (MFI) for banking regulators, donor agencies, and potential investors.
MICROCAPITAL BRIEF: CRISIL Credit Rating Agency Upgrades Long-Term Loan Rating of Asmitha Microfin Limited, a Microfinance Institution (MFI) in India, to “BBB With a Stable Outlook”
CRISIL, a credit rating agency based in India, has upgraded the long-term loan rating of Asmitha Microfin Limited, a microfinance institution (MFI) based in India [1,2,3].
KNOW A MICROFINANCE FUND: PlaNet MicroFund, OXUS Holding, NAMFEX, Minlam Microfinance Fund
The following microfinance funds are outlined in this brief:
MICROCAPITAL BRIEF: CGAP Releases Updated “Due Diligence Guidelines for the Review of Microcredit Loan Portfolios” by Robert Peck Christen and Mark Flaming
The World Bank’s CGAP (Consultative Group to Assist the Poor) has released an updated version of its “Due Diligence Guidelines for the Review of Microcredit Loan Portfolios: A Tiered Approach,” which offers techniques to assess the extent to which microfinance institutions (MFIs) are likely to collect on their loan assets.
MICROCAPITAL BRIEF: Grupo Fortaleza Places $17.9m Closed-End Fund on Bolivian Stock Exchange to Finance Small Microfinance Institutions (MFIs)
Grupo Fortaleza, a Bolivian financial services company that caters to small and medium enterprises (SMEs), has placed a BOB 125 million (USD 17.9 million) closed-end fund on the Bolivian stock exchange (Bolsa Boliviana de Valores) with the purpose of financing small microfinance institutions (MFIs).
KNOW A MICROFINANCE FUND: BlueOrchard Loans for Development 2007-1 (BOLD 2007-1)
Overview:
BlueOrchard Loans for Development 2007-1 (BOLD 2007-1) is a Collateralized Debt Obligation (CDO) that is collateralized with debt from microfinance institutions (MFIs).
MICROCAPITAL.ORG BRIEF: IFMR Capital and Equitas Micro-Loan Securitization Allows for Mutual Fund Investment in Indian Microfinance Sector
The micro-loan securitization with pass-through certificates (PTCs or securities), completed by the Institute for Financial Management and Research (IFMR) Capital and Equitas Micro Finance India Pvt Ltd, has created an opportunity for mutual funds to invest in the Indian microfinance sector. IFMR Capital is a non-banking finance company based in Chennai, India, and Equitas is a microfinance institution (MFI) also based in Chennai.
MICROCAPITAL.ORG BRIEF: Muang Thai Life Assurance Taps Into Rural Market of Microinsurance
Muang Thai Life Assurance (MTLA), which is among the top five insurance companies in Thailand, is planning to expand access to its microinsurance program in rural areas of Thailand. The program has already been running for four years. Annual premiums range from 1,200 to 10,000 baht (USD 36 to USD 301) for coverage of 50,000 to 150,000 baht (USD 1,506 to 4519). Premiums are calculated based on factors such as the types of crops grown, the number of harvests per year, and the size of a client’s potential income. According to Mr. Sara Lamsam, president of MTLA, “at this preliminary stage, we have yet to expect [the program] to boost sales, but in the future our brand would definitely be in the forefront of their minds once the communities are financially strong enough and have a better understanding of the importance of savings.” As part of its microinsurance program, MTLA also educates people on money management and savings.
MICROCAPITAL.ORG BRIEF: Access Bank Plc. and State of Anambra, Nigeria Launch $16.5m Microfinance Scheme
Access Bank Plc, a Nigerian commercial bank, has agreed to work with the Anambra state government to launch the state’s first microfinance scheme, by providing an equivalent of USD 16.5 million to selected microfinance institutions (MFIs) within the month. State Governor Peter Obi plans to set up workshops at the local government level throughout the state, in order to monitor progress and train operatives on “effective operation of the scheme.” He has also organized a committee, consisting of himself, representatives of the Access Bank, the Central Bank of Nigeria, microfinance bank operators, and others, who will oversee the program. The criteria for taking out a loan are not based on assets or collateral, but on “proven good character of the borrower.” The MFIs receiving funds are restricting the maximum amount that can be loaned to an individual to be equivalent to USD 3,294.
MICROCAPITAL.ORG BRIEF: Chinese Association of Microfinance (CAM) Calls for Microfinance Reform in Country
During the China Microfinance Summit Forum 2009, Secretary General of the China Association of Microfinance (CAM) Bai Chengyu, stated that microfinance institutions (MFIs) must refine their systems of assessing social impact by enforcing better regulations and decision-making processes. Mr. Bai argued that in order for domestic MFIs to truly cater to poverty alleviation, they should not require borrowers to provide collateral in exchange for loans. He cited data from the People’s Bank of China (PBC), which details that 87.1 percent of total loans issued by the end of 2008 were collateral loans, whereas 12.9 percent of total loans were non-collateral loans.
MICROCAPITAL.ORG STORY: Members of Azerbaijan Microfinance Association (AMFA) Reach Microloan Portfolio of USD 393 Million
According to an article from the online publication, Azerbaijan Business Center, microfinance institutions (MFIs) that are members of the Azerbaijan Microfinance Association have reached a combined microloan portfolio of USD 393 million as of October 1, 2009 [1,2]. Additionally, the number of active borrowers has exceeded 274,600 [1].
WHO’S WHO IN MICROFINANCE: The Microfinance Gateway (www.microfinancegateway.org), Provided by World Bank’s Consultative Group to Assist the Poor (CGAP)
Launched in 2000, the Microfinance Gateway is self-proclaimed as “the most comprehensive online resource for the global microfinance community,” getting over four million page hits from 200 countries in 2008. The website is provided by the microfinance arm of the World Bank, the Consultative Group to Assist the Poor (CGAP), in an effort to advance knowledge and encourage innovation within the microfinance industry [1]. In May of this year, the site was re-launched, with interactive features such as ratings, reviews and comment boards. Also among the additions are “Hot Topic” pages with relevant links and overviews for microfinance-related investment, rural and agricultural finance, social performance, microinsurance, savings, technology and more. In an effort to further improve the site, CGAP has released the Microfinance Gateway User Survey 2009, which asks users to rate and comment on new features including accessibility, breadth and depth of information, job postings and the “attractiveness” of the new user interface [2].
MICROCAPITAL.ORG STORY: IFC to Raise $300m in Bond Issue in Japan Market for Microfinance Programs
The International Finance Corp (IFC) will aim to raise USD 300 million through a bond issue targeted at Japanese investors to finance microfinance programs. This is the first time that the IFC will issue bonds with the intent to lend to microfinance institutions (MFIs). The bond listing and sale will be arranged by Daiwa Securities. The bond will be listed in Australian dollars and New Zealand dollars and will be restricted to Japanese retail and institutional investors. IFC has obtained ratings of Aaa/AAA (investment grade) from Moody’s and Standard & Poor’s rating services respectively. It is expected that IFC will invest an amount at least equal to the bond proceeds in supporting microfinance activities. See bibliography sections [7]-[15] for Microcapital.org’s coverage of recent IFC investments. According to Nina Shapiro, IFC treasurer and vice president for finance, the IFC is considering bond issuances in other regions as well, specifically the European bond markets. IFC estimates that financing needed in the microfinance sector will reach USD 1.8 billion in 2010. [3][4]
MEET THE BOSS: Interview with Richard Weingarten, Managing Director of the Norwegian Microfinance Initiative (NMI)
The Norwegian Microfinance Initiative (NMI) is a partnership between the Norwegian public and private sectors that will invest in microfinance institutions (MFIs) in developing countries. NMI will also provide professional assistance and technical support for these institutions. NMI will invest through two investment funds: the NMI Global Fund, which invests primarily in microfinance investment vehicles (MIVs) focused on investments in Africa, Asia and Latin America, and the NMI Frontier Fund, which invests primarily in emerging MFIs in Sub-Saharan Africa and South Asia. Investors have committed NOK 600 million (approximately USD 100 million) to the two funds. Professional and technical assistance will be provided through the NMI Professional Assistance Facility, funded by Norad, Norway’s international development agency. Investors and strategic partners of NMI include Norfund (a development finance institution owned by the government of Norway) and four private sector financial services institutions: Ferd, KLP, DnBNOR, and Storebrand.
MicroCapital: What is the background of NMI?
Richard Weingarten: The Norwegian Microfinance Initiative is a new partnership between the government of Norway (through Norfund, Norway’s development finance institution), and four private sector financial services firms. Those four firms are Storebrand, a large insurance company; KLP, a large insurance and pension fund manager; DnBNOR, the largest bank in Norway, through Vital, its insurance subsidiary; and Ferd, which is a large private equity firm. This is a true public-private partnership in the sense that the private sector partners contributed capital equally with the public sector. Total capital is about USD 100 million. One of the main purposes of the partnership was for NMI, as a special Norwegian initiative, to become a significant contributor and participant in the international microfinance community.
PRESS RELEASE: IFC Loaning $70m in Local Currency to PT Bank Tabungan Pensiunan Nasional Tbk of Indonesia, with Part Convertible to Equity
Source: International Finance Corporation.
MICROCAPITAL.ORG STORY: SKS Microfinance Plans for India’s First Microfinance Institution’s (MFI) Initial Public Offering (IPO), Managed by Citigroup, Credit Suisse and Kotak Mahindra Capital
According to an article in the Financial Times, Hyderabad-based SKS Microfinance, India´s largest microfinance institution (MFI), is taking steps toward becoming the first microfinance institution (MFI) to be listed on Indian stock exchanges. The initial public offering (IPO) could come as early as the start of 2010. Investment firms Citigroup, Credit Suisse and Indian-based Kotak Mahindra Capital will manage the USD 200 to 250 million listing [1].