by Jeffrey Erfe -

MICROCAPITAL EXCERPT: “The Battle for the Soul of Microfinance,” by Financial Times Senior Columnist Tim Harford

What follows is an excerpt from Tim Harford’s piece “The Battle for the Soul of Microfinance,” which appeared in the Financial Times’ Weekend Reportage section on December 6, 2008.  Mr. Harford, a Senior Columnist at the Financial Times, has written an excellent introduction to the competing commerical and altruistic motivations behind microfinance–and the current disputes they have generated–that have come to dominate so much of the industry today.  The full piece also cites several interesting studies whose findings may affect microfinance institutions’ (MFIs) procedures for vetting micro-loan applicants or their manipulation of interest rates resulting from either profit-driven or philanthropic motives.  The full article is available online to those who have registered for free with the Financial Times.

by Yrenilsa Lopez -

MICROCAPITAL STORY: Madura Micro Finance to receive USD 4.52 Million from Unitus Equity Fund L.P. to expand upon Rural Microcredit Products in India

Unitus Equity Fund L.P., a Seattle-based private equity investment firm announced a funding of Rs 22 Crores (USD 4.52 million) to Madura Micro Finance Limited (MMFL) an Indian microfinance institution. Madura is a non-banking finance company servicing India’s rural poor population. It has credit networks throughout the 182 branches within the rural Tamil Nadue province, and mostly works in association with large commercial banks as sources of credit.

by Greg Casey -

MICROCAPITAL STORY: Indian Technology Company, Comat, Raises $12.5m from Omiydar Network and Unitus Equity Fund of the United States

Comat, a technology company providing services to rural India, recently raised INR 60 crore (USD 12.5m) from the Omidyar Network and the Unitus Equity Fund (UEF). According to a Business Standard article, the new investment will allow “Comat to expand to new States, accelerate service delivery for training and financial services [and] strengthen management bandwidth.”

by Greg Casey -

MICROCAPITAL STORY: Micro Finance Bank of Azerbaijan (MFBA) Renamed Access Bank

According to the Azeri Press Association, the Micro Finance Bank of Azerbaijan (MFBA) has been officially renamed Access Bank. The name stems from Access Holding, which controls a 16.53 percent stake in the microfinance institution (MFI). The news comes after MFBA recently attracted increased funding from the IFC and British Petroleum (BP).

by Greg Casey -

WHO’S WHO IN MICROFINANCE: The Legatum Group

The Legatum Group, founded in 2006 from the de-merger of Sovereign Global, is a collection of investment organizations based in Dubai, United Arab Emirates. The separate companies comprising Legatum include Legatum Capital, a global investment firm; Legatum Global Development, a socially-responsible investment firm that also provides grants and policy advocacy services to promote sustainable development; the Legatum Center for Development and Entrepreneurship at MIT; and the Legatum Institute, which is an independent policy advisory firm.

by Jocelyn Cheng -

MICROCAPITAL STORY: Lok Capital and the Dell Foundation Announce Investment in Indian Microfinance Organization Arohan

Lok Capital, a microfinance venture capital fund focused on India, and the Dell Foundation, a charitable organization, have announced an investment in Arohan Financial Services Limited, a for-profit Indian microfinance institution (MFI).  The size of the equity investment was not disclosed. Arohan offers microcredit and credit-linked insurance to urban women in Kolkata, and it plans to use the funds to expand operations to other urban centers in eastern India and to expand its product offering.

by Ryan Benson -

MICROCAPITAL STORY: Nonprofit Unitus Launches For-profit Financial Advisory Firm ‘Unitus Capital’

Unitus, Inc., an international nonprofit that seeks to advance market-based solutions to poverty, recently launched Unitus Capital, a for-profit financial advisory firm that aims to connect capital market investors with social enterprises focused on creating both social and financial returns. Operating as a legally independent, for-profit institution, Unitus Capital represents the transformation of nonprofit Unitus’ capital markets business unit. It will remain a strategic affiliate of Unitus. The nascent institution has received USD 5.5 million in seed funding from private investors including WEGA Support GmbH, Robert Gay, co-founder and CEO of H&G Capital Partners, and William S. Price III, Founding Partner of Texas Pacific Group. Unitus Capital did not disclose its number of employees; nonprofit Unitus currently employs 21-100 individuals, according to nonprofit research firm GuideStar. The firm’s Managing Directors include Kylie Charlton and Eric Savage, both founding members of Unitus Capital. Both Charlton and Savage were most recently employees of nonprofit Unitus’ capital markets unit. Before Unitus, both worked for Citigroup in separate investment banking units. For a complete profile on Unitus Capital’s management team, please click here.

by Anthony Busch -

PAPER WRAP-UP: Social Entrepreneurship: The Case for Definition, Mr. Roger L. Martin and Mrs. Sally Osberg

Authored by Mr. Roger L. Martin, the Dean of the University of Toronto’s (U of T) Rotman School of Management (Rotman) and a board member at the Skoll Foundation, and Mrs. Sally Osberg, President and CEO of the Skoll Foundation, published Spring 2007 in the Stanford Social Innovation Review (SSIR), a publication of the Center for Social Innovation (CSI) at Stanford University’s Graduate School of Business (GSB), 13 pages, available at http://www.skollfoundation.org/media/skoll_docs/2007SP_feature_martinosberg.pdf

by Sarah Knapp -

MICROCAPITAL STORY: Moldovan Microfinance Institution (MFI) Microinvest Receives Investments totaling $5.5m from Oikocredit, Soros Economic Development Fund (SEDF), the Balkan Financial Sector Equity Fund (BFSE) and Richard Driehaus

Recent investments totaling the equivalent of USD 5.5 million have been made to Moldovan microfinance institution (MFI) Microinvest by its shareholder’s: Oikocredit, Soros Economic Development Fund (SEDF), the Balkan Financial Sector Equity Fund (BFSE) and Richard Driehaus. Oikocredit contributed the equivalent of USD 1.3 million, SEDF the equivalent of USD 834,055, BFSE the equivalent of USD 2.98 million and Richard Driehaus the equivalent of USD 367,995. The investments led to an increase in Microinvest’s authorized capital to the equivalent of USD 7.5 million. Microinvest aims to expand technology, products and services.

by Melissa Duscha -

MICROCAPITAL STORY: The African Development Bank (ADB) Approves US $900,000 Investment in Access Holding AG-Sponsored Access Bank Liberia (ABL) and $1m grant to Support Micro-enterprises in Liberia

In an effort to support post-conflict recovery in Liberia, the African Development Bank (ADB) approved an equity investment of USD 900,000 in Access Bank Liberia (ABL) and a USD 1 million grant from the ADB-managed Fund for African Private Sector Assistance (FAPA) to be used in the development of micro-enterprises in the region.

by the MicroCapital Team -

MICROFINANCE EVENT: Silicon Valley Microfinance Network (SVMN) to Co-host Investment Conference in San Francisco in July

MICROFINANCE: THE INVESTMENT OPPORTUNITY: SMALL LOANS. BIG RETURNS.

JULY 14-15, 2008, SAN FRANCISCO, UNITED STATES

The Silicon Valley Microfinance Network (SVMN) and Financial Research Associates offer this event on investing in institutions that provide banking services to the poor. A pre-conference workshop will cover the basics of microfinance, while the main event will offer presentations from 60 experts including Elizabeth Funk of Dignity Fund, Vinod Khosla of venture capital firm Kleiner Perkins Caufield & Byers and Pierre Omidyar of philanthropic investment firm Omidyar Network. Session topics are to include:

by Jennifer Lee -

MICROCAPITAL STORY: Citi Foundation Creates USD 11.2mn Program with SEEP Network to Strengthen Trade Associations

The Citi Foundation will work with the Small Enterprise Education and Promotion Network (SEEP) to create the 3-year USD 11.2 million Citi Network Strengthening Program. The program will include 12 major microfinance trade associations and their members.