Microfinance: The Investment Opportunity for Pensions, Endowments, Foundations & Social Investors, July 13-14, 2009, at Washington, D.C., presented by Financial Research Associates, LLC.
July 13-14, 2009, at Washington, D.C.
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Source: Outlook Business (India).
Symbiotics SA, the Geneva-based investment advisor and information resource for the microfinance industry, has announced a collaboration with the Luxembourg Fund Labelling Agency (LuxFLAG). In an unrelated event, Symbiotics spins-off its Luxembourg consulting arm into an independent company, Innpact Sàrl.
In March 2009, responsAbility Global Microfinance Fund (rAGMF) reported four loans to the Consultative Group to Assist the Poor (CGAP) Microfinance Dealbook, a monthly report on microfinance capital market transactions. responsAbility is a Switzerland-based asset management firm that connects social investors with microfinance institutions (MFIs). Three loans were made to Peruvian MFIs Caritas del Peru (USD 500,000), MiBanco (USD 7.5 million) and to Proempresa (USD 1 million (in local currency)). A Loan was also granted to FIELCO of Paraguay of USD 1.5 million. These loans were made through responsAbility’s Global Microfinance Fund (rAGMF) which invests either directly in MFIs or indirectly through microfinance investment vehicles.
During March and April MicroVentures, a microfinance investment vehicle, reported four loans to the Consultative Group to Assist the Poor (CGAP) Microfinance Dealbook, a monthly report on microfinance capital market transactions. Two equity investments were made to Indian microfinance institutions (MFIs) Sahayata Microfinance Ltd and Equitas Microfinance Ltd in March of USD 3.7 million and USD 4.4 million respectively. MicroVentures also granted loans to Caritas del Peru of USD 1 million and to Fondesurco of Peru of USD 750,000 during April.
Source: Gulf News
In April, Bank Danamon, Indonesia’s fifth largest lender, completed a USD 362 million stock offering, the largest ever bank stock offering in Indonesia. Citigroup Global Markets Singapore and Morgan Stanley Asia were joint standby purchasers on the deal. Danamon has a very active microfinance division called Danamon Simpan Pinjam (DSP). Although Danamon experienced 30.2 percent drop in year over year first-quarter net profit in 2009, its Capital Adequacy Rating (CAR) increased to 22 percent from 15.4 percent due to the stock offering. In an interview with The Asian Banker, Danamon’s President Director and former Citigroup executive, Sebastian Paredes, stated, “After this capitalisation, Bank Danamon is probably going to be one of the highest capitalised banks in the world.”
As reported in the Economic Times of India, UTI Asset Management, an Indian mutual fund, has teamed up with Invest India Micro Pension Services (IIMP), a pension and insurance products company for low-income workers, and BASIX, a Hyderabad-based microfinance institution, to offer a micro pension scheme. The partnership is supported by a grant from the German development bank KfW of approximately Rs. 2.2 Crore (USD 438,000) to IIMPS for technical support. Under the plan UTI will offer its UTI-Retirement Benefit Pension Fund to customers of BASIX.
The International Finance Corporation (IFC) announced that it will be investing up to USD 15 million in Azerbaijan’s AccessBank. AccessBank provides financial services to Micro and Small Enterprises (MSE) within Azerbaijan. Its mission is to be the leading provider of credit to MSE’s. The IFC, a member of the World Bank, will provide this long term loan to reach underserved regions of the country and provide micro and small businesses with access to credit.
Financiera Independencia, a Mexican microfinance bank, reported their first quarter 2009 Net Income of 117.2 million pesos (USD 8.9 million). This was a decrease of 40 percent on a year-to-year basis. Net Operating Revenue of 612.8 million pesos (USD 46.6 million) did not fall significantly over the same period (0.2 percent), however Interest Expense increased by 150 percent or 57 million pesos (USD 4.3 million) and the Provision for Loan Losses increased by 61 percent or 76.8 million pesos (USD 5.8 million).
Bank Sri Partha, a local commercial bank based in Bali, was officially transformed into Bank Andara, an Indonesian microfinance wholesale bank, after raising USD 5 million in capital from social investors. Bank Andara will operate as a “bank of banks,” with a focus on assisting microfinance institutions such as cooperatives, rural banks, and rural credit agencies.
According to a report in the Moscow Times, OAO Sberbank, the largest bank in Russia, has announced it will begin offering two-year microloans ranging from 30,000 rubles (USD 880) up to 1 million rubles (USD 29,000) to small businesses. Business owners will have to back the loans with personal collateral the bank said.
Microfinance Gateway, an online resource for the global microfinance community, and a service of CGAP, has announced that it has revamped its website, creating a new look, improved navigation and new interactive features. The site will have an interactive library of over 7,000 microfinance documents with ratings and reviews, a job board with the capacity to post jobs or receive emails about jobs, an interactive event calendar, daily news, announcements, blogs, and comment boards.
Banco Compartamos SA, a Mexican microfinance bank reported first quarter Net Interest Income after provisions rose 27.3 percent over the previous year to 913 million pesos (USD 69.6 million), and Net Income increased 14.7 percent from a year earlier to 288 million pesos (USD 21.9 million). The increase was due primarily to an increase in interest income of 36.9 percent resulting from a 42.4 percent growth in the bank’s loan portfolio to 6.3 billion pesos (USD 480 million) due to a larger client base. Total active clients rose to 1,200,124 or an increase of 40.1 percent over first quarter 2008. Offsetting these improvements was a 115.2 percent increase in interest expense due to the increase in leverage to finance this growth and secure funds in the volatile financial environment.
Source: Microfinance Gateway
The International Finance Corporation (IFC), a member of the World Bank Group, announced that it is investing USD 4 million into Kyrgyz microfinance institution Bai Tushum. The investment will help the company provide loans to about 10,000 microenterprises, private entrepreneurs, and farmers in remote areas of Kyrgyzstan. The Kyrgyz Republic joined the IFC in 1993 and the IFC has since committed almost USD 75 million to the country, including USD 5 million in advisory services focused on microfinance, housing finance, corporate governance, and business environment.
Sebastian von Stauffenberg, MicroRate’s author of the 52 page report, provides a framework for how the impact of the global financial crisis on Latin America and the Caribbean MFIs evolved during the last quarter of 2008.
While MFIs initially reported that the global financial crisis had yet to affect the economy in the LAC region, the latest data suggests that lending in 2008 slowed more dramatically than MFIs admitted to in October and November 2008. MFIs reduced the number of loans to higher risk clients, enforced stricter lending criteria and strengthened provisioning policies, with some MFIs reducing their average loan balance.
Despite the credit crunch Indian MFIs Grama Vidiyal, and Madura Microfinance reported strong credit growth as Indian banks eased credit in order to meet their priority sector targets. Grama Vidiyal’s disbursements grew 81.2 percent to USD 74.6 million from USD 41.2 million in the prior year. Madura’s disbursements grew 33 percent to USD 25.3 million from USD 18.9 million in the previous year.