The chairman of the Bank of Ceylon (BoC), Dr Gamini Wickramasinghe, has told the Sri Lanka Daily News that the bank would be opening several more branches in the Northern and Eastern Provinces of the country soon, saying that with the war coming to an end there will be a huge demand for banking services in these areas. According to Dr. Wickramasinghe, the Sri Lankan government expects more foreign exchange to flow into the country to develop the devastated provinces, especially from the Sri Lankan disaspora. The openings will include more branches in each province to provide microfinance services, as well as nine ATMs in the North, seven ATMs in the East, and 11 mobile units. Dr. Wickramasinghe said there are currently 25 branches in the North and that by year-end there will be 31 branches in the East, focusing on small and medium enterprises.
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MICROCAPITAL STORY: SKS Microfinance, Share Microfin, and Equitas Microfinance Collaborate with Yes Bank to Securitize a Series of Micro-loans in India that Cumulatively Amount to USD 38.3 Million.
According to S. Dilli Raj, CFO of SKS Microfinance, the first securitized deal by an Indian MFI has received the highest rating (P1+SO; very strong safety) by CRISIL (A Standard & Poor`s company). CRISIL assigned a very strong safety review based on an analysis of over 1 million loans that were extended by SKS Microfinance Private Limited. Also, the series of recent transactions concluded allows YES Bank to purchase 14,850 micro loans that have been extended to unbanked and minority families as identified by the Reserve Bank of India (RBI) as “weaker sections” The transactions covers roughly 400,000 micro loan borrowers (average loan size USD 178 dollars) and spans across three microfinance institutions (MFIs).
MICROCAPITAL STORY: Cambodian Microfinance Lenders See Number of Non-Performing Loans Rising Above 1 Percent in 2009
According to a report in the Phnom Penh Post, Cambodian microfinance institutions predict that as the economic crisis spreads, their level of non-performing loans (NPLs) will grow. “Our major concern now is that nonperforming loans will go up,” said Bun Mony, a member of the board of the Cambodian Microfinance Association (CMA) and chairman of Sathapana Limited, a Cambodian MFI with 37,000 clients. “We forecast that NPLs will increase to 1 percent or higher this year due to the economic downturn that is affecting our clients’ incomes.” According to Bun Mony, the NPL rate at his institution was only 0.16 percent at the same time last year. Even as the global economy slows, Bun Mony still expects his overall loan portfolio to grow. Sathapana lent USD 37.5 million last year and expects that to rise to USD 44.5 million in 2009.
MICROCAPITAL STORY: Mexico’s Fifth-Biggest Bank Grupo Financiero Banorte SAB is Closing its Microfinance Division Creditos Pronegocio after Experiencing Losses of USD 8.4 Million for 2008
The Wall Street Journal (WSJ)/(Dow Jones) reported that Grupo Financiero Banorte SAB (Mexico’s fifth-biggest bank) is closing its microfinance division Creditos Pronegocio. The bank suffered losses of USD 8.4 million for 2008. Alejandro Valenzuela, Grupo Financiero Banorte, chief executive stated to the WSJ that the bank has been in liquidation mode since 2008 and that they “feel that right now it is a major distractions from the big challenges we face.”
MICROCAPITAL STORY: India’s microfinance sector softens while Indian MFIs Turn to Securitizing Loans to Raise Funds
As the microfinance sector in India begins to unwind, more microfinance institutions in the country are increasingly looking at securitization as a method for off-balance sheet financing for capital relief. The intention is to free up capital and reduce borrowing costs. According to Dilli Raj, Chief Financial Officer of SKS Microfinance, “securitization is a win-win for both MFIs and banks/investors.”
MICROCAPITAL STORY: Microfinance Continues to Play a Key Role in Developing Economies as Remittances to Latin America and the Caribbean Decline in 2009.
The Inter-American Development Bank (IBD) predicts 2009 with be the first year that remittances will decline in Latin America and the Caribbean after a decade of growth. The IBD has been tracking these flows since 2000. Remittances are transfers of money by foreign workers to their home countries. With the already shaken international banking system, following the collapse of Lehman Brothers in September 2008, Immigrants are feeling the credit squeeze as they reduce money sent to family in their home countries.
MICROCAPITAL STORY: Fitch Rates Uzbekistan Microcreditbank at B-
Fitch has assigned a long term issuer default rating of B minus with a stable outlook to Uzbekistan-based Microcreditbank (MCB). According to a Morningstar press release, MCB’s long- and short-term ratings are underpinned by the Uzbekistan government’s 83 percent stake in the bank. The rating reflects Fitch’s belief in the likelihood of government support should the bank come under stress, due to the bank’s important social function of providing microloans as well as the dominance of state resources in MCB’s funding structure. The rating is constrained by the Uzbekistan government’s sovereign risk profile.
MICROCAPITAL STORY: Microfinance Insights Reports Over 80% of Investors Haven’t Reduced Microfinance Investment Portfolio Due to Global Recession
In its latest issue Microfinance Insights explores how industry stakeholders have been affected by the global liquidity crisis. While microloan clients have been squeezed by the crisis and MFIs have struggled to work with less liquidity, equity investors continue to show interest in investing in large microfinance institutions, confident they will weather the crisis. In this issue the magazine surveys 120 MFIs and 40 investors from around the world.
PAPER WRAP-UP: 2008 Microscope on the Microfinance Business Environment in Latin America and the Caribbean (LAC), (Part II of II), by The Economist Intelligence Unit
Published by the Economist Intelligence Unit, October 2008, available at:
The Economist Intelligence Unit released a 62 page report that provides a framework of the microfinance business environment in Latin America and the Caribbean. The report was commissioned by the Inter-American Development Bank and the Corporacion Andina de Fomento and also looked at three major individual features that provide greater insight to the microfinance arena. The three categories are as follows: regulatory framework, investment climate and institutional development. The indicator scores are aggregated to produce an overall score ranging from 0 to 100 (note, 100 being the best score). While these scores are provided, the report utilizes these figures in a “strengths” and “challenges” framework.
MICROCAPITAL STORY: Equitas Micro Finance Gets Transaction Securitized and Rated by CRISIL, Structured and Arranged by the Institute for Financial Management and Research
Equitas Micro Finance India announced it has completed a microloan backed rated securitization worth USD 3.0m. According to a press release in the Economic Times, the pass-through certificates are rated by CRISIL and backed by microloan receivables originated by Equitas. CRISIL is an Indian rating company and a division of Standard and Poor’s. The Series A1 certificates are rated AA(so) and the Series A2 certificates are rated BBB(so). IFMR, the Institute for Financial Management and Research in India, structured and arranged the transaction. The COO of Equitas, S. Baskar, commented “traditionally MFIs in India have had to access only banks for debt raising, placing limitations. This transaction would open a new window to the industry to raise debt from those banks which do not generally participating (sic) in funding to MFIs”.
MICROCAPITAL STORY: Indian SKS Microfinance Issues Bonds and Commercial Notes, and Announces a $963.6m Borrowing Plan to Finance Rapid Growth
Hyderabad-based SKS Microfinance announced that it aims to raise one-tenth of its USD 963.6 million borrowing plan for the next fiscal year through USD 96.4 million worth of securitization deals with financial institutions. The announcement was made shortly after SKS sold USD 4.8 million non-convertible debentures (NCD) with YES Bank and generated another USD 4.8 million through the issuance of commercial paper (CP). Last month, SKS solidified a USD 38.5 million securitization deal with India’s second largest bank, the Industrial Credit and Investment Corporation of India (ICICI). These deals come as SKS strives to finance a loan portfolio that is growing at one of the fastest rates among microfinance institutions (MFIs) in the world.
MICROCAPITAL EVENT: Financial Research Associates, LLC to host Microfinance West 2.0: The Social and Commercial Investor’s Summit on July 13-14, 2009 in Washington, D.C
Microfinance West 2.0: The Social and Commercial Investor’s Summit
July 13-14, 2009, Washington, D.C.
Financial Research Associates (FRA), LLC the research firm in California providing focused business information to executives and managers, will host Microfinance West 2.0: The Investment Opportunity Summit in Washington D.C. on the 13th and 14th of July, 2009. The two day event will be geared specifically towards social and commercial investors and will focus on an array of topics including the role of intermediaries in a microfinance deal, the value of ratings in today’s economy, new opportunities for microfinance professionals and new investment strategies for pensions, foundations and endowments. The event is open to current and prospective microfinance investors, public pension funds, private pension funds, foundations, endowments, other institutional investors, investment consultants, social entrepreneurs, microfinance managers, high net worth individuals, family offices, microfinance funds, attorneys, investment and commercial banks. The event details have been posted on the FRA website
PRESS RELEASE: AccessBank’s Portfolio sets new records
Source: AccessBank.
Baku, 23 February 2009 – AccessBank continues to set new records in its business lending. Today the business loan portfolio crossed the USD 200 million and 50,000 client thresholds. Almost simultaneously the Micro loan portfolio exceeded USD 100 million demonstrating the bank’s commitment to its corporate mission of providing access to financial services for micro and small entrepreneurs. It is notable that the Micro loan which pushed the portfolio over this new threshold was disbursed by the Khachmaz branch as AccessBank attaches special improtance to increasing access to financial services specifically in the regions of Azerbaijan. AccesssBank is experiencing increased demand for its services and only during the first three week of this month the Bank has disbursed over 4,500 micro business loans for over USD 13 million. These are record figures for the bank for a three-week period. Loans for micro and small enterprises are a specialization of AccessBank. The Bank disburses loans to its customers depending on their needs starting from 100 up to one-million USD / AZN / EUR.
MICROCAPITAL STORY: Russian Delegation Visits Grameen Bank of Bangladesh in Efforts to Scale-Up Microfinance Industry and Mitigate Financial Crisis
Bangladeshi news source The Daily Star reported that a high-profile Russian delegation visited the Grameen Bank in Bangladesh to examine how the country regulates its relatively saturated microfinance industry. The delegation observed the operations and legal structure of Grameen Bank in hopes to replicate the structure in Russia. The four-day visit came as Russia explores ways to scale-up its microcredit program to fill a void left by the global financial meltdown. “The global financial crisis has affected many small businesses in Russia while the conventional banks are not willing to finance them for risk involvement in such financing,” said delegation leader and Russian Deputy Minister for Economic Development, Anna Popova, at a joint press conference with Muhammad Yunus in Dhaka City.
NEWS WIRE: S.E.VEN Fund Awards Grant: Improving Flows of Foreign Capital to the Microfinance Industry
Source: NewsGuide.us
MICROCAPITAL STORY: World Bank Sees Microfinance as Strong Asset Class in Midst of Financial Crisis According to the New York Times; A Target $600m Fund Managed by BlueOrchard, ResponsAbility, and Cyrano Management Will Be Launched to Support MFIs
The World Bank Group and the German government intend to launch a 600 million USD “Microfinance Enhancement Facility,” according to a report from the New York Times. The fund aims to support microfinance institutions in developing countries facing difficulties as a result of wholesale credit tightening stemming from the recent turmoil in global capital markets.
MICROCAPITAL STORY: Zurich Financial Services Group Collaborates With Women’s World Banking (WWB) to Offer Microinsurance Services to Female Caregivers
Insurance Journal reports that Zurich Financial Services Group, an insurance focused financial services provider, has reached an agreement with Women’s World Banking (WWB), a New York based network of microfinance providers and banks, to establish strategic collaboration in the area of microinsurance. Under the arrangement, a global program will be created to pilot and roll out “caregiver” products, insurance-based solutions providing predefined benefits to clients of WWB affiliate institutions during hospitalization events. The target demographic is primarily female caregivers in low-income households. MicroInsurance Center LLC, a consultancy and research group focused on developing sustainable insurance programs, will aid in designing the endeavor. No further information regarding the specifics of the agreement is released.
NEWS WIRE: Fitch Sees Microfinance Tested By Crisis
Source: Easy Bourse.