by Stefanie Rubin -

MICROCAPITAL.ORG STORY: Finance Minister of Bangladesh Says Climate Change is Major Factor Impeding Economic Growth for Low-Income Citizens

At a conference on extreme poverty in Bangladesh, the Finance Minister of Bangladesh, Mr. Abul Maal Abdul Muhith, announced that “global climate change poses the greatest challenge today in our poverty mitigation efforts.” He added that microcredit is not the prime tool for poverty alleviation, but that it can “very well be an aid to mitigating poverty” [1, 2].

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: CEO Of Delhi-Based NGO Access Development Services Warns Of The Risks Of Commercialization And Government Intervention In Microfinance And Discusses The Need For ‘Microfinance-Plus’ Services Including Livelihood Planning

In a recent article in India’s Business Standard online paper entitled ‘There is a tension between scale and soul in microfinance’ [1], reporter Sreelatha Menon interviews the CEO of Access Development Services (ADS) [2], Mr Vipin Sharma, on microfinance and the forthcoming event organized by on ADS later this month on responsible and social finance. Delhi-based ADS is a non-profit company that was established in March 2006 with a focus on ‘incubating emerging MFIs’ and helping them ‘upscale their operations, enhance their portfolio and meet the growing demand among poor communities’. ADS also seeks to facilitate on-lending fund flows from financial institutions through the ACCESS Microfinance Alliance platform [3].

by Stefanie Rubin -

MICROCAPITAL.ORG STORY: Banco Compartamos SA Applies for Banking License to Accept Deposits from Clients

Banco Compartamos SA, a publicly traded Mexican bank and the largest microfinance institution (MFI) in Latin America with USD 587.8 million in total assets, plans to apply for a license to expand its banking services [1, 2, 3]. The license will allow the bank to take deposits by offering savings accounts to clients. It will also allow third parties to use the deposits to issue credit to and take interest payments from some of Compartamos´ 1.2 million customers.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: CGAP Microfinance Blog Comments On Case Studies On The Liquidation Of Microfinance Institutions And Highlights Challenges Associated With Retaining Borrower Repayment Incentives In The Midst Of A Deteriorating Loan Portfolio

In a blog on the CGAP Microfinance Blog portal entitled ‘When MFIs fail, is their loan portfolio worth anything?’ [1], Senior Advisor to Research and Market Intelligence Team at CGAP, Mr Richard Rosenberg refers to Mr Daniel Rozas’s publication entitled ‘Throwing in the Towel: Lessons from MFI Liquidations’ [2]and makes some observations about the steps an MFI should take to maximise collections on a deteriorating loan portfolio. Mr Rosenberg notes that Mr Rozas’ article offers a ‘useful, timely, concise, and readable study of a half-dozen MFI failures, focusing on efforts by creditors and others to collect the loan portfolio of the defunct institutions’ but cautions that some of Mr Rozas’ recommendations may be difficult to implement in practice.

by Zoran Stanisljevic -

MICROCAPITAL EVENT: Mobile Money Transfer (MMT) APAC Conference & Expo, December 8-9, 2009, Manila, Philippines, Sponsored by Obopay

Event Name: Mobile Money Transfer (MMT) APAC Conference & Expo, December 8-9, 2009, Manila, Philippines

Date: December 8-9, 2009
Type: Conference
Location: Manila, Philippines

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

by Christopher Maggio -

MICROCAPITAL.ORG STORY: Peru Ranks First in 2009 Microscope Microfinance Index, A Global Index on Business Environment for Microfinance Developed by the Economist Intelligence Unit (EIU), Released by the Inter-American Development Bank (IDB), the Corporación Andina de Fomento (CAF), the International Finance Corporation (IFC), and the EIU

Peru has been named the best country for microfinance in terms of business climate by the 2009 Microscope microfinance ranking from the Economist Intelligence Unit (EIU), the research arm of the Economist Magazine that provides “country, industry and management analysis” [1,2,3]. The 2009 Microscope was published jointly by the Inter-American Development Bank (IDB), the “main source of multilateral financing” in Latin America and the Caribbean, the Corporación Andina de Fomento (CAF) the primary source of multilateral financing in the Andean region, the International Finance Corporation (IFC), the investment arm of the World Bank, and the EIU [4,5,6]. Last year, Peru was named the best country for microfinance in Latin America and the Caribbean. This was covered by Microcapital in October of 2008 [7,8,9]. This year, the rankings were made globally and Peru still topped the list of 55 countries [1].

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: International Banking Systems Online Journal Publishes Supplement On The Role of Technology In Microfinance And Highlights Importance Of Risk Management Systems

The International Banking Systems publication (IBS), an online journal that provides information on banking systems and operations, have produced a detailed supplement on the role of technological systems in microfinance [1]. An article within the supplement entitled ‘Technology for Microfinance – Trends driving the technology’ [2], the authors discuss the growing importance of risk management systems in MFIs. These systems are significant as they allow MFIs to address critical issues such as over-indebtedness, a problem which has become acute for some MFIs in the current financial turmoil, and report to their investors promptly.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: Wharton Business School Online Portal Acknowledges The Need For Innovation In The Microinsurance Sector And Highlights The Existing Barriers To A Wider Acceptance Of Microinsurance Products Based On Observations By UK-Based Microinsurance Research Centre, Munich Re Foundation And The ILO’s Microinsurance Innovation Facility

  A recent article on the ‘Knowledge@Wharton’ online portal entitled ‘Microinsurance: A safety net with too many holes’ [1] contains a detailed discussion of existing challenges facing the microinsurance market. The article notes that there has been some recent innovation in the microinsurance sector, a market that has experienced relatively slow growth compared to the microfinance sector in general. The authors note that innovation is to be welcomed and a Bangladeshi pilot microinsurance programme is cited as an example.

by Stefanie Rubin -

MICROCAPITAL.ORG STORY: Opportunity International Expands Education Finance Program with $10m for Entrepreneurs to Open Schools in Poor Neighborhoods

Opportunity International, a nonprofit microfinance organization founded in 1971 by Al Whittaker and David Bussau, announced at the Clinton Global Initiative’s Fifth Annual Meeting that it will expand its Banking on Education program to five additional countries over the next 24 months.  Opportunity will commit USD 10 million to its education finance program, which provides loans for entrepreneurs to open schools in poor areas where it is difficult for children, particularly girls, to access public schools [1, 2].  Opportunity reaches over one million clients globally with products including loans, insurance and technical services.  As of December 2008, it had USD 799 million in assets [3].  To view the 2008 Annual Report, see [4] in the bibliography.

by Christopher Maggio -

MICROCAPITAL.ORG STORY: Citi Microfinance Executive, Robert Annibale, Says Financial Crisis Will Spur Microfinance to Move Toward a Banking Model

The Wall Street Journal Online has reported on the comments of Robert Annibale, global director of Citi Microfinance, the arm of the financial services company dedicated to fostering microfinance through funding and support [1,2]. Mr. Annibale believes that more microfinance institutions (MIFs) will begin to “seek banking licenses to broaden their sources of funding” [1]. He sees the lack of liquidity caused by the financial crisis as creating a situation in which MFIs need “diversified funding” and that deposits are one source that MFIs should draw from. In Mr. Annibale’s opinion, deposits have more stable sources of funding in the financial crisis than “selling debt on the capital markets or loans from public and private sector banks” [1]. As debt and credit markets have slowed down during the financial crisis, these sources of funding have been more difficult to obtain, which Mr. Annibale says has not been the case with deposits [1]. He cites the trajectories of MFIs such as Peru’s MiBanco and Mexico’s Banco Compartamos SA, “which started as non-government organizations and later became banks in order to offer a wider range of products” as being indicative of a greater trend to come in microfinance [1,3,4,5,6].

by Zoran Stanisljevic -

MICROCAPITAL PAPER WRAP-UP: Microfinance Investment Vehicle (MIV) Performance and Prospects: Highlights from the CGAP 2009 MIV Benchmark Survey by CGAP

By CGAP, published by CGAP, September 2009, 6 pages, available at:
http://www2.cgap.org/gm/document-1.9.38570/CGAPBrief_MIV.pdf

Consultative Group to Assist the Poor (CGAP) has recently published a Benchmark Survey which illustrated that while MIVs grew by 31 percent in 2008, overall MIV performance may deteriorate in 2009 as increased credit risks persist. The survey also revealed MIVs efforts to include environment, social and governance considerations in their investment policies, due diligence, and monitoring.

The survey represents 103 MIVs (90 percent of total MIV assets within the MIV investment universe) with an estimated USD 6.6 billion in assets under management. Growth in MIV assets were supported by both public and private investors as retail investors continued to invest in MIVs as well.