by Diya Chopra -

MICROCAPITAL.ORG STORY: Microfinance Institutions Jamii Bora Trust and Unitus Team Up to Build Eco-Friendly Town in Kenya

Jamii Bora Trust, a Kenya-based microfinance institution (MFI), has teamed up with Seattle, Washington-based non-profit MFI Unitus to launch an ecologically friendly town in Kenya, Africa. It is estimated that approximately 2, 500 families will purchase homes with microloans in Kaputei, a 160-hectare plot of land located 22 miles (36 kilometers) away from Kenya’s capital, Nairobi. In June 2009, 700 homes had been built, or in the process of being built. By the end of the project, 2, 000 homes are expected to be constructed.

by Diya Chopra -

MICROCAPITAL.ORG STORY: SKS Microfinance and Bajaj Allianz Life Insurance Co. Ltd. Extend Microinsurance Project ‘Swayam Shakti Suraksha’ to Cover Husbands of SKS Members

SKS Microfinance, a microfinance organization based in Andhra Pradesh (India), recently announced its partnership with life insurance company Bajaj Allianz to extend its microinsurance project, ‘Swayam Shakti Suraksha,’ to cover the husbands of SKS members.

by Radhika Chandrasekhar -

WHO’S WHO IN MICROFINANCE: The Netherlands Development Finance Company (FMO)

The Netherlands Development Finance Company (FMO) was founded by the Dutch government in 1970 as a means to stimulate sustainable growth in developing economies through private sector investment. FMO funds financial institutions or companies in developing countries by investing in housing, energy, and financial private sector projects in emerging markets.

by Diya Chopra -

MICROCAPITAL.ORG STORY: Teachers of Lira, Uganda, Flee Schools Due to Failure of Loan Payment

Christopher Okumu, chief administrative officer of Kitgum District in northern Uganda, has announced that teachers in Lira, a neighbouring district of approximately 674,744 people in northern Uganda, have ‘fled’ from their respective schools as a result of defaulting on their loan payments to various microfinance institutions (MFIs) [1].

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: The Scope For Microinsurance And The Importance Of Best Practices: Observations by ACCION International, Zurich Financial Services And Risk Management Solutions Inc.

A recent report by Mr Matthew Brodsky on the Risk and Insurance portal entitled ‘Microinsurance Has Big Upside’ [1] discusses the vast potential of the microinsurance market. Monica Brand, principal director of the Gateway Microfinance Innovation Fund at Boston-based ACCION International [2], was quoted as stating that microinsurance ‘is taking off in the sense that the commercial insurance is seeing what the commercial banking industry saw … that there’s a huge gap’ in the market.

by Diya Chopra -

MICROFINANCE EVENT: Banque Populaire and Burgundy School of Business Present Institutional and Technological Environment for Microfinance Conference, Jan 7-8, 2010, New Delhi

Event Name: Institutional and Technological Environment for Microfinance

Event Date: January 7-8, 2010

Event Location: New Delhi, India, India Habitat Center

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

by Diya Chopra -

MICROCAPITAL.ORG STORY: Unitus and Michael & Susan Dell Foundation Collaborate to Increase Use of Social Performance Management Among Microfinance Institutions

A recent press release announced a new program to be implemented by the Michael and Susan Dell Foundation in association with Unitus, an international non-profit organization specializing in microfinance. The Social Performance Management Implementation Project (SPM IP) will be launched in India to measure the impact of microfinance institutions (MFIs) on the borrowers who work with them. Social performance management is a program used to assess an organizations goals, its progress towards these goals, and the need for improving process to strengthen future performance.

by Christopher Maggio -

MICROCAPITAL.ORG STORY: BlueOrchard Private Equity Fund Invests Rs 500 million ($10.2 million) in Asmitha Microfin

BlueOrchard [1], a commercial microfinance investment intermediary based in Switzerland, has, through its Private Equity fund, invested Rs 500 million (the equivalent of over USD 10.2 million) in the equity of Asmitha Microfin Limited [2], a Microfinance Institution (MFI) based in Hyderabad, India. This was announced in a press release [3] available on the Asmitha website. Microcapital covered the relationship between these two organizations in October of 2008 when BlueOrchard made an initial equity investment in Asmitha of USD 5.3 million intended to “expand [the MFI’s] capital base and bolster its borrowing capacity” [4]. According to Dr. Vidya Sravanthi, Chairperson and Managing Director of Asmitha, the MFI hopes to use the newest investment to “[expand] its operations deeper into the Indian rural markets and offering its services to many more of the under-served poor in these regions” as well as move toward “growth targets” set by Blue Orchard [3].

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: The Importance Of Taking Deposits And A Return To Community Based Microfinance? Views From The Gates Foundation, Grameen Bank And Oxfam America In Time Magazine

In an article entitled ‘The Next Step for Microfinance: Taking Deposits’ in a recent issue of Time magazine [1], writer Ms Barbara Kiviat highlights the importance of deposit taking in the field of microfinance or what has been referred to by some development experts as the “forgotten half of rural finance.” Ms Kiviat, a staff writer for Time magazine, reiterates the point that whilst microloans are important, the service that a lot of the poor need ‘more than business loans, is a safe place to save their money’.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: Article in US Banker Magazine Refers To Microfinance Banana Skins Report 2009 And Analyses The Impact Of Global Financial Crisis On Microfinance Sector Based On Observations By Citi Microfinance, CGAP And ShoreBank International Ltd.

A recent article in the US Banker journal [1] sets out some observations about the much discussed topic of the impact of the global financial crisis on the microfinance sector. Reporter Mr Joseph Rosta makes references to the ‘Microfinance Banana Skins 2009’ [2], a publication by British-based think tank CFSI [3] that measures the risks facing the microfinance sector, and reiterates the view held by some market participants that the sector ‘could face a fall in growth and funding because of the global recession and declining investor confidence’. The survey, which forms the basis of the Banana Skins 2009 report, is based on interviews with more than 400 microfinance lenders, investors, regulators and analysts in 82 countries. The report states that of the top 10 risks now facing the microfinance sector, nine are directly or indirectly related to the economic meltdown, including the two biggest: credit risk and liquidity.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: The Economist Continues Debate About A ‘Microfinance Bubble’ And Sets Out Observations By SKS Microfinance, ACCION International And Co-Author Of ‘Portfolios Of The Poor’

In an article in the Economist magazine entitled ‘Froth at the bottom of the pyramid: Is microfinance going the same way as subprime mortgages’ [1], the Economist continues the controversial debate on the ‘microfinance bubble’ that was initiated by a series of provocative articles on the Wall Street Journal and a subsequent blog on the Reuter’s website. These articles have been discussed in previous Microcapital.Org publications [2], [3], [4]. The Economist draws our attention to a view put forward recently by Mr Vikram Akula, founder of India’s SKS Microfinance [5], who expressed disappointment at the recent ‘unbalanced and misleading’ views on microfinance investments and ‘absurd’ sweeping generalisations drawn from anecdotal evidence in one neighbourhood. The Economist reminds us that SKS is about to go public in a ‘doubtless lucrative’ IPO but the views of Mr Akula resonate with the views of other participants in the microfinance sector. Mr Alvaro Rodriguez, former chairman of ACCION International [6] and now chairman of Compartamos Banco [7], finds it hard to see how there can be a ‘bubble’ when, according to estimates, ‘there are currently 100 million microfinance clients out of one billion poor people who want access to financial services’. He added that competition among investors may generate a ‘gold rush’ and lead to ‘frothy lending’ in some instances but stated that competition is a good way to introduce innovation, greater efficiency, better products and pricing into any industry, a development he added that will ultimately benefit the microfinance customers.

by Diya Chopra -

MICROCAPITAL STORY: Nokia and SKS Microfinance to Introduce New Mobile Phone Features for Rural Poor

Nokia Corp, a Finnish telecommunications company and the world’s leading mobile phone supplier, has announced the launch of Nokia Life Tools (NLT) in 12 states across India. As mentioned in a previous MicroCapital story, Nokia has teamed up with Hyderabad-based SKS Microfinance, a non-banking finance company, to deliver these services. NLT is a feature offered on Nokia 2323 and 2330 mobile phones, enabling subscribers to access agriculture-related information, educational resources, and entertainment applications [1]. After the “great success” of a pilot project conducted in Maharashtra testing the rural market for this feature, Nokia vice-president and chief development officer Mary McDowell announced preparations to introduce NLT throughout rural India [2].