Source: Microfinance Gateway
Somenath Mukhopadhyay, a teacher in a government-run school in West Bengal, India, is the winner of the 2008 CGAP Microfinance Photography Contest. The judges unanimously chose this image of a young girl preparing radishes to take to market in Tarapur village, Birbhum, for the top prize. Amateur photographer Mukhopadhyay won out over more than 700 entries from professional and nonprofessional photographers in 40 countries all over the world.
The Consultative Group to Assist the Poor (CGAP), a policy and research center housed at the World Bank dedicated to advancing financial access to the world’s underprivileged, released a path breaking 40-page report in February 2009 entitled, “Shedding Light on Microfinance Equity Valuation – Past and Present,” produced with limited analytical support from banking firm JPMorgan Chase & Co. The white paper is notable in providing an empirically grounded analysis of how financial valuation methods are actually applied by external actors to MFIs and other lending institutions with poverty alleviation goals. This is made possible by CGAP’s collection of information on 144 private equity transactions, the largest such dataset gathered to date, as well as information on 10 MFIs and other low income focused lenders that have raised funds through the issuance of securities. The original report is available at: http://www2.cgap.org/gm/document-1.9.9021/OP14v3.pdf.
Written by Ronald U. Mendoza of the Office of Development Studies, United Nations Development Program (UNDP) and Brandon Vick of Frodham University, this paper speculates on the future of microfinance and elaborates on the role to be played by private innovations and public policies in this regard. The 43 page document was published by Fordham University, Department of Economics in its Fordham Economics Discussion Paper Series in February, 2008 and the full text is available here.
International Finance Corporation (IFC), a member of the World Bank Group, has joined forces with Bharatiya Yuva Shakti Trust (BYST), an organization that focuses on “mentoring” as a technique to help young entrepreneurs in India, and venture capital firm VenturEast Micro Equity Managers Private Limited (VMEM) to set up a fund that will provide financing to young Indian business persons with growth potential but limited resources. It will target in particular India’s disadvantaged entrepreneurs between 18-35 years, who are considered too high risk for debt financing and thus require equity injections.
Source: US Banker.
AllAfrica.com reported that Salim Saleh, the current Ugandan State Minister for Microfinance announced that the Government of Uganda (GoU) has set aside 262 billion shillings (or USD 133.7 million) to be delivered as subsidized low-interest loans through the Microfinance Support Center (MSC), to Savings and Credit Cooperative Societies (SACCO), to individuals and small businesses. MSC is a government owned limited liability company set up to aid in management of rural microfinance. The announcement was made at the launch of the MSC’s five-year strategic plan. “This company has 40 billion shillings (USD 20.4 million) for the next five months and it can loan out 9 billion shillings (USD 4.6 million) each month,” said Mr. Saleh. This budget is up from January when MSC Director, Mr. Mutebi Kityo announced that the company was prepared to loan out USD 3.5 million by February 10. Financial information is not available regarding MSC’s previous activities.
Micro Banking Summer Academy of Frankfurt School of Finance & Management
MFI Management
July 5-10, 2009
The cover story of the February, 2009 issue of US Banker was entitled, “Microfinance: Ready for its Big Leap?” In it, author John Engen lays out his expectations that a hybrid funding approach will arrive in microfinance sector – one that meshes government, non-profit, and business ethos in pursuit of a “double bottom line” that measures success both with respect to social benefits and financial returns. However, Mr. Engen argues that to attract more funding from private investors, MFIs need further adjustments in both their business practices and ideologies. While such adjustments may be controversial and draw criticism at present, in the long term the changes should induce competition in the sector, and so the theory goes, be beneficial. The real question then is: are MFIs ready for such a big leap? The full text is available at:
http://www.americanbanker.com/usb_article.html?id=20090126JLCSNV6Y&pagenum=1&numpages=3
The State of the Microcredit Summit Campaign Report 2009 was written by Sam Daley-Harris and is a 70 page report that discusses the human face of global poverty, reviews microfinance breakthroughs in helping slum dwellers move out of the slums and highlights innovations that have brought renewable energy to poor communities. The report is a summary of the achievements and innovations of the Microcredit Summit Campaign for the year 2008 as wells as notable achievements in the microfinance community in general and consists of contributions from a variety of experts in the microfinance industry. The original report is available here.
The Microcredit Summit Campaign revealed that more than 106 million of the world’s poorest received a microloan in 2007. The finding is a product of the Microcredit Summit Campaign’s annual survey of microfinance institutions (MFIs) around the world. The 106 million are made up of individuals who, at the time of receiving their first loan, were either at the bottom half of those below their nation´s poverty line, or living on less than USD 1 per day (adjusted for purchasing power parity).
MICRO BANKING SUMMER ACADEMY OF FRANKFURT SCHOOL OF FINANCE & MANAGEMENT
MICROFINANCE PRINCIPLES
JULY 3-5, 2009
Vikram Akula is the founder and chairperson of SKS Microfinance Private Ltd., a microfinance organization which provides loans to women in the poorest regions of India. SKS Microfinance was started in 1997 by Mr. Akula with a mission to empower the poor to become economically self-reliant through the provision of financial services in a sustainable manner.
Published by Microfinance Information Exchange (MIX), 13 pages, available for viewing here.
The Microfinance Information Exchange, Inc. (MIX) has released its 2008 MIX Global 100 Composite: Rankings of Microfinance Institutions. The business results of 971 MFIs for the 2007 financial year were surveyed, from which 652 profitable MFIs were sampled to present the 100 leading MFIs. The ranking measures the balance achieved by an individual MFI of three key attributes: outreach, efficiency and transparency. Outreach is determined by the number of borrowers, the growth in borrowers, market penetration, deposit to loan portfolio ratio and the depositors to borrowers ratio. Efficiency is measured by the cost per borrower to GNI per capita ratio, profit to loan portfolio, the portfolio at risk greater than 30 days and the write off ratio. Transparency is measured by the annual reporting on MIX Market and audits on MIX Market.
According to an International Federation of Red Cross and Red Crescent Societies (IFRC) four-year tsunami progress report published in July 2008, many humanitarian assistance programs aimed at helping tsunami victims along Sri Lanka’s coastline to rebuild homes and restore livelihoods have failed to bring lasting benefits to the poorest and hardest hit areas, citing lack of access to loans and financial services as one of their main obstacles.
APPLICATIONS BECOME AVAILABLE ONLINE ON JANUARY 15, 2009 AND ARE DUE BY FEBRUARY 22, 2009.
Engineers for Social Impact (E4SI) has commenced its second annual rigorous recruitment process to match the most talented ten undergraduate students from fifteen elite Indian engineering schools with partner social enterprises that focus on development by means of sustainable for-profit entrepreneurship. E4SI fellowships promise to be highly entrepreneurial in a way that combines the best of consulting, technology, and social innovation. Fellows will gain unprecedented access to the development sector as they work with leading social entrepreneurs, attend leadership workshops at the Indian School of Business (ISB), Hyderabad, and pitch their ideas to thought leaders as they join an outstanding cohort of exceptional young leaders.
Partner social enterprises for the 2009 edition of the E4SI fellowship program are leaders in microfinance, multiple bottom-line investment advisory, education, energy, and healthcare. Among them are: Ujjivan, Intelicap, iDiscoveri, and Solar Electric Light Company (SELCO India).
For more information on the Engineers for Social Impact fellowship and details on how to apply for the 2009 edition, please visit the E4SI website. Applications are due on February 22, 2009.
The Bill and Melinda Gates Foundation has donated USD 700 thousand in the form of a grant to the Microcredit Summit Campaign‘s (MSC) project entitled “Movement Above the US One Dollar Per Day Threshold“. The funds will be used to form expert panels who will develop credible methodologies for determining the number of microfinance clients who have crossed the USD 1 a day threshold between 1990 and the current year. The funds will also be used to research and produce studies based on the recommendations of these panels. A Bangladesh Expert Panel has already convened, an India Expert Panel is currently being formed, and an Ethiopia Expert Panel is being planned for 2009. While this is the first time the Bill and Melinda Gates Foundation has provided funding to the Microcredit Summit Campaign, it has previously provided funding to the RESULTS Educational Fund, MSC’s founding organization.
Source: Microcredit Summit Campaign