IDBI Fortis Life Insurance Co. Ltd., a relatively new Indian private life insurance company, has launched a new Group Microinsurance Plan. The plan provides affordable life insurance coverage to groups such as microfinance institutions (MFIs), self help groups (SHGs), and non-governmental organizations (NGOs). The plan insures the lives of the group members as well as provides protection from loan liabilities in the case of death of the primary earner of the family.
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MICROCAPITAL STORY: Azerdemiryolbank of Azerbaijan Receives $3m Loan from ING Bank to Support Microfinance Business
Azerdemiryolbank of Azerbaijan received a 12-month loan worth USD 3 million from the ING Bank of the Netherlands. According to a press release on Trend Capital, the loan would support microfinance businesses in Azerbaijan. The release quoted Mr. Yusif Jabbarov, the Vice-Chairman of the Bank, as saying the stated loan was the first cooperation in micro-crediting between a Dutch bank and an Azerbaijani lending agency.
MICROCAPITAL STORY: ACCION Invests $4.2m in Two Microfinance Companies: Mauritius Based Leapfrog Investments Ltd and Swiss Based Paralife, Invests in Initiatives Aimed at Moving Microfinance ‘Beyond Credit’
ACCION International, a microfinance organization founded in 1961, has invested a total of USD 4.2 million in ParaLife, a Swiss microinsurance holding company and LeapFrog Investments, a USD 100 million microinsurance investment fund headquartered in Mauritius. In a press release found on Microfinance Gateway, Ms. Monica Baron, the principal director of ACCION’s Gateway Microfinance Innovation Fund, said that the investment by ACCION was aimed at moving microfinance ‘beyond credit’. The press release quoted Ms. Baron as saying the future of financial inclusion lay in offering the working poor a basic suite of all financial tools instead of providing only credit. In this regard, Ms. Baron mentioned that ACCION believed both ParaLife and LeapFrog Investments would be leaders for the industry, developing flexible, responsive insurance products that would meet the needs of a broad range of low income clients.
MICROFINANCE EVENT: University of California, Berkeley Hosts 10th Annual Global Business Plan Competition for Social Ventures
GLOBAL SOCIAL VENTURE 2009 COMPETITION (GSVC)
WHO’S WHO IN MICROFINANCE: Neptune Software Plc
Founded in 1999, Neptune Software Plc is a banking software provider. The UK-based company has over 170 employees and offices in the UK, South Africa, Nigeria, Kenya, Uganda, and India. Neptune partners with technology leaders such as BEA, Oracle, Sybase, IBM, and Business Objects. While Neptune also provides financial services software to the broader financial services industry, the company has created a niche with microfinance institutions. In Nigeria, Neptune has partnered with over 45 successful microfinance institutions. In 2005, CGAP awarded the company the highest rating, 4 stars, for its operational excellence.
TECHNOLOGY FOCUS: Mobile Finance – Indigenous, Ingenious or Both?
Originally reported in PCWorld by Ken Banks.
In Ghana, it’s popularly known as susu. In Cameroon, tontines or chilembe. And in South Africa, stokfel. Today, you’d most likely call it plain-old microfinance, the nearest term we have for it. Age-old indigenous credit schemes have run perfectly well without much outside intervention for generations. Although, in our excitement to implement new technologies and solutions, we sometimes fail to recognize them. Innovations such as mobile banking — great as they may be — are hailed as revolutionary without much consideration for what may have come before or who the original innovators may have been.
NEWS WIRE: Social Entrepreneurs Turn Business Sense to Good
Source: Business Week.
MICROCAPITAL STORY: Unitus, Inc. and Whole Planet Foundation Announce Partnership With Jamii Bora Trust, a Kenyan MFI
Unitus, Inc. and Whole Planet Foundation (WPF), a Whole Foods Market foundation, announced plans to fuel the growth of microfinance in the coffee-growing regions of Kenya. Specifically, the two will support Jamii Bora Trust, one of Kenya’s fastest growing microfinance institutions and a Unitus partner since 2003, expand into the rural coffee-growing regions of Central and Eastern provinces in Kenya. This agreement, the amount of which was undisclosed, marks Whole Planet Foundation’s first entry into Africa.
MICROCAPITAL EXCERPT: “The Battle for the Soul of Microfinance,” by Financial Times Senior Columnist Tim Harford
What follows is an excerpt from Tim Harford’s piece “The Battle for the Soul of Microfinance,” which appeared in the Financial Times’ Weekend Reportage section on December 6, 2008. Mr. Harford, a Senior Columnist at the Financial Times, has written an excellent introduction to the competing commerical and altruistic motivations behind microfinance–and the current disputes they have generated–that have come to dominate so much of the industry today. The full piece also cites several interesting studies whose findings may affect microfinance institutions’ (MFIs) procedures for vetting micro-loan applicants or their manipulation of interest rates resulting from either profit-driven or philanthropic motives. The full article is available online to those who have registered for free with the Financial Times.
PRESS RELEASE: Legatum FORTUNE Technology Prize Awarded to Comat Technologies
Source: Legatum.
MICROCAPITAL STORY: Challenges and Unique Solutions to Providing Microinsurance in West Africa
The products and services of most West African insurance companies target corporate clients and those individuals that are not living in poverty. The infrastructure of most insurance companies is not equipped to provide insurance to the poor. Microinsurance premiums are low, administrative costs are high, and traditional distribution channels are not always effective. Also, because premiums are low, microinsurance is a long term investment from the insurance company’s perspective as opposed to traditional insurance companies which collect larger premiums. All of these factors combined, reports Business Day, a Nigerian business news source, result in scarce microinsurance offerings to West Africa’s poor populations.
MICROCAPITAL EXCERPT: Selected Microfinance Articles from the Journal of Microfinance Published by Brigham Young University’s Economic Self-Reliance Center
‘In God We Trust’: A Qualitative Study of Church-Sponsored Microfinance at the Margins in Nicaragua
by Michael J. Pisani
A qualitative study of CARITAS Matagalpa was undertaken in May 2003. CARITAS Matagalpa is a large, self-sustaining microfinance institution that is located in central Nicaragua and affiliated with Catholic Relief Services. In-depth interviews with 36 microentrepreneurs, all clients of CARITAS Matagalpa, reveal that access to microfinance has enabled these entrepreneurs to start, expand, and develop their enterprises. These interviews also reveal that access to microfinance has also enhanced the life chances of the microentrepreneurs’ households. Additionally, multivariate statistical tests suggest the following: (1) Loan size is directly related to urban location and length of repayment period. (2) The degree of firm-level informality diminishes in urban areas and increases relative to the work experience of the microentrepreneur. (3) Income for self-employed microentrepreneurs is influenced by business sales volume, work experience, number of employees, and loan size.
NEWS WIRE: Mumbai: Big Microfinance Firms Taking Over Clients of Smaller Players
Source: Live Mint.
MICROCAPITAL STORY: Acumen Fund Invests 2.8 Million into Development and Microfinance Programs in Pakistan
Acumen Fund, a venture capital fund that invests in sustainable development operations, announced four new investments in Pakistan. The investments amount to over USD 2.8 million. Acumen Fund began investing in Pakistan in 2002 with a focus on the housing sector, providing slum-dwellers with affordable legal housing and infrastructure alternatives, as well as financial services that allowed low-income clients to improve their homes and supplement their incomes. Acumen Fund has since expanded its focus to address the broader set of critical issues keeping the majority of the population of 160 million people in poverty.
MICROCAPITAL STORY: UN Chief Says Bangladesh on Its Way to Becoming a Middle Income Country
UN Secretary-General Ban Ki-moon of South Korea, predicted that Bangladesh will become a middle-income country in the next 10 years on a recent visit to Bangladesh. Addressing the media at a press conference, he reflected on a visit to Bangladesh 33 years ago and lauded the changes and achievements in economic growth, poverty reduction, family planning, educating girls, and reducing the mortality rate.
PRESS RELEASE: Lok Capital Capital Invests in Jagannatha Financial Services Ltd.
Source: Lok Capital.
MICROCAPITAL STORY: Are Microfinance Operations Boosting Asian Banks Against Financial Shocks?
The CEO and Managing Director of Sri Lanka’s Hatton National Bank, Rajendra Theagarajah, stated that large populations and microfinance in Asia have provided a “buffer” against the global financial crisis. An article in Sri Lanka’s Daily News reported on a speech Theagarajah gave at the Lanka Business Report-Lanka Business Online CEO Forum, stating that Asia has been able to withstand shocks to the global financial crisis due to a strong banking sector, the market available as a result of large populations, and investing in microfinance instead of focusing on subsidies. Theagarajah highlighted countries such as Cambodia, Indonesia and Bangladesh as having banks which have previously invested in microfinance and as a result have had extremely high profit margins. The banks to which he was referring were not identified, nor the role played by microfinance in any profit increases. He also stated that banks in Asia have adopted measures since the 1997 Asian Financial Crisis that are further protecting them from feeling strong negative impacts of the current crisis.
PRESS RELEASE: Special Report Looks At The Microfinance Industry’s Changing Strategies
Source: Thai PR.