by Bharathi Ram -

MICROCAPITAL EVENT: Investments in Microfinance 2009: Conference on Surviving the Liquidity Crisis and Ensuring Sustainable Growth to be held in London, United Kingdom from July 7-8, 2009

Investments in Microfinance 2009: Surviving the Liquidity Crisis and Ensuring Sustainable Growth

July 7-8, 2009, London, United Kingdom

HansonWade Ltd., a London based research firm will host Investment in Microfinance 2009, a two-day conference event in London on the 7th and 8th of July, 2009. The event is focused specifically on the theme ‘Surviving the Liquidity Crisis and Ensuring Sustainable Growth’ and will explore how key microfinance institutions (MFIs) and funds are changing their strategies to ensure survival amidst the financial crisis. Participants at the event include institutional investors, portfolio managers, equity investors, consultants, asset managers, philanthropic investors and socially responsible investors. Key organizations participating in this event include the Deutsche Bank, JP Morgan, CitiGroup, Ford Foundation, Rockefeller Foundation, SKS Microfinance, Blue Orchard, IFC, KFW and Women’s World Banking among others. The event will be held at the Hilton Easton Hotel in London.

by Laura Anderson -

MICROCAPITAL STORY: Indian Microfinance Institutions Madura Microfinance and Grama Vidiyal Report Good Credit Growth in Fiscal Year 2009

Despite the credit crunch Indian MFIs Grama Vidiyal, and Madura Microfinance reported strong credit growth as Indian banks eased credit in order to meet their priority sector targets.  Grama Vidiyal’s disbursements grew 81.2 percent to USD 74.6 million from USD 41.2 million in the prior year.  Madura’s disbursements grew 33 percent to USD 25.3 million from USD 18.9 million in the previous year.

by Zoran Stanisljevic -

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.”

by Laura Anderson -

MICROFINANCE STORY: Cranes Software International Gets Project from Larsen & Toubro Division L&T Finance to Implement a Microfinance Lending Solution

According to a company press release on Business Wire India, Cranes Software International, a developer of statistical analysis and simulation products, has signed an agreement with L&T Finance, the financial division of Larsen & Toubro,an Indian conglomerate, to implement a microfinance lending solution.

by Laura Anderson -

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”. 

by Ryan Hogarth -

MICROCAPITAL STORY: Microinsurance Client Base of Allianz Life Indonesia Grows Four-fold in 2008

Microinsurance provider Allianz Life Indonesia has announced that its microinsurance client base grew 417 percent in 2008, from 42 thousand policyholders at the end of 2007 to 183.8 thousand at the end of the year. Its line of microinsurance products, dubbed “Payung Keluarga” (meaning “Family Umbrella”), generated a modest premium income of USD 82.5 thousand for the year, up 350 percent from USD 19.6 thousand in 2007. The significance is not the profit, but rather the increase in business volume. Payung Keluarga offers a range of life insurance products from basic credit life protection, which prevents microcredit borrowers from leaving debt to their family, to products that offer additional payouts to family upon the death of a breadwinner. Allianz Life Indonesia settled 76 microinsurance claims in 2008.

by Ryan Hogarth -

MICROCAPITAL STORY: ‘MySME News’, Backed by the European Commission’s Asian Invest Programme, Brings Business Information to Microfinance Borrowers in India and Nepal

A news source called “MySME News” has been launched in the Indian states of Karnataka and West Bengal, and Nepal, with the goal of reporting tailored business news via newsletters, mobile messaging, and community radio to microfinance customers and small and medium enterprise owners. MySME News is the initiative of three organizations: Internews Europe, a Paris-based company that funds community media projects around the world; Plural India, a New Delhi-based non-profit with a focus on reducing information asymmetries in the low-income sector; and Mahiti Infotech Pvt. Ltd., a social enterprise (for-profit, with all proceeds funneled back into the mission) that provides low-cost information technology to civil society groups. Shivendra Sharma, executive director of Plural India and former executive director of microfinance support network, PlaNet Finance, explained that the main source of information among the low-income sector is word of mouth, “Most people get it from 10 houses this side and 10 on that side.” Mahiti’s executive director, Sreekanth S. Rmeshaiah, said that the information gap is an impediment to smart investment choices: “The main idea of the project is to offer the poor a chance to make intelligent decisions through information.” Business information is also important to foster competition among microfinance enterprises (MFIs), as borrowers become more aware of their options.

by Bharathi Ram -

WHO’S WHO IN MICROFINANCE: Vikram Akula

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.

by Iyanna Holmes -

MICROCAPITAL STORY: Small Industries Development Bank of India (SIDBI) to Give $61.7m to MFIs

The Small Industries Development Bank of India (SIDBI) intends to lend Rs 300 crore, USD 61.7 million, to microfinance institutions in Orissa, India, by the end of 2010.  To date, SIDBI has disbursed Rs 250 crore, or USD 51.4 million to MFIs in Orissa.  The terms of the financing were not disclosed.  Currently Rs 100 crore is outstanding to 20 Orissa MFIs.    The bank plans to increase this number by 50 new MFIs over the next two years. 

by Jeffrey Erfe -

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.

by Iyanna Holmes -

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.

by Lori Curtis -

MICROCAPITAL STORY: Cisco, SIDBI and TREC-STEP Partner to Create ICT Entrepreneurship Pilot Project in Tamil Nadu, India

A unique information and communications technology (ICT) entrepreneurship development programme will be launched in the Tamil Nadu state in the South-eastern part of India. The project will be run through a partnership between Cisco Systems, the Small Industries Development Bank of India (SIDBI) and Tiruchirappalli Regional Engineering College-Science and Technology Entrepreneurs Park (TREC-STEP). Each partner will play an active role in the pilot programme, with SIDBI providing finance to small ICT businesses in India which will be run by former and current Cisco Networking Academy students. Cisco will subsidize the interest repayment and guarantee fees on the loans and TREC-STEP will provide customized training and mentoring to participants.