by Greg Casey -

WHO’S WHO IN MICROFINANCE: The Legatum Group

The Legatum Group, founded in 2006 from the de-merger of Sovereign Global, is a collection of investment organizations based in Dubai, United Arab Emirates. The separate companies comprising Legatum include Legatum Capital, a global investment firm; Legatum Global Development, a socially-responsible investment firm that also provides grants and policy advocacy services to promote sustainable development; the Legatum Center for Development and Entrepreneurship at MIT; and the Legatum Institute, which is an independent policy advisory firm.

by Greg Casey -

MICROCAPITAL STORY: Philip Vassiliou of Legatum Capital Publishes Editorial Supporting For-Profit Microfinance in The Economic Times

In a recent Economic Times editorial, Philip Vassiliou, managing director of Legatum Capital, an international investment firm, argues that, “to reach its full potential, the microfinance sector must embrace free market principles of competitive pricing and commercial incentives.” He also believes that “modifying these incentives, however noble the intention, will only damage the natural development of the sector.” His comments come at a time of fierce debate over the benefits of commercial microfinance.

by Jocelyn Cheng -

MICROCAPITAL STORY: HSBC Turkey Allocates USD 5 million to Microfinance Loans in Turkey

HSBC Turkey, the Turkish arm of the global bank HSBC, announced the allocation of USD 5 million toward microcredit loans until 2010 in Turkey. According to Piraye Antika, the CEO of HSBC Turkey, the microcredit loans will be evenly split between urban areas, rural areas and young university-graduate entrepreneurs. In disbursing the loans, HSBC will work with three non-government organizations: the Turkish Waste Prevention Foundation, the Community Volunteers, and the Female Labor Assessment Foundation.

by Greg Casey -

MICROCAPITAL STORY: United States Electronic Payment Company Obopay and Grameen Solutions of Bangladesh Partner in ‘Bank A Billion Initiative’ to Provide Microfinance Services through Mobile Phones

Obopay and Grameen Solutions have announced the new Bank A Billion Initiative, which aims to provide microfinance services through cell phones. The project, which will begin in Bangladesh and Mumbai, India, will allow customers to complete a number of financial transactions, including savings, money transfer, payments and micro-credit, using only their cell phones starting in October 2008.

by Ryan Benson -

MICROCAPITAL STORY: Establishing Syria’s First MFI, Aga Khan Continues to Expand Its Global Microfinance Network

Nonprofit AKAM (Aga Khan Agency for Microfinance), a unit of AKDN (Aga Khan Development Network), continues its rapid expansion of microfinance operations with the recent establishment Syria’s first microfinance institution. Suitably named “First Microfinance Institution” (FMFI), the microlender is scheduled to begin operations in the coming weeks, providing financial services to individuals currently bypassed by mainstream banking, a market that constitutes 90 percent of the country’s population. FMFI’s financial services will include both microloans and deposit facilities, and will serve Syrians in six of the country’s fourteen provinces.

by Jocelyn Cheng -

MICROCAPITAL STORY: Following Strategic Review, the Gates Foundation to Focus on Microsavings Within Microfinance Initiative

The Bill and Melinda Gates Foundation, a charitable organization that was created in 2000 with an endowment of USD 35.9 billion, plans to direct hundreds of millions of dollars to promoting savings programs designed for the poor over the coming years, reports the Wall Street Journal.  Following a review of its existing microfinance grants and a broader study of its financial services strategy, the Gates Foundation decided to focus its efforts on promoting savings in the developing world.

by Greg Casey -

MICROCAPITAL STORY: Nobel Laureate Muhammad Yunus Speaks Out Against For-Profit Microfinance from Asia-Pacific Microcredit Summit

Muhammad Yunus, the microfinance pioneer and winner of the Nobel Prize for founding the Grameen Bank, spoke out against the growing trend of commercial microfinance. In an interview with CNNMoney.Com, Yunus chastised those involved with for-profit microfinance by saying that “poor people should not be considered an opportunity to make yourself rich.” These remarks come at the start of the Asia-Pacific Regional Microcredit Summit 2008 in Bali Indonesia.

by Greg Casey -

MICROCAPITAL STORY: Ugandan Government Sets Interest Rates for Savings and Credit Cooperative Organizations at 9 to 13 Percent

The government of Uganda has set interest rates for Savings and Credit Cooperative Organizations (SACCOs) at 9 to 13 percent. SACCOs became regulated in June 2008 after a rash of investigations into illegal behavior and fraud. These microfinance institutions are now controlled by the The Uganda Cooperative Savings and Credit Cooperative Union, a newly established government regulatory agency.

by Ipek Kuran -

MICROCAPITAL STORY: General Electric Consumer Finance (GE Money), based in London, supports FINCA Village Banking, based in Washington DC, with USD 1.5 million Grant

General Electric Consumer Finance (GE Money) has made a three-year commitment worth USD 1.5 million to support FINCA’s (Foundation for International Community Assistance) Village Banking Campaign. Founded in 1984, FINCA’s Village Banking aims to reach 1 million of the world’s lowest-income entrepreneurs by the end of 2010. During 2008, FINCA will use the first USD 500,000 installment of the funding to expand in Middle East, Africa, Eurasia and Asia.

by Ipek Kuran -

MICROCAPITAL STORY: HSBC Ammanah partners with Islamic Relief to Launch Microfinance Program in Pakistan

HSBC Amanah, the global Islamic banking division of HSBC group, has partnered with Islamic Relief, an international development and relief organization, to offer Islamic Microfinance in Pakistan. Islamic microfinance, just like Islamic banking, will provide financial services to devout Muslims in accordance with the Shariah, the Islamic law. HSBC Amanah will provide both training and funding for Islamic Relief’s microfinance projects, starting in Rawalpindi, Pakistan.

by Ipek Kuran -

PAPER WRAP-UP: Transforming NGO MFIs: Critical Ownership Issues to Consider, by Kate Lauer

Written by Kate Lauer, lawyer and a policy advisory consultant to Consultative Group to Assist the Poor (CGAP), published in June 2008 as Number 13 of Occasional Papers, a publication of CGAP, 28 pages, available at http://www.cgap.org/gm/document-1.9.4213/OccasionalPaper_13.pdf

by Sarah Knapp -

MICROCAPITAL STORY: Pochampally Chenetha Kalanetha Collectives, Samhita Microfinance and Synergics Awarded at the 2008 Srijan Microfinance Business Plan Competition hosted by Intellecap, Standard Chartered Bank, Aavishkaar Goodwell and Financial Express

Srijan recently announced the winners of its 2008 Business Plan Competition, reported by MicroCapital here. Cash prizes were given to the top three contestants, with the first prize sponsored specifically by Standard Chartered Bank. The winners will also have the opportunity to meet investors, though Srijan has not yet specified which investors. All finalists will be able to create accounts on the India Development Gateway Portal, as reported here by MicroCapital.