by Steven Craig -

MICROCAPITAL STORY: UPS to Issue Grants Totaling USD $1m to Microfinance Organizations ACCION International, Opportunity International and FINCA International

United Parcel Service (UPS), a global package delivery service founded in 1907, has created a Centennial Grants Fund in honor of UPS’s 100 year anniversary. UPS’s fund has issued USD 1 million to three microfinance organizations that support micro-entrepreneurs across the globe. ACCION International will receive USD 400,000, Opportunity International will receive USD 390,000 and FINCA International will receive USD 210,000. The creation of the Centennial Grants Fund is the first time UPS has dedicated such a large portion of its corporate philanthropy to microfinance and micro-lending.

by Elizabeth Nelson -

MICROCAPITAL STORY: Standard Chartered Bank to Increase Microfinance Investment, Government Restrictions Limit Growth

Standard Chartered (StanChart) Bank, India’s largest international bank, will increase its involvement in microfinance in the coming year, according to CEO-India of StanChart Bank Neeraj Swaroop. The bank plans to boost its investment in the sector and the number of its partnerships with microfinance institutions (MFIs). “The aim is to increase our exposure from current level of close to Rs 100 crore (USD 25.36 million) to about Rs 500 crore (USD 126.8 million) by December 2008,” Mr. Swaroop said.

by the MicroCapital Team -

MICROCAPITAL STORY: Our Picks from the Latest Additions to the Microfinance Gateway Library

Last month, the Microfinance Gateway added 51 documents to its free library. Here are our favorites:

MFI Capital Structure Decision Making: A Call for Greater Awareness (CGAP Brief), Deshpande, R., Nestor, C., Abrams, J. & Littlefield, E., CGAP.
This brief summarizes findings from a study on MFI capital structuring and makes recommendations for optimizing MFI balance sheets.

by Elizabeth Nelson -

MICROCAPITAL STORY: Legatum Invests $8.4m in Mumbai-based Microfinance Investment Consultant, Intellecap

Legatum Capital, a private firm that invests in global capital markets and social development initiatives, announced that it has invested USD 8.4 million (INR 34 crore or 340 million) in Intellecap, a company based out of Mumbai and Hyderabad, India which provides business advisory services to investors and organizations seeking both financial and social returns on investments. Among the services offered by Intellecap is Intellecash, a microfinance best practices franchise package that, according to the website, provides franchisees “with the information, systems, and processes that are required to start and manage profitable microfinance operations.” This is India’s first microfinance franchising initiative.

by the MicroCapital Team -

Rating Fund Posts Seven New Microfinance Reports

The following institutions have recently had their rating reports added to The Microfinance Rating and Assessment Fund’s (Rating Fund’s) list of rating reports:

  • Agency for Finance Kosovo, Microfinanza Rating, March 2007
  • Buusaa Gonofaa Ethiopia, Planet Rating, July 2007
  • CCA Cameroon, Microfinanza Rating, May 2007
  • CEP Vietnam, Planet Rating, August 2007
  • Credit Cambodia, Planet Rating, August 2007
  • People’s Forum India, CRISIL, September 2007
  • Seilanithih Cambodia, CRISIL, September 2007

The Rating Fund was founded in May 2001 by the Inter-American Development Bank (IDB) and the Consultative Group to Assist the Poor (CGAP). The European Union subsequently joined the Rating Fund in January 2005.

by Amy Rennison -

MICROFINANCE EVENT: Financial Research Associates to Host First Microfinance Conference for Institutional Investors

MICROFINANCE FOR THE INSTITUTIONAL INVESTOR; JANUARY 14-15, 2008; NEW YORK, USA

The event, hosted by Financial Research Associates, is designed to help institutional investors understand the world of microfinance and allow them to identify low-risk market-rate returns while alleviating poverty. The conference will review microfinance institutions and capital management in-depth and will cover specific topics such as microfinance rating methodology, securitization techniques and portfolio risk reduction strategies. There will be speakers and keynote presentations from some of the leading microfinance players.

by the MicroCapital Team -

MICROCAPITAL STORY: European Bank for Reconstruction and Development (EBRD) and Citigroup Loan USD 16.4 Million to ACBA-Credit Agricole Bank in Armenia

This is another story coming courtesy from the latest issue of the Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse. ACBA-Credit Agricole Bank (ACBA), an Armenian microfinance institution (MFI), has received two loan investments totaling over USD 16.4 million. The European Bank for Reconstruction and Development (EBRD), a UK-based international financial institution, provided half of the investment in a USD 8.2 million loan. Citigroup has matched EBRD’s USD 8.2 million loan, however lent ACBA the finances through EBRD’s A/B loan structure. According to the EBRD website, the A/B loan structure allows EBRD to sign off as the official lender of record, while Citigroup receives the lender’s benefits that would have otherwise gone to EBRD. The combined loans add to ACBA’s gross loan portfolio of 90.4 million, an increase of 18.1 percent. ACBA now has over USD 158.5 million in total assets (see “Financial Data”).

by Steven Craig -

MICROCAPITAL STORY: Citi Foundation and Pakistan Poverty Alleviation Fund Announce 2007 Micro-entrepreneurship Awards Program in Pakistan to Highlight Microfinance

The Pakistan Poverty Alleviation Fund (PPAF), a Pakistani organization dedicated to assisting poor and rural communities in Pakistan, and Citi Foundation, a philanthropic outreach arm of Citigroup, announced they will hold for the third consecutive year an awards program dedicated to micro-entrepreneurship. The program, “Citi-PPAF Microentrepreneurship Awards Programme 2007,” will recognize the efforts made by micro-entrepreneurs to improve the quality of life for their families and their communities. It is designed to demonstrate the impact of microfinance on micro-entrepreneurs and poverty reduction.

by the MicroCapital Team -

PAPER WRAP-UP: Microfinance: An Emerging Asset Class for Equity and Debt Investors, by Marco Coppoolse

By Marco Coppoolse. A White Paper Published by Microcapital in August 2007. 10 pages. Available at www.microcapital.org/downloads/whitepapers/Emerging.pdf

Mr Coppoolse supports the nascent microfinance asset class in two ways with his whitepaper, which was published by MicroCapital today. First he shows the strength and potential of the sector with some innovative research on nine of the leading MFIs (microfinance institutions) in the world. In the process he introduces a new performance indicator, “comparable return on equity” (CRoE) to be used alongside current indicators to help advise potential equity and debt investors on their microfinance investment decisions.

The conclusions are that the industry show high growth and high returns on a global basis, is still underleveraged, has high expense ratios, has good asset quality and has returns of a global nature that show no geographic bias.

by Steven Craig -

MICROCAPITAL STORY: Technology Review Names Tapan Parikh 2007 Humanitarian of the Year for His Work on Mobile Phone Technologies Designed for Microfinance and Rural Development

Technology Review, an independent media company owned by the Massachusetts Institute of Technology, has named Tapan Parikh its 2007 Humanitarian of the Year for his work on mobile phone technologies geared toward microfinance and other rural development initiatives. Mr. Parikh, a doctoral candidate in computer science at the University of Washington, was honored in Technology Review’s 2007 report, TR35, which showcases the technological achievements of pioneering innovators under the age of 35.Mr. Parikh’s innovation is CAM, a framework of mobile tools that integrate through the use of a camera-enabled mobile phone. The CAM framework uses the mobile phone to capture images, scan documents, and to record and transmit financial transaction data.