by Ryan Hogarth -

MICROCAPITAL STORY: Pakistani Microfinance Institutions Charged with Deceiving Borrowers

Pakistani Microfinance Institutions (MFIs) found themselves in heavy criticism at a workshop on the state of microfinance held in Islamabad.  The workshop was organized by the Planning Commission of the Government of Pakistan to revisit the policies in place for MFIs and determine recommendations for the future of the industry.  

by Andrea Chu -

MICROCAPITAL STORY: BASF SE and Grameen Healthcare Trust Create Social Business BASF Grameen Ltd.

BASF SE and Grameen Healthcare Trust, a member of the Grameen Family that helps build new microfinance institutions (MFIs) around the world, have announced the establishment of BASF Grameen Ltd. BASF Grameen Ltd is a joint social business venture whose purpose is to improve the health and business opportunities of the poor in Bangladesh. To meet this purpose, the company will start with two products from BASF’s portfolio, a dietary supplement sachet containing vitamins and micronutrients and impregnated mosquito nets that offer protection against insect-borne disease.

by Bharathi Ram -

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.

by Jeffrey Erfe -

MICROCAPITAL STORY: Thirty-Five Organizations Sign Client Protection Principles to Ensure Fair Treatment and Financial Protection of Low-Income Microfinance Clients

In late October, 35 microfinance institutions (MFIs) and investment funds signed the Client Protection Principles (CPP), a list of pro-consumer principles and mandates that aims to become an industry-wide standard for ensuring the fair treatment and financial protection of low-income microfinance clients.  The CPP are part of a larger campaign launched in September of 2008 at the annual meeting of the Clinton Global Initiative, a conglomeration of governments and public and private organizations dedicated to sustainable development, with the goal of incorporating at least half of the world’s 500 largest MFIs within the next three years. According to Consultative Group to Assist the Poor (CGAP), there is little evidence of client abuse in the microfinance sector.  

by Anthony Busch -

MICROCAPITAL STORY: The Rotarian Action Group for Microcredit (RAGM) Promotes Worldwide Rotary Involvement in Microfinance at Last Month’s 2008 Rotary International (RI) Convention by Hosting Phil Smith (Author of A Billion Bootstraps) Christopher Crane (CEO of Opportunity International), and Lynn McMullen (Co-founder of the Global Democratic Citizens Union)

Last month—June 15th through the 18th—Rotary International (RI), a service organization with 1.2 million members in over 32,000 clubs located in more than 200 countries, held its annual convention, which was attended by more than 19,000 Rotarians, participants of Rotary youth programs, and other guests. With a larger emphasis than ever before in the organization’s history, microcredit was promoted as an attractive cause for Rotarians around the world to support by establishing sustainable microfinance projects and partnering with existing microfinance institutions (MFIs). Behind the push is the Rotarian Action Group for Microcredit (RAGM), a voluntary association of Rotarians aiming to educate the general membership, standardize Rotarian/MFI partnerships, and ultimately increase Rotarian involvement in microfinance activities for the long-term.

by Anthony Busch -

MICROCAPITAL STORY: AfriCap Microfinance Fund (AfriCap) of Mauritius Makes a $1.1m Equity Investment in Société de Financement de la Petite Entreprise (SOFIPE) of Burkina Faso

The Consultative Group to Assist the Poor (CGAP) reports in its list of recent transactions that AfriCap Microfinance Fund (AfriCap) made a USD 1.1 million equity investment in the newly established Société de Financement de la Petite Entreprise (SOFIPE), a microfinance institution (MFI) in Burkina Faso, on March 1st, 2008.

by Melissa Duscha -

MICROCAPITAL STORY: Norwegian Investment Fund for Developing Countries (Norfund) Invests USD 2.5 million in Cambodian Microfinance Institutions

 The Consultative Group to Assist the Poor (CGAP) recently reported the Norwegian Investment Fund for Developing Countries (Norfund) invested loans totaling USD 2.5 million in Cambodian microfinance institutions, Hattha Kaksekar Ltd. (HKL) and Cambodian Entrepreneur Building (CEB). Hattha Kaksekar Ltd. received USD 1 million dollars in loans this past September 2007, and CEB received USD 1.5 million in January 2008.

by Melissa Duscha -

MICROCAPITAL STORY: St. Honoré Microfinance Fund invests USD 150,000 in FOLADE (Fondo Semilla)

According to the Consultative Group to Assist the Poor (CGAP) report of recent transactions, St. Honoré Microfinance Fund invested USD 150,000 in The Latin American Development Fund, FOLADE (Fondo Semilla) this past January 10, 2008.

by Elizabeth Nelson -

MICROCAPITAL STORY: Uganda’s Construction Sector Suffers from Soaring Interest Rates, Microfinance Institutions (MFIs) May Hold the Key

African Alliance, a group which provides investment banking services across the African continent, recently released a report on Uganda’s construction sector which found that, despite unprecedented growth, the industry is being threatened by financial risk. To mitigate the likelihood of default, most financial institutions charge construction firms high interest rates coupled with short repayment periods. However, the increasing number of players, particularly microfinance institutions (MFIs), is expected to help drive down interest rates.

by Steven Craig -

MICROCAPITAL SPECIAL FEATURE: 2007 Equity Investments in Small and Medium Sized Microbanks, Part 3 of 3

December 10, MicroCapital.org featured Part 2 of a series on 2007 Equity Investments in Small and Medium Sized Microbanks. Previously, detailed information was provided on institutions with less than USD 100 million in assets. Here, in Part 3, we provide detailed financial and outreach information on microbanks with total assets greater than USD 100 million and less than USD 200 million. The institutions are presented in ascending order based on asset size.

by Steven Craig -

MICROCAPITAL SPECIAL FEATURE: 2007 Equity Investments in Small and Medium Sized Microbanks, Part 2 of 3

On December 5, MicroCapital.org featured Part 1 of a series on 2007 Equity Investments in Small and Medium Sized Microbanks. Here, in Part 2, we provide detailed financial and outreach information on microbank’s with total assets under USD 100 million. The institutions are presented in ascending order based on asset size.

by Steven Craig -

PAPER WRAP-UP: Microfinance Investment Vehicles (CGAP Brief), by Xavier Reille and Ousa Sananikone

By Xavier Reille and Ousa Sananikone, published by Consultative Group to Assist the Poor (CGAP), April 2007, 2 pages, available on the Microfinance Gateway at http://www.microfinancegateway.org/content/article/detail/40677

The paper, a Consultative Group to Assist the Poor (CGAP) brief, by Xavier Reille and Ousa Sananikone, highlights the growth of foreign capital investment in microfinance, specifically the proliferation and impact of private investment funds. The authors begin by describing two primary players in microfinance investment, international financial institutions (IFIs), which provide seed capital to start-up microfinance institutions (MFIs), and private investment funds know as microfinance investment vehicles (MIVs). IFIs are investment arms of public development agencies. For example, the International Finance Corporation (IFC), a member of the World Bank Group, is considered an IFI. The Netherlands Development Finance company (FMO) is also an IFI. MIVs, on the other hand, draw funds from the private sector. BlueOrchard, an MIV, manages funds that deliver capital from private investors directly to MFIs through loans and other structures. MIVs are, in essence, financial intermediaries that act as distribution channels of private monies.

by Steven Craig -

MICROCAPITAL STORY: Swiss responsAbility Microfinanz-Fonds Loans over $1.3m to Eastern Europe Microfinance Institution MIKROFIN

The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse, reported responsAbility Microfinanz-Fonds, a Luxembourg-based fund, has issued a loan of USD 1.36 million to MIKROFIN, an Eastern Europe microfinance institution (MFI).