by Andrea Chu -

MICROCAPITAL STORY: Expanding Microfinancing in Latin America

In his article, published in British newspaper Financial Times, Jonathan Wheatley reports that, as the global banking system sinks into its worst crisis since the 1930s, there is a resurgence of interest in microfinance among Latin American banks. Several articles and papers have reported on this up and coming trend.

by Zoran Stanisljevic -

PAPER WRAP-UP: 2008 Microscope on the Microfinance Business Environment in Latin America and the Carribean (LAC), (Part one of a two part series), by The Economist Intelligence Unit

Published by the Economist Intelligence Unit, October 2008, available at:

http://a330.g.akamai.net/7/330/25828/20081014142739/graphics.eiu.com/marketing/microfinance/English_Microscope%202008.pdf

The Economist Intelligence Unit released a 62 page report (October 2008) that provides a framework of the microfinance business environment in Latin America and the Caribbean. The report was commissioned by the Inter-American Development Bank and the Corporacion Andina de Fomento and also looked at three major individual features that provide greater insight to the microfinance arena.  The three categories are as follows: regulatory framework, investment climate and institutional development.  The indicator scores are aggregated to produce an overall score ranging from 0 to 100 (note, 100 being the best score).  While these scores are provided, the report utilizes these figures in a “strengths” and “challenges” framework.

by Ryan Hogarth -

MICROCAPITAL STORY: ACCION’s “Lend to end Poverty” Petition Surpasses 20k Signatures Calling on World Economic Forum to Focus on Microfinance

As nearly 2500 world business leaders gathered in Davos, Switzerland for the World Economic Forum (WEF) Annual Meeting 2009, ACCION announced that its “Lend to End Poverty” petition surpassed the 20 thousand signature mark. The online petition began earlier in January, and calls on the co-chairs to promote and prioritize microfinance as a subject at the conference. ACCION estimates microfinance could benefit 500 million poor entrepreneurs over the next 10 years, and is only reaching 10 to 20 percent of its potential today.

by Bharathi Ram -

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.

by Jeffrey Erfe -

PIONEERS IN MICROFINANCE: Six Pioneers in Latin America: Álvaro Dávila of Colombia, Joseph Blatchford of the USA, Theodore C. Ning, Jr. of the USA, Mercedes Canalda de Beras-Goico of the Dominican Republic, Clara Serra de Akerman of Colombia, and José Ignacio Avalos Hernánde of Mexico

Microcapital has identified the following six microfinance “pioneers,” individuals who have made long-standing contributions to the evolution and promotion of microfinance practices and/or technology. While not all of these pioneers hail from Latin America, all have been instrumental to the development of microfinance in that region. These pioneers are: Álvaro Dávila of Colombia, Joseph Blatchford of the USA, Theodore C. Ning, Jr. of the USA, Mercedes Canalda de Beras-Goico of the Dominican Republic, Clara Serra de Akerman of Colombia, and José Ignacio Avalos Hernánde of Mexico. Below are short descriptons of the contributions of each:

by Scott Everett -

MICROCAPITAL STORY: Microfinance Institution ACCION International Launches New Hub in Africa

ACCION International, a microfinance organization founded in 1961, launched a new hub office and training center in Accra, Ghana, with the aim to expand financial services for Africa’s poorest populations. The new center will offer support to East and West African microfinance institutions (MFIs) in the form of education and training to increase capacity. According to the press release, ACCION’s goals are to train 3,000 microfinance practitioners in such disciplines as business planning, risk management, lending and governance; all through its training center network.

by Jeffrey Erfe -

MICROCAPITAL STORY: Inter-American Development Bank (IADB) Projects First Time Drop in Real Value of Remittances to Latin America and the Caribbean in 2008

The Inter-American Development Bank (IADB) recently announced a projection that the value of remittances sent by migrant workers to their families in Latin America and the Caribbean will grow in 2008 by its slowest rate on record.  Migrants sent home about USD 66.5 billion last year but may increase that amount by about 1.5 percent in 2008, bringing the yearly total to USD 67.5 billion.   Despite the nominal increase, remittances in 2008 may for the first time contribute 1.7 percent less (p. 1) to household incomes after accounting for rising Latin-American inflation and the falling U.S. dollar. 

by Yrenilsa Lopez -

MICROCAPITAL STORY: Madura Micro Finance to receive USD 4.52 Million from Unitus Equity Fund L.P. to expand upon Rural Microcredit Products in India

Unitus Equity Fund L.P., a Seattle-based private equity investment firm announced a funding of Rs 22 Crores (USD 4.52 million) to Madura Micro Finance Limited (MMFL) an Indian microfinance institution. Madura is a non-banking finance company servicing India’s rural poor population. It has credit networks throughout the 182 branches within the rural Tamil Nadue province, and mostly works in association with large commercial banks as sources of credit.

by the MicroCapital Team -

GUEST EDITORIAL: Ties to Capital Markets Challenge Microfinance Institutions

Once relatively insulated from the world’s financial system, the microfinance industry is finding itself more closely tied to the capital markets than ever before. As a result, it is far from being immune to the current financial crisis, and some microfinance institutions (MFIs) are beginning to see their cost of borrowing go up as a consequence of the global credit crunch.

by Greg Casey -

MICROCAPITAL STORY: Foromic Conference, hosted by the Inter-American Development Bank, to Focus on Responsible Finance, Response to International Crises, Rural Finance, Housing, Technology, Venture Capital and the Importance of Networks

On October 8-10, the Inter-American Development Bank (IDB) will host the sixth edition of the Forum on Microenterprise (FOROMIC). Aside from a general discussion on microfinance in Latin America and the Caribbean, the conference will focus on responses to international crises, rural finance, housing, technology, venture capital and the importance of networks. To learn more about this event, please read this previous MicroCapital story.