SKS Microfinance Private Limited, an Indian microfinance institution (MFI), launched operations in Kerala, marking it as the fifteen state in which SKS is active. According to SKS Chief Operating Officer M.R. Rao, Kerala has been targeted on SKS’ growth map for a while because of the demographics of its inhabitants, who are largely dependent on fishery and handicrafts as primary sources of income in a state where 360,000 of 1,900,000 total poor households are headed by women.
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MICROCAPITAL STORY: Old Mutual (OM) Supports Expansion of Women’s Development Bank (WDB) Microfinance into KwaZulu-Natal, South Africa with USD 710,000
Old Mutual (OM), the largest financial services provider in South Africa, recently released a press release announcing a donation of ZAR 5 million (USD 710,000) to the Women’s Development Bank (WDB) Microfinance, a South African non-governmental organization (NGO) that provides micro-loans and training for poor, rural women.
MICROCAPITAL STORY: The Alliance for Fair Microfinance Launches with Discussion of Cost Prices of Micro-loans
The Alliance for Fair Microfinance (the Alliance) will launch with its first discussion period, which is set to start at the latest in the first week of January of 2008. The Alliance is an initiative to promote customer / client interests in the microfinance industry by providing direction and platform for discussion among the actors of the microfinance industry.
NEWS WIRE: Mexico: Business Week Reports on “Ugly Side” of Microfinance
Source: Business Week.
MICROCAPITAL STORY: Tameer Microfinance Bank (TMFB) to Offer Customers Access to One-Link ATMs Throughout Pakistan
Tameer Microfinance Bank (TMFB), a commercial microfinance bank in Pakistan, has signed an agreement with One-Link, a Pakistani Automated Teller Machine (ATM) company, to enable TMFB customers to use 2,000 Onelink ATMs in 150 cities throughout Pakistan. The agreement was signed by President and CEO of TMFB Nadeem Hussain and CEO of Onelink Khayyam Mahmood Butt on behalf of their respective companies.
MICROCAPITAL STORY: Kenya Women Finance Trust (KWFT) to Transform from Microfinance Institution (MFI) into Commercial Bank
Kenya Women Finance Trust (KWFT) has begun the conversion process into a commercial bank that is expected to be completed by the end of 2008. The conversion follows the footsteps of K-Rep Bank and Equity Bank, former Kenyan microfinance institutions that were transformed into commercial banks in 1999 and 2004, respectively. According to CEO Dr. Jennifer Riria, KWFT hopes to become a “one-stop-shop” financial institution that will offer savings accounts, in addition to loans.
MICROCAPITAL STORY: Microfinance Institution Kenya Women Finance Trust (KWFT) Officially Launches Kinga Ya Jamii, a Last-Expense Insurance Product
The Kenya Women Finance Trust (KWFT) officially launched Kinga Ya Jamii, a last-expense insurance product. Its primary purpose is to enable KWFT’s clients and their families to offset funeral expenses.
MICROFINANCE EVENT: Global Microfinance Investment Congress to Convene in Paris in January
THE GLOBAL MICROFINANCE INVESTMENT CONGRESS
JANUARY 21 – 22, 2008, PARIS
Presented by PlaNet Finance, this conference is the first in a series aimed at microfinance investors. Topics are to include equity and fixed-income investment opportunities, measuring social performance, microfinance institution ratings, valuation, pricing and others. The cost is USD 330. For more information, visit www.microfinance-congress.com or contact Mr. Eike Haas at +33 (0) 1 49 21 26 15 or ehaas@planetfinance.org.
MICROCAPITAL STORY: What Are the Total Global Assets in Microfinance? Leading Sources Weigh In: MIX, Microcredit Summit, MicroBanking Bulletin (MBB), ACCIÓN, Microfinance Gateway, BlueOrchard, UNCDF, Unitus, CGAP
Numerous challenges hinder the spread of accurate information on microfinance. Due to the lack of transparency of many microfinance providers, much information is never publicly disclosed. Much of the information that is reported is obsolete and outdated—often two or more years old. As there is limited and inconsistent regulation of microfinance providers, third party confirmation of data is often not required, and providers have little incentive to verify their own figures. Essentially, there is no standardized system to which all microfinance providers report and from which accurate information can be retrieved. Thus, the task of determining a basic statistic—such as the total amount of assets invested in microfinance worldwide—can prove nearly impossible. Calculating this figure requires a worldwide census of microfinance institutions (MFIs), coops, government banks, credit unions, self-help groups, etc. Needless to say, no such census exists.
PAPER WRAP-UP: Beyond Good Intentions: Measuring the Social Performance of Microfinance Institutions, by Syed Hashemi
Focus Note no. 41, May 2007, by CGAP. 12 pages, available at http://www.cgap.org/portal/site/CGAP/menuitem.da0167f15fefd30167808010591010a0/
Syed Hashemi at CGAP, the Consultative Group to Assist the Poor, has put together this overview of social performance measurements of microfinance institutions (MFIs), outlining the requirements, current methods and need for a common set of indicators. He describes the eight most common current systems and also introduces the Common Reporting Initiative that has been designed by the Social Performance Task Force (founded in May 2005 by the Argidius Foundation, CGAP, and the Ford Foundation) to provide a common set of indicators with which all the systems can work.
NEWS WIRE: Blackstone, Carlyle Eye Microfinance
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.
MICROCAPITAL STORY: Deutsche Bank Places a EUR 60 million (USD 84 million) Securitization of Subordinated Microcredits, the First to be Given an External Credit Rating
Deutsche Bank, a global investment bank based in Germany, has launched “db Microfinance-Invest Nr. 1,” the world’s first externally rated securitization of subordinated microcredits. These subordinated loans will benefit 21 microfinance institutions (MFIs) in developing and emerging market countries.
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.
MICROCAPITAL STORY: ACCION International Gateway Microfinance Infrastructure Fund Invests in Rural Internet Service Provider United Villages
Through its Gateway Microfinance Infrastructure Fund (GMI), ACCION International, a private, nonprofit organization with 35 microfinance institution (MFI) partnerships worldwide, has announced an unspecified investment in United Villages, Inc., a rural Internet Service Provider which provides people in the developing economies a voicemail box, an email address, and Internet access for less than $1 per person.
MICROCAPITAL STORY: Further Extracts from the Microfinance Practice Group Debate on Compartamos IPO åö Malcolm Harper
Over the past 6 weeks we have been keeping you up to date on the ongoing debate over the IPO of Mexican microfinance institution (MFI), Compartamos. This has included extracts from the Yahoo online ‘microfinance practice group’ discussion (click here to sign up), moderated by Mr. Chuck Waterfield. Below we quote from a comment posted by Mr. Malcolm Harper. Mr. Harper is former chairman of BASIX, an Indian MFI (1996-2006), and is founder and editor-in-chief of the ‘Small Business Development Journal’. He is also currently chairman of Micro-Credit Ratings International Ltd (M-CRIL).
PAPER WRAP-UP: “Rating Methodology for Bolivian Microfinance Clients”
Fitch Ratings Criteria Report, Analysts; Jose Castro Valdes, Juan Pablo Gil L, Greg Kabance, and Sam Fox
This paper is a response to growing interest in the securitization of microfinance transactions, and although it specifically addresses this in a Bolivian context, it acts as a useful yardstick for rating methodology elsewhere and provides a comprehensive summary of this process. The authors begin with the ‘rating rationale’ which addresses the approach to rating structured transactions in microfinance, an industry which by its nature means the relationship between a loan originator and borrower is paramount. Because of this it is difficult to remove the risk of the underlying originator from any transaction, so any rating is closely linked to the credit quality of the loan servicer.
Continue reading “PAPER WRAP-UP: “Rating Methodology for Bolivian Microfinance Clients””
Morgan Stanley and BlueOrchard Finance Launches USD 108mm Bond Backed by Microfinance Loans
Morgan Stanley, a New York based investment bank, and BlueOrchard Finance, a Swiss microfinance fund management company, have announced the launch of a USD 108mm bond backed by loans issued to microfinance institutions (MFI’s). The bond will be given a rating by Standard & Poor, a major independent credit ratings agency.