by Chinq Yee Chong -

MICROCAPITAL STORY: Microfinance as a solution to unemployment in Yemen

According to the Yemen Times, the Yemeni government admitted that its strategy to reduce unemployment to 12 percent by 2010 was failing in a recent official report by the Yemeni Ministry of Planning and International Cooperation. The percentage of unemployment in Yemen varies from source to source because of a divergence in the methods of calculation used and the lack of accuracy of basic figures such as population, percentage of Yemenis who are of working age and so forth. Official statistics put the figure at no less than 16 percent whilst according to Taher Mujahid Al-Salehi, an economist from the Yemeni Research and Studies Center, an unemployment figure of at least 35 percent is more realistic. The official report attributed the lack of progress in reducing unemployment to the Yemeni economy’s inability to provide new jobs for youth. In addition, the low level of qualification among the national labor force remains a significant obstacle to unemployment reduction in the country. The report suggested a number of ways to improve employment figures including conducting qualitative training programs for the country’s labor force and providing employment offices with the means to more effectively advertise job vacancies.

by Jaclyn Berfond -

MICROFINANCE EVENT: Africa Microfinance Action Forum (AMAF) and Women’s World Banking (WWB) present Diagnostic to Action: Microfinance in Africa Multi-Stakeholder Conference

Event Name: Diagnostic to Action: Microfinance in Africa Multi-Stakeholder Conference

June 4, 2009, Nairobi, Kenya

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

by Goda Thangada -

MICROCAPITAL STORY: Munich Re, Asuransi Wahana Tata (AWT), and GTZ Launch Flood Microinsurance Product in Indonesia

The ‘Alert 1 Manggarai Protection Card’, a microinsurance product which protects against flood, has been jointly launched by Indonesian insurance company Asuransi Wahana Tata (AWT) , German reinsurer Munich Re and the German government’s Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH. AWT is Munich Re’s local partner in Indonesia. A feasibility study has been conducted by Munich Re and GTZ and the product will now be available in 23 sub-districts in Jakarta. The product is literally a small card costingUSD 4.70 and guaranteeing a single payment of USD 23.90 . ‘Alert 1′ is the designation given to a flood if water rises to a minimum of 950 cm at Jakarta’ Manggarai Water Gate. The product was principally designed by Munich Re although most of the logistics, including marketing and sales, will be handled by AWT. Munich Re will act as the re-insurer of the product. GTZ conducted a great deal of background research, including household surveys in the 23 sub-districts and focus groups, and conducted a microinsurance awareness campaign consisting of training material and a brochure. The Promotion of Small Financial Institutions program, supported by GTZ in Indonesia, will be responsible for supporting the product in the field. AWT’s President Commissioner, Rudy Wanandi, comments, “With the right partners, a defined product and through our wide network within the region we are able to reach people and explain our innovative solutions. It will raise the insurance awareness of society and bring more economic stability and social security to people who live in exposed regions.” Currently, 3 percent of poor people have access to insurance products in the world’s 100 poorest countries.

by Goda Thangada -

MICROCAPITAL STORY: Islamic Development Bank (IDB) Grants $10m Loan to the Development and Employment Fund (DEF) of Jordan

The Islamic Development Bank (IDB) has extended a USD 10 million soft loan to the Development and Employment Fund  (DEF) in Jordan to develop microfinance in the country. The IDB consists of 56 countries that are all members of the Organization of the Islamic Conference and contribute to the bank’s capital.  In addition to facilitating trade among member countries, the IDB grants loans and provides funding for social and economic development projects in member countries. Because the financial operations of the IDB are intended to be consistent with Shariah law, the IDB also provides technical assistance and training in Shariah banking practices. For more information on the how Shariah law affects banking practices in general and microfinance in particular, see this MicroCapital Paper Wrap-Up. The IDB was founded at the Conference of Finance Ministers of Muslim Countries in Jeddah in December 1973 and commenced operations in October 1975. The DEF is a public government fund that commenced operations in 1991 with the objective of promoting independent employment and developing the small business sector. Initially under the government’s Industrial Development Bank, the DEF has been independently managed since 1992.

by Goda Thangada -

MICROCAPITAL STORY: Venezuelan Government Bank BANDES To Open Branch in Angola

Jesus Alberto Garcia, Venezuelan ambassador to Angola, stated in an interview with Radio Nacional de Angola that Banco de Desarrollo Económico y Social de Venezuela (BANDES), the state development bank of Venezuela, will open a branch in Angola. He added, “This is one of the main things President Chavez wants to do with Africa.” Branches of BANDES outside of Latin America and the Caribbean include Syria and the Republic of Mali. Mr. Garcia expects that the Angola branch may be open by next year. In 2005, BANDES became an independently managed institution under the supervision of the government’s Ministry of the People’s Empowerment in Economics and Finance and is currently 75 percent government owned. BANDES provides microcredit and funds development projects in Venezuela as well as abroad.

by Jaclyn Berfond -

MICROCAPITAL STORY: Yemen’s Social Fund for Development (SFD) to Serve 100,000 Entrepreneurs Through Microfinance Programs

The Social Fund for Development (SFD), an agency established by the government of Yemen to implement social and economic development programs, announced a strategic plan to reach 100,000 micro and small entrepreneurs (MSEs) by 2012. The SFD is supporting microfinance programs in Yemen in the belief that MSEs will help to alleviate poverty and reduce unemployment in the country.

by Ryan Hogarth -

MICROCAPITAL STORY: Book Release: “Freedom From Want” by Ian Smillie Pays Homage to the Bangladesh Rural Advancement Committee (BRAC)

“Unlike the Grameen Bank, BRAC (Bangladesh Rural Advancement Committee) is not well known outside Bangladesh, but that will change, because BRAC is undoubtedly the largest and most variegated social experiment in the developing world,” writes Ian Smillie (p1), the author of recently published “Freedom From Want” (Kumarian Press, 2009). The 283-page book is a tribute to the gigantic Bangladeshi nongovernmental microfinance and development organization, which today operates in Afghanistan, Pakistan, Sri Lanka, Tanzania, Uganda, the Sudan, Sierra Leone, and Liberia. Upon a backdrop of the history of Bangladesh, “Freedom From Want” traces the growth of BRAC from its origins in 1972 as a small social relief project for victims of the 1970 cyclone and 1972 Liberation War. It provides a biography of BRAC Founder and Chairperson, Fazle Hasan Abed. And, it documents the launch of BRAC’s various development initiatives and its expansion into Asia and Africa as it grew to become the multinational, multifaceted development institution that it is today.

by Bharathi Ram -

WHO’S WHO IN MICROFINANCE: Fazle Hasan Abed, Founder of BRAC (the Bangladesh Rural Advancement Committee)

Fazle Hasan Abed is the founder and chairperson of BRAC (formerly the Bangladesh Rural Advancement Committee), the Bangladesh based development organization dedicated to poverty alleviation and rural empowerment. BRAC was founded in February 1972 an almost entirely donor-funded, small-scale relief and rehabilitation project to aid post-Liberation War Bangladesh and has now expanded into a private development organization dedicated to poverty alleviation and empowerment of the poor, serving an estimated 100 million Bangladeshis with presence in all 64 districts of Bangladesh.

by Laura Anderson -

MICROCAPITAL STORY: Microfinance Loans Help Iraqi Business

According to a report in the Financial Times, fledgling microfinance projects are helping to revive the Iraqi economy after years of public sector dominance, a decade of sanctions, and six years of violence.  The US, and specifically its military, is actively involved in these microfinance schemes as part of its war on terrorism. The projects typically involve loans of a few thousand dollars given to people with between one and three employees.  By the end of January 2009, the US had made 41,728 loans, totaling USD 59.7 million. 

by Bharathi Ram -

WHO’S WHO IN MICROFINANCE: Ela Ramesh Bhatt, Founder of the Self-Employed Women’s Association (SEWA) in India

Dr. Ela Ramesh Bhatt is the founder of the Self-Employed Women’s Association (SEWA), a development organization based in India dedicated to the economic empowerment of the poorest and most oppressed women in India. A lawyer by training, Dr. Bhatt is widely respected among the international labor, cooperative, women, and micro-finance movements and is also one of the founders of Women’s World Banking, the New York based global network of microfinance providers and banks dedicated to ‘expanding the economic assets, participation and power of poor women’ by providing them access to finance, knowledge and markets.

by Ryan Hogarth -

PAPER WRAP-UP: “Community-Managed Loan Funds: Which Ones Work?” by Jessica Murray and Richard Rosenberg

Written by Jessica Murray and Richard Rosenberg, published in May 2006 as Focus Note Number 36 by the Consultative Group to Assist the Poor (CGAP), 15 pages, full text available at: http://www.cgap.org/gm/document-1.9.2577/FocusNote_36.pdf

by Laura Anderson -

MICROCAPITAL STORY: SKS Microfinance, Madura Micro Finance and Grama Vidiyal to Offer Home Loans in India

According to a report in The Times of India, three Indian MFIs will begin offering home loan products to the rural poor.  SKS Microfinance, Madura Micro Finance and Grama Vidiyal all plan to start rolling out home loans and home improvement loans to borrowers with good repayment records.  According to Tara Thiagarajan, Chairman of Madura Micro Finance, the low cost construction model used by the rural poor has prompted the MFIs to offer the loans.  Most people in Indian villages own plots and construct their own homes using indigenous materials.

by Zoran Stanisljevic -

MICROFINANCE EVENT: 4th Annual African Microfinance Conference: Affordable Access to Finance for Low-income African Entrepreneurs to be held in Ouagadougou, Burkina Faso, in the Sub-Saharan Africa region from July 7-10th, 2009

Leonce Kone, Committee Chairman for the Fourth Annual African Microfinance Conference in Ouagadougou

July 7-10, 2009, Ouagadougou, Burkina Faso (Sub-Saharan Africa)

by Bharathi Ram -

MICROCAPITAL STORY: Economic Downturn Forces the Cambodian Microfinance Sector to Scale down Recruitment Plans

The rate of job creation and recruitment in the Cambodian microfinance sector is expected to drop sharply this year, according to microfinance industry experts in the region. A press release on the Cambodian based newspaper Phnom Penh Post states that the current global crisis has forced the fast-expanding microfinance institutions (MFIs) in the region to scale down their recruitment plans. The release quotes Mr. Bun Mony, Chairman of the Cambodian MFI Sathapana Limited and member of the Cambodian Microfinance Association (CMA), as saying that the sector-wide employment growth in the region is expected to be only around 5 to 10 percent this year. As per available estimates, this year’s growth forecast is far lower than the past few years which had registered growths of nearly 30 percent.

by Bharathi Ram -

MICROCAPITAL STORY: International Finance Corporation (IFC) Provides Loan worth EUR 7 million to Microcredit Foundation EKI (MCF EKI) to Expand Financial Services in Bosnia and Herzegovina

The International Finance Corporation (IFC), the private sector lending arm of the World Bank, is providing a loan worth EUR 7 million to the Microcredit Foundation EKI (MCF EKI), a microfinance institution (MFI) based in Bosnia and Herzegovina (BiH). According to a press release on the IFC website, this loan is issued to enable MCF EKI to expand its outreach to micro-entrepreneurs in the rural areas of the BiH region and will be used in part to finance micro-entrepreneurs and the rest to finance home-improvement projects in several of the region’s war ravaged areas. In this regard, EKI’s micro-lending program, which targets micro and small enterprises in the region, aims to utilize IFC’s support to disburse 4,200 new loans to microentrepreuners by the end of 2011. Under its Housing Refurbishment Loan Program, EKI will use up to EUR 1 million of IFC’s loan to provide loans for repair and improvement of several houses in the BiH  region that were badly damaged by the Bosnian Civil War that took place between 1992 and 1995.