The Reserve Bank of India (RBI), India’s central banking authority, recently announced that it has accepted – with some modifications – the framework of recommendations issued by the Malegam Committee for the country’s microfinance industry.
Search Results for: Microfinance Institutions Bill India
MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Microfinance Blog Examines Role of Transparency in Strengthening the Microfinance Sector
A recent article on the CGAP Microfinance Blog, which is operated by US-based think tank CGAP (Consultative Group to Assist the Poor), examines the outcome of a discussion on information initiatives in strengthening the microfinance industry that was recently held by CGAP and the Microfinance Information Exchange (MIX), a US-based nonprofit. At the event, which was held in Nepal, representatives of microfinance organizations from India, Pakistan, Sri Lanka, Afghanistan, Bangladesh and Nepal discussed the following efforts: 1)Annual state of the sector reports such as the Pakistan Microfinance Network’s (PMN’s) Pakistan Microfinance Review, ACCESS Development’s India: A State of the Sector Report, and rating agency M-CRIL’s Microfinance Analytics Report ; 2)Access mapping such as Microfinance Investment Support Facility for Afghanistan’s (MISFA’s) monthly performance reports, PMN’s Micro WATCH in Pakistan and Sa-Dhan’s Microfinance Map of India; and 3)Interest rate transparency such as the report on India from US-based nonprofit MFTransparency.
MICROCAPITAL BRIEF: Mr Ganesh Sankaran of HDFC Bank Asks, “Can Microfinance Attain Industry Status?”
Mr Ganesh Sankaran, executive vice president of India’s HDFC Bank, argues in a recent article on the Hindu Business Line website that the microfinance industry has reached a bifurcation point wherein its stakeholders must navigate it towards achieving either commercial sustainability or poverty alleviation.
MICROCAPITAL BRIEF: MicroInsurance Centre Launches Microinsurance Learning and Knowledge (MILK) Project with $2m Grant from Bill and Melinda Gates Foundation
The MicroInsurance Centre, a for-profit initiative of the MicroSave technical assistance company, recently announced the launch of the Microinsurance Learning and Knowledge (MILK) Project, supported by a USD 2 million grant from the US-based Bill and Melinda Gates Foundation.
MICROCAPITAL BRIEF: SEED Financial Services, Financial Information Network and Operations Limited (FINO), A Little World Seek Private Equity Funding to Scale Up Business Correspondent Operations in India
Business Standard, an Indian newspaper, has reported that SEED Financial Services, an Indian consulting, planning and implementation agency; Financial Information Network and Operations Limited (FINO), an Indian technology company that seeks to enable financial inclusion; and A Little World, a technology company based in India are seeking private equity funding to scale their business correspondent operations. Business correspondents are individuals or organizations that are permitted to “raise deposits; disburse tiny loans; recover bad loans; sell micro insurance, mutual funds, pension products and other third-party products; and receive and deliver small value remittances” on behalf on banks [2].
MICROCAPITAL BRIEF: India’s Business Standard Reports a Third of Indian Banks’ Loans to Microfinance Institutions (MFIs) in Restructuring, Which Analysts Argue is Inadequate to Solve Sector Issues
The Business Standard, an Indian financial newspaper, recently reported that a third of the loans made by Indian banks’ to microfinance institutions (MFIs) are in the process of being structured, due to the MFIs inability to repay following the turmoil in the sector in the state of Andhra Pradesh that began in late 2010. According to a report by the Malegam Committee, a sub-committee of the Reserve Bank of India, as of March 2010 approximately INR 138 billion (USD 3.06 billion) in loans were outstanding to MFIs from the Small Industries Development Bank of India, a government-owned bank providing credit to medium and large-scale MFIs and other banks. The report also stated that banks hold an additional INR 42 billion (USD 932 million) in securitized paper from MFIs.
MICROCAPITAL BRIEF: Indian Banks Seek Personal Guarantees from Microfinance Institution (MFI) Executives As Condition of Debt Restructuring
Indian banks that have entered negotiations with microfinance institutions (MFIs) regarding restructuring wholesale microfinance debt have reportedly insisted on personal repayment guarantees from MFI directors [1].
MICROCAPITAL BRIEF: Representatives of Cambridge, Care, Center for Global Development, SKS Microfinance Discuss “Does Microfinance Help People Escape Poverty?”
Associate director Ms Madeleine Bunting of British newspaper The Guardian recently facilitated a discussion to address the question of whether microfinance helps reduce poverty with Mr Ha-Joon Chang, Cambridge University economist; Mr Ajaz Khan, microfinance advisor for Swiss nonprofit organization Care International; Mr David Roodman, senior fellow at US-based, nonprofit think tank Center for Global Development; and Mr Vikram Akula, chairperson and founder of Indian microfinance institution (MFI) SKS Microfinance [1].
MICROCAPITAL BRIEF: Indian Microfinance Network Sa-Dhan Introduces Code of Ethics
Sa-Dhan, a microfinance network with 251 member organizations in India, has introduced a code of conduct in an effort to ensure borrowers are treated in an ethical way. The code, which was developed through consultation with microfinance institutions (MFIs), government representatives and a range of other stakeholders, consists of ten components: integrity & ethical behavior, transparency, fair practice, assessing need for financial services, appropriate interaction & collection practices, privacy of client data, governance, client education & financial literacy, competition, and feedback & grievance mechanisms [1]. The code of conduct also outlines the role of policy makers and the steps required for implementation including: the collection of data; analysis; capacity building workshops; enforcement; and integration with policies, training and MFI implementation [2].
MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Integrates CGAP’s Software Listings into MIX Market
Microfinance Information Exchange (MIX), the US-based nonprofit data provider, recently announced that it has integrated information on the software providers used by microfinance institutions (MFIs) into its MIX Market online database.
MICROCAPITAL BRIEF: SKS Microfinance of India Sells $135m in Securitized Loans
SKS Microfinance, an Indian for-profit MFI, recently announced the sale of securitized loans worth INR 6.1 billion (USD 135 million), in an effort to increase liquidity amidst a funding shortage that is one part of the turmoil in the microfinance industry in the Indian state of Andhra Pradesh.
MICROCAPITAL BRIEF: Funding Shortage Continues in Indian State of Andhra Pradesh, Loans Overdue to SKS Microfinance Total $27m
London-based news agency Reuters recently reported that since the October 2010 passage of legislation by the state government of Andhra Pradesh in response to the turmoil in the microfinance sector there, funding still remains an issue for microlenders. This is despite efforts by India’s central bank, the Reserve Bank of India, to ease the liquidity crunch. According to Reuters, the issues of mission drift among for-profit players – putting short-term profits ahead of sustainability – and an uncertain regulatory outlook have contributed to the funding shortage [1]. Reuters also states that domestic lenders exercising extra caution when lending to Indian microfinance institutions (MFIs) further deter foreign investors [1].
MICROCAPITAL BRIEF: Malegam Proposals on Indian Microfinance Likely To Be Ratified on April 1, Bankers Defend MFIs’ Priority Sector Status
On April 1, 2011, the Reserve Bank of India (RBI) is expected to ratify some of the recommendations put forth by the Malegam Committee, headed by central bank director Y H Malegam, to amend the regulation of the Indian microfinance sector [1].
MICROFINANCE PAPER WRAP-UP: Making Insurance Markets Work for the Poor: Microinsurance Policy, Regulation and Supervision – India Case Study; by Sanjay Sinha and Swetan Sagar; Published by CGAP (Consultative Group to Assist the Poor) Working Group on Microinsurance
By Sanjay Sinha and Swetan Sagar; published by CGAP (Consultative Group to Assist the Poor) Working Group on Microinsurance; January 2009; 127 pages; available at http://www.microinsurancenetwork.org/file/8_India_Impact_RSP_2009.pdf
MICROCAPITAL BRIEF: Freedom from Hunger Staff Co-author “Integrating microfinance and health strategies: examining the evidence to inform policy and practice”
The latest edition of Health Policy and Planning, which is published by the Oxford Journals division of Oxford University Press, includes a paper that examines the benefits of integrating microfinance with health protection services and makes recommendations intended to inform policy and program design for expansion of the practice. The paper can be found at http://heapol.oxfordjournals.org/content/early/2011/02/21/heapol.czr014.abstract
MICROCAPITAL BRIEF: Asian Development Bank (ADB) Refuses to Back Loans to Microfinance Institutions (MFIs) in Indian State of Andhra Pradesh, Reportedly Earmarks $75m of $250m Guarantee Fund for Standard Chartered
The Asian Development Bank (ADB), a multilateral finance institution that is based in Manila, recently reported that it will not back microfinance institutions (MFIs) in the Indian state of Andhra Pradesh as part of its risk participation program.
MICROCAPITAL BRIEF: Microfinance Information Exchange (MIX) Confirms Launch of New Fee-Based Features in Mid-2011
The Microfinance Information Exchange (MIX), the US–based nonprofit data provider, recently announced that it will launch new features on a fee basis in mid-2011. MIX previously announced the launch of a pilot effort to allow the public to test -drive the fee-based features, as was covered by MicroCapital.org in June 2010 [1].
MICROCAPITAL BRIEF: Dr Muhammad Yunus Appeals Bangladesh High Court Decision Upholding His Removal as Managing Director of Microfinance Institution (MFI) Grameen Bank
Grameen Bank Founder and Nobel Peace Prize Winner Dr Muhammad Yunus has appealed against the Bangladesh High Court’s recent ruling in favor of an attempt by the Bangladesh Bank (BB), the central bank of Bangladesh, to remove Dr Yunus from his position as managing director of Grameen Bank. [1] [2]. The Grameen Bank is a Bangladeshi microfinance institution (MFI) that manages total assets of USD 1.4 billion.