by Lori Curtis -

MICROCAPITAL STORY: Cambodia Microfinance Association Lowers Microfinance Growth Targets Due to Effects of Global Credit Crunch

Microfinance institutions in Cambodia are experiencing reduced lending capacity due to market turbulence in the United States and the European Union. The Cambodia Microfinance Association had set a target for reaching customers, however lower foreign investments will result in a 20 percent reduction in their anticipated fulfilment of customer credit needs.

by the MicroCapital Team -

GUEST EDITORIAL: Global Credit Crunch Crushes Socially Responsible Investment in Microfinance?

A recent spate of articles here and in other media has related the ongoing financial crisis in the credit markets to the funding and credit availability for microfinance institutions (MFIs). Articles appearing in the MicroCapital Monitor focus on the potential for the global financial crisis to adversely effect microbank lending. Former President Bill Clinton’s recent admonition to world credit markets to continue support of the microfinance sector is a strong voice for continued commitment in what could become a bear microfinance credit crunch. A jump of 150 to 200 basis points in the last quarter bodes ill for the sector.

by Jeffrey Erfe -

MICROCAPITAL STORY: Bill Clinton Extols Microfinance Amid Global Credit Crisis at 2008 Clinton Global Initiative Summit

Bill Clinton praised microfinance in his closing speech at the 2008 summit for the Clinton Global Initiative (CGI), the global development summit and brainchild of the former U.S. president.  As one of the summit’s concluding speakers, Clinton exhorted investors to consider the poor of developing nations as viable investment alternatives to today’s turbulent markets.  He lauded international microfinance investors as “smart people” earning money the “old-fashioned way” in a “real economy based on real people doing real things for a real rate of return.”  Amid a global credit crisis that threatens to dry up anti-poverty aid, Clinton cautioned investors and business leaders from “looking inward.” 

by Diana Yang -

MICROFINANCE EVENT: USAID Online Discussion on Economic Recovery Standards in Crisis Areas

MICROLINKS HOSTS ONLINE DISCUSSION, ECONOMIC RECOVERY STANDARDS
SEPTEMBER 23-35

The microLINKS Speaker’s Corner will host an online discussion called “Economic Recovery Standards”. The discussion will be around the Economic Recovery Standards, widely recognized among the international disaster and crisis response community for providing guidance on the minimum quality of actions expected in humanitarian responses in crisis-affected areas will be hosted. The forum provides the opportunity for participants to explore issues related to economic recovery interventions after a crisis and have their opinions and input directly affect the Standards.

Topics to be covered will include:

Day 1 – September 23: Cross-cutting and overall standards
Day 2 – September 24: Financial services and assets programming
Day 3 – September 25: Employment Creation and enterprise development

To register or to learn more about this discussion, visit the event website here.

by Scott Everett -

MICROCAPITAL STORY: In Asia, Newly defined Poverty Lines Reveal Higher Numbers of People in Poverty, Risks To Millennium Development Goals And Growing Microfinance Opportunities

The World Bank and Asian Development Bank (ADB) both released studies recently that offer new definitions of international poverty. The original “$1-a-day Poverty Line” is a global poverty line for absolute poverty that was set by the World Bank in 1990, and is adjusted for various purchasing power parities (PPP). PPPs are conversion factors that ensure a common purchasing power over a given set of goods and services. People living at or below these poverty lines are said to be in extreme poverty.

by Ryan Benson -

MICROCAPITAL STORY: United Nations International Fund for Agricultural Development (IFAD) Loans $27m to Support Nigerian Microfinance Sector Development

The United Nations’ International Fund for Agricultural Development will provide USD $27 million in debt capital to support the expansion of microlending activity in Nigeria, with the goal of creating a sustainable rural financial system in the West African nation. Co-financed with nonprofit Ford Foundation, the financing aims to build ties between Nigerian MFIs and formal financial institutions in twelve Nigerian provinces. While Nigerian MFIs currently provide services to a variety of demographics, IFAD hopes that the capital infusion will particularly improve access to financial services to women, young people, and other marginalized groups. It is unclear whether IFAD’s financial assistance will be allocated to a Nigerian government agency such as central bank, or if it will be allocated directly to MFIs operating in-country.

by Ryan Benson -

MICROCAPITAL STORY: In Bangladesh, Rising Food Prices Affecting Loan Repayments in Microfinance Programs

Originally reported by Bangladesh’s The Financial Express, it appears that an increasing number of MFI clients in Bangladesh are not utilizing disbursed microloans to support planned microenterprises, instead using loans to cover the rising cost of food. A product of the 2008 world food shortage, in many countries rapid increases in food prices have not been accompanied by a comparable increase in wages, causing MFI clients to fill their budgetary gaps with microloan funds.

by Greg Casey -

MICROCAPITAL STORY: Nobel Laureate Muhammad Yunus Speaks Out Against For-Profit Microfinance from Asia-Pacific Microcredit Summit

Muhammad Yunus, the microfinance pioneer and winner of the Nobel Prize for founding the Grameen Bank, spoke out against the growing trend of commercial microfinance. In an interview with CNNMoney.Com, Yunus chastised those involved with for-profit microfinance by saying that “poor people should not be considered an opportunity to make yourself rich.” These remarks come at the start of the Asia-Pacific Regional Microcredit Summit 2008 in Bali Indonesia.

by Sarah Knapp -

WHO’S WHO IN MICROFINANCE: Anne Hastings of Haiti’s Fondasyon Kole Zepol (Fonkoze)

Anne Hastings is the Executive Director of Fondasyon Kole Zepol (Fonkoze), Haiti’s largest microfinance institution (MFI). Fonkoze or “Haiti’s Alternative Bank For the Organized Poor” has 34 nation-wide branches with total assets of USD 6.7 million as of December 31st 2007. According to its MIX Market Profile, at year end 2007, Fonkoze had 20,916 active borrowers and 30,509 active savers. Fonkoze also offers microinsurance with Alternative Insurance Company (AIC), a Haitian insurance company.

by Ryan Benson -

MICROCAPITAL STORY: Pakistani Government Agency PPAF (Pakistan Poverty Alleviation Fund) Launches USD $45 million PRISM (Program for Increasing Sustainable Microfinance)

Pakistan’s PPAF (Pakistan Poverty Alleviation Fund), a government program to support poverty alleviation, recently launched PRISM (Programme for Increasing Sustainable Microfinance). PRISM’s main objective is to assist Pakistani microfinance institutions that largely rely on donor funding in forging new partnerships with commercial funders. The program’s establishment represents an acknowledgement by policy makers that Pakistan’s microfinance institutions have proven themselves to be commercially viable enterprises and worthy targets of commercial investment in lieu of grant support. The PRISM program has an operating budget of USD $45 million, and involves partnerships with 72 organizations working in 33,000 villages. In addition to government support, PRISM was financed by a USD 35 million loan from IFAD (International Fund for Agricultural Development).