MICROCAPITAL SPECIAL FEATURE: Survey of the Zambian Microfinance Sector

The microfinance sector in Zambia is currently facing the after effects of default in government funded and privately run microfinance programs. The market suffers from high levels of poverty, a huge HIV/AIDS epidemic, and the planned regulation of microfinance activities by the central bank. The microfinance sector in Zambia is still in its developmental stage.

MICROCAPITAL STORY: Whole Planet Foundation and Silverton Foundation Team with Triodos Bank to Loan $1m to Timorese Microfinance Institution (MFI) Moris Rasik for Increased Micro-lending

Austin-based Whole Planet Foundation and Silverton Foundation recently announced a collaborative commitment of USD 600,000 to microfinance institution (MFI) Moris Rasik of Timor-Leste for rural micro-lending projects. The Democratic Republic of Timor-Leste (East Timor) is the poorest country in Asia. The funding for Moris Rasik will be augmented by an additional USD 400,000 from Triodos Bank of the Netherlands.

MICROCAPITAL STORY: Branchless Banking Could Possibly Transform Microfinance Sector in Malawi

The Consultative Group to Assist the Poor (CGAP) reports that currently in Malawi, approximately 90 percent of the population is unbanked. Though there is large demand for financial services, the Malawian microfinance sector suffers from lack of financial resources, outreach, and sustainability. A very weak physical infrastructure is another huge obstacle.

PAPER WRAP-UP: Benchmarking Azerbaijan Microfinance 2006, Nigar Pirmamedova

Authored by Nigar Pirmamedova, the Chief Accountant and Financial Manager for the Azerbaijan Micro-finance Association (AMFA), a Baku-based institution with 22 member organizations, in partnership with the Microfinance Information eXchange (MIX), released January 2008, nine pages, available at http://www.mixmbb.org/Publications/002-REG/EASTERN%20EUROPE%20AND%20CENTRAL%20ASIA%20(ECA)/04-Azerbaijan%20Benchmarking%20Reports/Azerbaijan%20Benchmarking%20Report%202006.pdf

MICROCAPITAL EVENT: 2008 World Business and Development Awards, for Which Microfinance Institutions (MFIs) are Eligible, Currently Accepting Nominations

WORLD BUSINESS AND DEVELOPMENT AWARDS

SEPTEMBER 24, 2008, NEW YORK

The International Chamber of Commerce (ICC), an institution promoting trade and investment across borders since 1919, announced on April 16th through a press release that the bi-annual World Business and Development Awards (WBDA) are now accepting nominations for the 2008 competition. The awards will recognize private sector institutions which support the United Nations Development Programme (UNDP) Millennium Development Goals (MDGs), one of which is the eradication of extreme poverty, the primary social motive for many microfinance institutions (MFIs).

MICROCAPITAL EVENT: The Inter-American Development Bank (IDB) Multilateral Investment Fund (MIF) and Women’s World Banking (WWB) to Hold Seminar on Microfinance in Buenos Aires

MICROFINANCE: TOWARDS THE INCLUSION OF ALL

APRIL 22, 2008 HOTEL PANAMERICANO, BUENOS AIRES, ARGENTINA

The Inter-American Development Bank’s Multilateral Investment Fund and Women’s World Banking (WWB), a global network of microfinance institutions, will hold a seminar on commercial banks’ entry into microfinance titled “Microfinance: Towards the Inclusion of All,” on April 22 at the Hotel Panamericano in Buenos Aires, Argentina. The seminar will be held in collaboration with the Latin American Federation of Banks, a non-profit institution of 600 financial institutions from 19 countries for the economic development and integration of Latin American countries.

WHO’S WHO IN MICROFINANCE: The Foundation for International Community Assistance (FINCA)

Founded by microfinance pioneer Dr. John Hatch in 1985, The Foundation for International Community Assistance (FINCA) has been active in the global microfinance industry since its first microcredit program in El Salvador for low-income women in 1986. Operating in 21 countries with 2006 total assets of USD 252 million and a stated commitment to serving the poorest of the poor, FINCA relies on its grounding in Hatch’s Village Banking methodology, which dictates that local customers are the most knowledgeable regarding the management of their own assets. The model calls for cooperatives of 30 to 60 people to form around their mutual interest in pooling funds for inter-member loans and other financial services. Cooperatives gain access to additional capital by borrowing from financial institutions as a group, and then on-lending the funds to individuals, collateral-free.

MICROCAPITAL STORY: $10b Islamic Solidarity Fund for Development Programs Approved with Goals to Reduce Illiteracy and Poverty throughout the Muslim World Focused on Microfinance

The Islamic Development Bank (ISD), a multilateral development financing institution founded in 1975 out of Jeddah, Saudi Arabia announced the implementation of a five year plan to eliminate poverty, reduce illiteracy and fight contagious diseases throughout the Muslim world. The Islamic Solidarity Fund for Development, a USD 10 billion fund will fuel the development of two programs; the Vocational Literacy Program for Poverty Alleviation (VOLIP) and the Microfinance Support Program (MFSP). Both programs will target pockets of poverty throughout the 56 member nations of the ISD which include developing nations in Africa, the Middle East, Asia and the Commonwealth of Independent States. The primary use of funds, however, will target the poorest ISD states, 80 percent of which are located in Sub-Sahara Africa.

MICROCAPITAL STORY: A Brief Survey on the Impact of Microfinance on Women Part 3 of a 3-Part Series: Focusing on Women Clients for Financial Sustainability

The United Nations Capital Development Fund (UNCDF) reports that women’s access to microfinance improves overall economic activity in poorer regions, causing economic growth, since women make up 70 percent of the 1.3 billion people living below the poverty line. Access to savings and credit are believed to increase investment and productivity, access to markets and overall income.

MICROCAPITAL STORY: A Brief Survey on the Impact of Microfinance on Women Part 2 of a 3-Part Series: Evidence of Women’s Empowerment

Though there is less quantifiable evidence to justify the effect of microfinance on woman’s human rights, it is widely accepted that giving women access to savings and credit will increase women’s social and political empowerment, and even change traditional gender relationships. These assumptions continue to be evaluated as recent microfinance studies are focusing more and more on women’s empowerment.

MICROCAPITAL STORY: The Federal Executive Council (FEC) of Nigeria Approves $27.2m Loan from the International Fund for Agricultural Development (IFAD) for Rural Microfinance

The Federal Executive Council (FEC) of Nigeria, presided over by President Umaru Musa Yar’Adua, approved a USD 27.2 million loan from the International Fund for Agricultural Development (IFAD), as reported by AllAfrica.com. The loan, along with a USD 400,000 grant from IFAD, will constitute the core financing of IFAD’s Rural Finance Institution-Building Programme (RFIBP), a seven-year plan to strengthen rural microfinance institutions (MFIs) in Nigeria as well as establish increased linkages between MFIs and mainstream financial institutions. As stated in the September 2006 submission from the Executive Board of IFAD to the government of Nigeria, the official recipient of the loan is the Federal Republic of Nigeria and the loan terms are for 40 years, including a grace period of ten years, and a service charge of 0.75 percent per year (page vi). The Federal Ministry for Agriculture and Rural Development will implement the RFIBP (page 10).

WHO’S WHO IN MICROFINANCE: 85 Broads and Janet Hanson

85 Broads is a women’s professional network of over 17,000. In 1997, the network started off as a global community for former and current Goldman Sachs employees, but has since expanded to include females in MBA programs and leading undergraduate universities. A play on Goldman Sachs‘ street address in New York City, the network was founded by Janet Hanson after she left Goldman Sachs to start her own institutional money management company.

PAPER WRAP-UP: Globalization of Microfinance Markets: an Overview and Some Conditions for Success by Dr. Jairo Morales-Nieto

Written by Dr. Jairo Morales-Nieto, Executive Director of local economic development consultants InterAfrica Corporate Ltd, this 10-page discussion on the necessary steps to transition from local to global microfinance markets was published in January 2008. Dr. Morales-Nieto asserts that rigorous filters and conditions must be observed by all players for microfinance to successfully enter into global financial markets. The full-version of the paper is available here.

MICROCAPITAL STORY: Producers Rural Banking Corporation (PRBC) Receives $34m Credit Line for Microfinance Activities in the Philippines

Producers Rural Banking Corporation (PRBC), a Manila-based microfinance institution (MFI) serving the countryside of the island of Luzon, has received a line of credit worth Philippine Peso (PHP) 1.4 billion, or USD 34 million, from both public and private institutions, according to the Philippine Daily Inquirer. These funds will be onlent to individual clients of PRBC. The bank does not report to the MIX Market, the microfinance information clearinghouse, nor do they maintain a Web presence.