IFMR Capital, an affiliate of the Indian nonprofit Institute for Financial Management and Research (IFMR), a private trust that aims to provide Indian enterprises with access to financial services, recently listed a securitized debt instrument on the Bombay Stock Exchange that pooled loan assets from eight microfinance institutions (MFIs).
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MICROFINANCE PAPER WRAP-UP: “Securing the Silent: Microinsurance in India: The Story So Far” by Premasis Mukherjee, Rosalind Piggot and Sunil Bhat; published by MicroSave
By Premasis Mukherjee, Rosalind Piggot and Sunil Bhat; published by MicroSave; December 2012; 63 pages; available at: http://www.microsave.org/sites/default/files/research_papers/Securing_the_Silent_MI_Report.pdf
This paper examines the microinsurance industry in India, specifically the industry for life and health microinsurance.
MICROCAPITAL BRIEF: India’s Insurance Regulatory and Development Authority (IRDA) Relaxes Paperwork Requirements for Microinsurance Customers
Out of concern that the policy has hindered financial inclusion, the Insurance Regulatory and Development Authority (IRDA), India’s insurance regulator, will no longer require written confirmation from banks as proof of residence from those seeking to purchase microinsurance products.
MICROCAPITAL BRIEF: Microfinance Institution Ujjivan of India Reduces Interest Rates to 25% for New Group Loans, 24% for Returning Customers
Ujjivan Financial Services, a microfinance institution (MFI) based in India, recently decreased the interest rates it charges on loans to poor borrowers by one to two percentage points. The effective interest rate for new group loans is now 25 percent per year, down from 26 percent. The rate for loans to previous group and individual customers is now 24 percent per year, reduced from 26 percent. The rate for first-time loans to individuals was not disclosed.
MICROCAPITAL BRIEF: Small Industries Development Bank of India (SIDBI) Among Banks Requiring Third-Party Assessment of Codes of Conduct from Microfinance Institutions (MFIs) Seeking Wholesale Loans
A group of lenders headed by the Small Industries Development Bank of India (SIDBI), a state-owned bank, have made it compulsory for microfinance institutions (MFIs) in the country to undergo third-party assessments of their codes of conduct in order to receive loans.
MICROCAPITAL BRIEF: After Reserve Bank of India Caps Microfinance Institution Interest Rates at 26%, Investors Eye Non-Banking Financial Companies
Microfinance investors reportedly are seeking to invest in India’s non-banking financial companies (NBFCs) after the Reserve Bank of India (RBI) established a new regulation framework in 2011 that included an interest rate cap of 26 percent on loans disbursed by microfinance institutions (MFIs).
MICROCAPITAL BRIEF: Reserve Bank of India Projected to Issue Banking Licenses to L&T Finance Holding, Shriram Group, Mahindra & Mahindra Financial Services
Antique Stock Broking Ltd., an India-based financial services conglomerate, reportedly has projected that L&T Finance Holding, Shriram Group and Mahindra & Mahindra Financial Services are the three non-banking financial companies (NBFCs) most likely to receive banking licenses shortly from the Reserve Bank of India (RBI).
MICROCAPITAL BRIEF: Accion’s Frontier Investments, Saama Capital Invest $4m in Equity in Shubham Housing Development Finance of India
Frontier Investments Group, an investment vehicle of the US-based nonprofit Accion, recently announced that it, along with Saama Capital, a venture focused investment firm in India, invested a total of USD 4 million in equity in India’s Shubham Housing Development Finance Company.
MICROCAPITAL BRIEF: SKS Microfinance of India Completes $10m Securitization, Stock Reaches 52-Week High
SKS Microfinance, an Indian microfinance institution (MFI), reportedly has completed a securitization deal worth INR 544 million (USD 10 million).
MICROCAPITAL BRIEF: Reserve Bank of India: Islamic Banking Not Workable Under Current Law, Financial Literacy Needs Boost
At a recent event in Kochi, India, Reserve Bank of India (RBI) Governor Duvvuri Subbarao reportedly ruled out the implementation of Islamic banking in the country at this time due to legal issues that would require a new law in order to allow the practice.
MICROCAPITAL BRIEF: Entrepreneurs Amit Patni, Arihant Patni Acquire Stake in Grameen Capital India
Grameen Capital India (GCI), an investor in microfinance institutions and other social enterprises, recently announced the acquisition of a 43 percent stake in the company by Indian technology entrepreneurs Amit and Arihant Patni.
MICROCAPITAL BRIEF: National Bank for Agriculture and Rural Development (NABARD): Non-Performing Assets (NPAs) Owed by Self-Help Groups (SHGs) in India Rise 50% to $400m
The National Bank for Agriculture and Rural Development (NABARD), an institution of the Indian government, released a report entitled “Status of Microfinance in India, 2011-12” that indicates that non-performing assets (NPAs) owed by self-help groups (SHGs) in the country were increasing and that lenders were cutting back their exposure to SHGs as a result. SHGs are village based financial intermediaries that facilitate microcredit and saving.
MICROCAPITAL BRIEF: SKS Microfinance of India Announces $36m Securitization Under Amended Reserve Bank of India Guidelines
SKS Microfinance, an Indian microfinance institution (MFI), reportedly has announced its first microfinance securitization of INR 2 billion (USD 36.4 million) since the Reserve Bank of India (RBI), the country’s central banking authority, revised the guidelines for securitizations issued by non-banking finance companies (NBFCs) in August 2012.
MICROCAPITAL BRIEF: Reserve Bank of India Asks Rural Banks to Open 25 Percent of New Branches in Unbanked Areas
The Reserve Bank of India (RBI), the country’s financial regulatory authority, recently tasked regional rural banks (RRBs) to ensure that at least one-quarter of their proposed branches are sited in unbanked parts of the country.
MICROCAPITAL BRIEF: Private Equity Firms Investing in Indian Microfinance Institutions (MFIs) After Two-Year Hiatus
Private equity firms are beginning to invest in Indian microfinance institutions (MFIs) that offer products such as insurance, pension plans and chit funds in order to diversify their portfolios. It is reported that private equity firms have invested INR 7.5 billion (USD 138 million) in Indian MFIs this year, as compared to INR 2.5 billion (USD 46 million) invested in 2011.
MICROCAPITAL BRIEF: International Finance Corporation (IFC) Commits Technical Assistance To Indian Credit Bureau, High Mark
The International Finance Corporation (IFC), the private investment arm of the World Bank Group, recently agreed to provide technical assistance to High Mark, an Indian credit bureau, in an effort to encourage microfinance lenders in India to use credit bureaus in assessing the repayment capacity of borrowers.
MICROCAPITAL BRIEF: Lack of Law and Order Causes Microfinance Institution (MFI) Ujjivan of India to Put Lending Operations on Hold in Parts of Bihar
Ujjivan Financial Services, a Bangalore-based microfinance institution (MFI), recently put its lending operations on hold in the districts Vaishali and Muzaffarpur in the Indian state of Bihar after an October attack on its customer relations officer, Achchhe Lal Prasad.
MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) Share, Asmitha of India, Again Looking to Merge
Share Microfin Limited and Asmitha Microfin Limited, two microfinance institutions (MFIs) based in Hyderabad, India, reportedly have rekindled efforts to execute a merger.