by Goda Thangada -

MICROCAPITAL PAPER WRAP-UP: Migrant Remittances: A Development Challenge, Published by the African Development Bank Group

“Migrant Remittances: A Development Challenge”, Published by the African Development Bank Group, 2009. Available at: http://collab2.cgap.org//gm/document-1.9.34957/Migrant%20Remittances,%20a%20Development%20Challenge.pdf

This 85 page report presents the results of the African Development Bank (AfDB)’s 2007 extensive study on migrant remittances. The study involved a survey of emigrants from Morocco, Senegal, Mali, and the Comoros as well as beneficiaries in the countries. The African countries, while very different from one another, all have a French colonial background while the emigrants surveyed lived in France, Italy, and Spain. The study examines the use of remittances and preferences for various transfer mechanisms to ultimately present various challenges in dealing with remittances as well as a number of suggestions for how to improve the method and use of remittances. Among the suggestions is the recommendation that microfinance institutions (MFIs) expand or mobile banking services be offered, so that beneficiaries of remittances might readily access the transferred money through a formal mechanism. Remittances constitute a great volume of cash inflow to the countries surveyed, totaling between 9 percent of GDP in Morocco and 24 percent in the Comoros, or between 80 and 750 percent of the countries’ official development assistance (ODA).

by Uyen Tran -

MICROCAPITAL STORY: Grameen Foundation’s Microfinance Open Source Technology, Mifos, Wins Sun Microsystem’s 2009 Duke’s Choice Award

Grameen Foundation, a global non-profit organization based in Washington, DC, was awarded the 2009 Duke’s Choice Award from Sun Microsystems for its open source technology, Mifos. Mifos won under the category, “Best Java Technology for the Open Source Community.” An open source software program means the source code is accessible and the software is freely redistributable. Grameen Foundation was established in 1986 and has assets totaling USD 25.0 million as stated in its 2008 annual report. Sun Microsystems is a technology company founded in 1982 and based in Silicon Valley, California with assets worth USD 14.3 billion according to its 2008 annual report. Grameen states that this is the first Duke’s Choice Award for both Grameen Foundation and a microfinance-focused technology initiative.

by Chinq Yee Chong -

MICROCAPITAL STORY: Over-Indebtedness And Borrower Delinquency In The Indian State Of Karnataka – A Blogger’s Observations

In a recent entry posted by Mr. Siddharta Chowdri, ACCION International Country Manager for India, on David Roodman’s Microfinance Open Book Blog, it was pointed out that borrower delinquency has become a problem faced by all MFIs in the Indian state of Karnataka. According to the Mr. Chowdri, microfinance clients in the state are borrowing from as many as 6 MFIs and many local money lenders. Many existing MFI’s in the area do not have the systems to track and monitor how much debt their clients are incurring as a result of loans from other MFIs. A good number of clients borrow excessively and exceed their capacity to repay their multiple loans on a timely basis. As a consequence, some of these clients turn to local leaders with complaints about MFIs and their inability to repay their debts. To add to the problem, a number of local leaders have instructed certain MFIs to cease operations and have informed borrowers via the local media and through word of mouth that they are being exploited. There is some suggestion that the actions of some local leaders in this regard may be politically motivated.

by Chinq Yee Chong -

MICROCAPITAL STORY: The Role Of Rural Microfinance In Improving Food Security – Experiences of the Agricultural Credit Corporation in Jordan

In Omar Omeidat’s report in the Jordan Times on a regional conference in Amman on agricultural banks and rural microfinance, HRH Princess Basma was reported to have highlighted the importance of funding for rural projects, particularly in view of the global economic crisis, which she said has had a negative impact on food security programmes. The Princess indicated that due to local and global economic circumstances and a shortage of water resources, the agricultural sector in Jordan faces several challenges, which have led to a drop in the sector’s contribution to the gross domestic product (GDP) and work force. Jordan’s water crisis was the focus of a recent article on the AlertNet-Reuters network, which disseminates information about humanitarian disasters and emergencies across the globe. The IRIN portal, which provides information on humanitarian affairs under the auspices of the United Nations Office for the Coordination of Humanitarian Affairs, recently reported that whilst the water and related food crisis in Jordan is not yet critical, a range of measures and projects need to be implemented as soon as possible to contain the problem.

by the MicroCapital Team -

MEET THE BOSS: Jean-Pierre Klumpp of BlueOrchard Finance

Jean-Pierre Klumpp has been Chief Executive Officer of BlueOrchard Finance since 2008.

MicroCapital: Would you please tell us about the history of BlueOrchard?

JPK: The Dexia Micro-Credit Fund (DMCF), which we manage, was launched in 1998 by Dexia Asset Management. Jean-Philippe de Schrevel, at the time a financial analyst fully dedicated to this fund, founded BlueOrchard Finance in 2001 with two partners and took over the management of the microfinance portfolio for the DMCF. With just a little more than USD 10 million under management at the beginning, BlueOrchard started an impressive ascent to about USD 1 billion assets and eight microfinance investment vehicles under management today.

by Sally Levy -

MICROFINANCE EVENT: The Potential and Limitations of Index-based Weather Insurance: Mali and Peru – a Microfinance Learning and Innovation Seminar from the US Agency for International Development (USAID), June 24th 2009

Event Name: The Potential and Limitations of Index-based Weather Insurance: Mali and Peru

Event Description: This session will discuss the potential and limitations of index-based weather insurance in Mali and Peru.

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

Cost: Free. Seating is limited so reserve a seat or participate remotely via webinar or phone.

Summary of Event:  The case of Peru will be examined as index-based weather insurance has been introduced here. Pre-feasibility work in Mali will also be presented in order to understand whether index-based weather insurance has potential here.  

by Jaclyn Berfond -

MICROCAPITAL STORY: CGAP, Dell Foundation, Ford Foundation and MIX Market Announce New Social Performance Reporting Award Winners AMK, FINCA Peru, Prisma Peru and Asasah

The winners of a new Social Performance Reporting Award were announced at the Annual Social Performance Task Force Meeting in Madrid, Spain. AMK in Cambodia, FINCA Peru, and Prisma Peru received the Gold Award, and Asasah from Pakistan received the Silver Award.

by Zoran Stanisljevic -

MICROFINANCE EVENT: Fundamentals and Methodologies of Microfinance Training offered by Social Enterprise Development Partnerships, Inc. (SEDPI)

Fundamentals and Methodologies of Microfinance Training, September 14-16, 2009, at Tacloban City, Philippines, presented by the Social Enterprise Development Partnerships, Inc. (SEDPI) and sponsored by the Social Enterprise Development Partnerships, Inc. (SEDPI) and Ateneo de Manila University.

 September 14-16, 2009, at Tacloban City, Philippines.

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

Costs: Foreign nationals: USD 200 dollars; Filipinos: PhP 3,500 (Approximately USD 75 dollars)

by David Satterthwaite -

Words of Jonathan Lewis of MicroCredit Enterprises at Stanford University “California Microfinance 2009” Conference

Microfinance: Markets & Missions
Jonathan C. Lewis
Chief Executive Officer/Founder
MicroCredit Enterprises
California Microfinance 2009
May 28, 2009
Stanford University
Thank you for inviting me to this important assembly of change agents. Whether
engaged in domestic micro-enterprise or international microfinance, we are kindred
We in this room know that creating sustainable economic development requires toughminded,
hard work. I admire your commitment, and I am proud to be in your company.

From the inner cities of America to the remote villages of Africa, we know the current economic slump is going to seriously hurt the poor, undermine nonprofit social safety nets, and reduce the social finance funding on which so many depend.

by Laura Anderson -

MICROCAPITAL STORY: State Bank of Pakistan Directs Shareholders of Microfinance Institutions to Deposit Their Shares in Blocked Accounts of the Central Depository Company of Pakistan

The State Bank of Pakistan (SBP) has recently issued a circular that requires shareholders of microfinance institutions (MFIs) to deposit their holdings in blocked accounts of the Central Depository Company (CDC) of Pakistan.  Prior written approval is required before withdrawing the shares from the CDC, and the cost of opening and operating the blocked accounts will be borne by the shareholders.

by Zoran Stanisljevic -

MICROFINANCE EVENT: Second Annual Microfinance Investment Summit, October 6-7, 2009, London, United Kingdom, Sponsored by Incofin

Microfinance Event: Second Annual Microfinance Investment Summit, October 6-7, 2009, London United Kingdom, Sponsored by Incofin

Second Annual Microfinance Investment Summit, October 6-7, 2009, London, United Kingdom, Sponsored by Incofin

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

by Laura Anderson -

MICROCAPITAL PAPER WRAP-UP: Inclusive Finance: The State of Microfinance Sector in ECA (Europe and Central Asia), 2008 Edition

Written by Justyna Pytkowska, Anne-Sophie Houyet, and Aneta Mach for the Microfinance Centre for Central and Eastern Europe and the New Independent States, 105 pages, available at: http://www.mfc.org.pl/index.php?section=NET&page=Other 

This report covers several aspects of finance in the Central and Eastern Europe (CEE) and New Independent States (NIS) region including access to and use of financial services, the potential for micro-insurance, the supply of microfinance services, and the social performance of NGOs and non-bank financial institutions.

by Sally Levy -

MICROFINANCE PAPER WRAP-UP: Bringing Finance to Pakistan’s Poor: A Study on Access to Finance for the Underserved and Small Enterprises

Written by Tatiana Nenova, Cecile Thioro Niang and Anjum Ahmad this report by the World Bank, released May 2009, 187 pages, available at: http://go.worldbank.org/0KKMYAT130

This World Bank report measures and describes the current state of formal and informal financial services in Pakistan for underserved populations and enterprises. Currently 14 percent of Pakistanis use savings, credit, insurance, payments and remittance services from the formal financial system. This is compared to India, Bangladesh and Sri Lanka where 48 percent, 32 percent and 59 percent respectively have access to formal financial services. In addition about 36 percent of Pakistanis use moneylenders, committees, family and friends. The State Bank of Pakistan (SBP), which regulates the banking sector, has grown over the past few years yet it has not met demand. Further details about the market and players in Pakistan are found in Chapter 1.  

by Zoran Stanisljevic -

MICROCAPITAL STORY: The International Finance Corporation (IFC) to invest $ 7.4 million (16.4 percent equity stake) in Microfinance Institution Caja Nuestra Gente of Peru

IFC, a member of the World Bank Group, has announced that it will invest USD 7.4 million (a 16.4 percent participation/stake) in Microlender Caja Nuestra Gente, a Microfinance Institution serving 170,000 clients microlending in Peru.  The IFC investment is also aimed to promote the growth and expansion of the Fundación BBVA para las Microfinanzas (owner of microlender, Caja Nuestra Gente) in Peru and Peruvian rural geographies.  The IFC provides investments and advisory services to build the private sector in developing countries.   Terms of the IFC’s investment are not provided.  According to the IFC, Caja Nuestra Gente loan portfolio is currently at USD 146 million (average loan of USD 1,506 dollars) and presently serves 170,000 borrowers from low-income economies.  Caja Nuestra Gente’s largest funder is Fundación BBVA para las Microfinanzas.

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 Laura Anderson -

MICROCAPITAL STORY: 85 Percent of Microfinance Institutions (MFIs) and 61 Percent of Microfinance Investors Say MFIs Should Offer More than Financial Services According to Microfinance Insights Survey

A new survey of 150 microfinance institutions and investors conducted by Microfinance Insights, an international print magazine published by Intellecap, shows that 85 percent of microfinance institutions (MFIs) and 61 Percent of microfinance investors say MFIs should offer more than financial services.  Of the MFIs polled, 79 percent offer “products and services that are consciously seeking to create social impact beyond simple financial inclusion,” including 63 percent that offer community development, 60 percent that seek inclusion of minorities, and 53 percent that offer better employment and labor conditions.  Over 83 percent of the MFIs polled said their primary goal was poverty alleviation and 78 percent stated their main objective was women’s empowerment.  Complete survey results can be found in the May/Jun 2009 issue of Microfinance Insights which can be purchased at www.microfinanceinsights.com/magazine_index.asp.

by Laura Anderson -

MICROCAPITAL STORY: Enda Inter-Arabe Rolls Out Grameen Foundation’s Mifos Information Management Platform to 52 Branches with Assistance from Grameen-Jameel and ThoughtWorks

Grameen-Jameel Pan-Arab Microfinance Limited and Grameen Foundation (GF) have announced that enda Inter-Arabe of Tunisa (enda) has gone live on Mifos, the management information system for microfinance institutions.  Mifos is an open source software program, meaning, among other things, the source code is accessible and the software is freely redistributable. The platform was developed by Grameen Foundation and launched in the Arab World by Grameen-Jameel.  According to the press release in CSRwire, enda expects the investment in Mifos to assist it in managing its growth from the current 100,000-plus poor clients across Tunisia to its target of 300,000 by the end of 2012.  The announcement was made at the 2009 Sanabel Microfinance Conference in Beirut, Lebanon, a gathering of microfinance practitioners and stakeholders in the Middle East and North Africa.