by Jeffrey Erfe -

MICROCAPITAL PAPER WRAP-UP: Innovations in Microfinance in Southeast Asia, by Gilberto M. Llanto and Ryu Fukui

Written by Gilberto M. Llanto and Ryu Fukui and based on secondary research carried out by the authors, released in July 2003 by the Philippine Institute for Development Studies as Discussion Paper No. 2003-11, 18 pages, available on November 16, 2008 at: http://econpapers.repec.org/paper/phddpaper/dp_5F2003-11.htm

Gilberto M. Llanto and Ryu Fukui describe the “emerging innovations” in microfinance observed through 2003 in Southeast Asian markets, innovations that made it possible for microfinance institutions (MFIs) to reach a greater number of poor households in a sustainable manner.  These innovations help reduce MFIs’ transaction costs and risks and enabled poor households to smooth their investment and consumption patterns.  While the paper also argues for government support of microfinance (p. 13-14), the rest of this paper wrap-up summarizes the nature and extent to which these three innovations have strengthened Southeast Asian microfinance.

by Iyanna Holmes -

MICROCAPITAL STORY: SKS Microfinance Raises $75.4m in Equity Capital in Transaction Led by Sandstone Capital

SKS Microfinance Pvt. Ltd. has announced the closing of a fourth round of equity financing in which it raised Rs 366 crore, approximately USD 75.4 million.  The transaction was led by Sandstone Capital, a U.S. hedge fund based in Boston, MA.  Also participating in the transaction were existing investors Kismet Capital and SVB India Capital Partners, an affiliate of Silicon Valley Bank.  Edelweiss Capital was the investment banker to the issue.

by Iyanna Holmes -

MICROCAPITAL STORY: International Business and Finance Network (IBF Net) and Islamic Relief Worldwide Host an Islamic Microfinance Training Program

The Islamic Business and Finance Network (IBF Net), a global network of students, researchers, and finance professionals, and its Institute of Microfinance and Development together with Islamic Relief Worldwide, an international development and relief organization, held an international training program and workshop to discuss the nuances of Islamic microfinance was recently held in New Delhi.    The program was attended by over sixty participants from the corporate sector, NGOs, and academics from India, Bangladesh, Sri Lanka and Afghanistan.

by Scott Everett -

MICROCAPITAL STORY: Barack Obama, Roots in Microfinance, Ties to USAID, Ford Foundation, Asian Development Bank, Bank Rakyat, Women’s World Banking and Chicago’s Shorebank

Elayne Clift, an independent journalist, recently wrote a piece in the The New Nation entitled “The Woman Behind Obama,” in which she describes the life of Barack Obama’s mother, Stanley Ann Dunham Soetoro. In the article she highlights some of the work that Mrs. Soetoro did in Indonesia for the Ford Foundation while she was working on her PhD in anthropology. Mrs. Soetoro had a long career of being a researcher and practitioner of microfinance. She was a consultant for the United States Agency for International Development (USAID) on a village credit program, a Ford Foundation program officer in Jakarta specializing in women’s work, a consultant in Pakistan for the Asian Development Bank (ADB), and joined Indonesia’s oldest bank (Bank Rakyat) to work on one of the world’s largest sustainable microfinance programs, creating services like credit and savings for the poor.

by Jeffrey Erfe -

MICROCAPITAL PAPER WRAP-UP: Islamic Microfinance: An Emerging Market Niche, by Nimrah Karim, Michael Tarazi and Xavier Reille

Written by Nimrah Karim, Michael Tarazi and Xavier Reille and based primarily on secondary research by the Consultative Group to Assist the Poor (CGAP), released in August 2008 as Number 49 of Focus Note, a publication of CGAP, 16 pages, available on October 27, 2008 at: http://www2.cgap.org/gm/document-1.9.5029/FocusNote_49.pdf.

by Yrenilsa Lopez -

MICROCAPITAL STORY: Madura Micro Finance to receive USD 4.52 Million from Unitus Equity Fund L.P. to expand upon Rural Microcredit Products in India

Unitus Equity Fund L.P., a Seattle-based private equity investment firm announced a funding of Rs 22 Crores (USD 4.52 million) to Madura Micro Finance Limited (MMFL) an Indian microfinance institution. Madura is a non-banking finance company servicing India’s rural poor population. It has credit networks throughout the 182 branches within the rural Tamil Nadue province, and mostly works in association with large commercial banks as sources of credit.

by the MicroCapital Team -

GUEST EDITORIAL: Ties to Capital Markets Challenge Microfinance Institutions

Once relatively insulated from the world’s financial system, the microfinance industry is finding itself more closely tied to the capital markets than ever before. As a result, it is far from being immune to the current financial crisis, and some microfinance institutions (MFIs) are beginning to see their cost of borrowing go up as a consequence of the global credit crunch.

by Scott Everett -

MICROCAPITAL STORY: The Global Financial Crisis And Microfinance

As financial markets struggle internationally, some microfinance institutions (MFIs) have begun to see downstream effects in the form of rising lending rates. Royston Braganza, chief executive officer of Grameen Capital India observed “the demand for funds is high because microfinanciers have drawn up aggressive growth plans” and “the cost of funds remains a concern due to the 2 percent increase in just the last quarter.” These factors could make fundraising very difficult for microfinance institutions in cases where they have not built up proper reserves according to K. Vinod Kumar, Assistant Vice-President of member services at SKS Microfinance.

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 Ipek Kuran -

MICROCAPITAL STORY: HSBC Ammanah partners with Islamic Relief to Launch Microfinance Program in Pakistan

HSBC Amanah, the global Islamic banking division of HSBC group, has partnered with Islamic Relief, an international development and relief organization, to offer Islamic Microfinance in Pakistan. Islamic microfinance, just like Islamic banking, will provide financial services to devout Muslims in accordance with the Shariah, the Islamic law. HSBC Amanah will provide both training and funding for Islamic Relief’s microfinance projects, starting in Rawalpindi, Pakistan.

by Ryan Benson -

MICROCAPITAL STORY: Indian SKS Microfinance Plans to Raise $30m in Equity; Possible Future IPO

To finance its ambitious expansion plans, for-profit microlender SKS Microfinance has announced it plans to raise RUP 1.3 billion (USD 30.3 million) in equity capital through private investors, hoping to increase its equity base from roughly USD 50 to 80 million. SKS’ management plans to use the new funds to double its current customer base of 500,000 over the next two years. To meet its equity target, SKS added that it may induct a new investor onto its balance sheet.

by Anthony Busch -

WHO’S WHO IN MICROFINANCE: Mr. Shafiqual Haque Choudhury of the Association for Social Advancement (ASA) in Bangladesh

Shafiqual Haque Choudhury is the founder and President of the Association for Social Advancement (ASA), a microfinance institution (MFI) based in Dhaka, Bangladesh serving over 5.5 million borrowers and reporting a loan portfolio of BDT 32.4 billion, or USD 482.5 million, in April 2008. Additionally, he recently served as an Advisor to the Caretaker Government of Bangladesh (December 2006 through 2007) with responsibility for the Ministry of Agriculture, Youth & Sports, and Cultural Affairs.

by Jennifer Lee -

MICROFINANCE EVENT: Asia-Pacific Regional Microcredit Summit 2008 Hosted by Microcredit Summit Campaign and Gema PKM

ASIA-PACIFIC REGIONAL MICROCREDIT SUMMIT 2008

JULY 28-30, 2008, BALI, INDONESIA

The Asia-Pacific Regional Microcredit Summit 2008 (APRMS) is the 12th conference in a series of global and regional summits by the Microcredit Summit Campaign (MSC). In plenary sessions, APRMS will discuss 4 commission papers and present tow Institution Action Plans. The Summit will also feature 3 sets of workshop sessions, a 5-day course on a variety of subjects, and 12 sessions organized by delegates.