The Central Bank of Bosnia and Herzegovina (CBBH) and KfW Entwicklungsbank (KfW) recently co-hosted a conference about the importance of responsible business practices in the financial sector, including the microfinance sector, of Bosnia and Herzegovina. In his opening remarks, Governor Kemal Kozaric, governor of CBBH, stated: “The global financial crisis has proven that the principle of responsible finance has not been sufficiently developed with banks and with clients. It has now become evident that the liquidity risk of banks in Bosnia and Herzegovina is rather low, and that the main problem is the quality of loans.” The Governor’s remarks were framed in light of the fact that the nation’s financial sector had experienced tremendous growth over the past years, which has resulted in greater access to financial services even by the nation’s poor. Despite this growth, Sylvia Wisniwski, Chief Operating Officer of the European Fund for Southeast Europe (EFSE), emphasized in her presentation that, “Responsible lending principles must be adhered to during the entire lending cycle, starting with a prudent assessment of the creditworthiness of individual clients and continuing with a fair and transparent lending relationship.” The conference included presentations on responsible management of foreign currency reserves by the central bank, the role of stakeholders in responsible finance, and the role of the Association of Microfinance in Bosnia and Herzegovina.
Search Results for: microfinance financial crisis
MICROCAPITAL BRIEF: Overseas Private Investment Corporation (OPIC) Provides $25m Loan to ProCredit Holding to Lend to Micro, Small, and Medium Enterprises (MSMEs)
The Overseas Private Investment Corporation (OPIC), an “independent U.S. government agency” that provides services to facilitate foreign investment to “less developed countries,” has approved a loan of USD 25 million to ProCredit Holding, “a [German] parent company of 22 development-oriented banks” operating in Latin America, Eastern Europe and Africa with a gross loan portfolio of EUR 3.3 billion, the equivalent of over USD 4.9 billion, as of the end of 2008 [1,2,3]. This loan will be used by ProCredit to expand their loan provision to micro, small, and medium enterprises (MSMEs) [1]. MicroCapital reported on a 2005 loan from OPIC to ProCredit worth USD 30 million [4]. OPIC also made a USD 3 million loan to a ProCredit microfinance institution (MFI) in Moldova in 2005, and a USD 5 million loan to ProCredit Bank in Ukraine in the same year [5,6]. OPIC Acting President Dr. Lawrence Spinelli has commented on the importance of the latest loan in terms of allowing ProCredit to “diversify its capital base” [1].
MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Provide Kotak Mahindra Bank of India with Trade Financing Line of $51m to Lend to Small and Medium Enterprises (SMEs) Involved in International Trade
The International Finance Corporation (IFC), the investment arm of the World Bank, is set to provide a trade financing line of USD 51 million to Kotak Mahindra Bank, an Indian commercial bank, to lend to small and medium enterprises (SMEs) involved in international trade [1,2,3]. The line is part of the IFC’s Global Trade Finance Program, a USD 3 billion program intended to allow banks to “deliver trade financing by providing risk mitigation in new or challenging markets where trade lines may be constrained” [4]. Kotak Mahindra is the first Indian bank to be supported under this program [1]. MicroCapital has reported on the participation of other banks in this program, including Bank Respublika of Azerbaijan [5]. Dipak Gupta, the Executive Director of Kotak Mahindra Bank, has stated the importance of the line in allowing the bank to provide “a wider base of short-term foreign-currency trade finance products” [1].
MEET THE BOSS: Interview with Andrew Kuper, President and Founder of LeapFrog Investments Ltd.
Dr. Andrew Kuper is President and Founder of LeapFrog, the world’s first microinsurance fund, which he founded in 2007. He was previously a Managing Director of Ashoka, a support organization for social entrepreneurs. He has worked with microfinance institutions Grameen and BRAC, and is the author of two books on globalization. He holds a PhD from Cambridge University in the United Kingdom.
MICROCAPITAL.ORG STORY: Australian Bank ANZ Amasses 10 million Fijian Dollars (USD 5.3 million) in Deposits through Mobile Rural Banking Program in Fiji Launched in 2004 in Conjunction with the United Nations Development Programme
ANZ, an Australian commercial bank, launched a mobile rural banking scheme in 2004 in an effort to offer financial services to new clients in a different nation, Fiji [1,2]. The program was launched in conjunction with the United Nations Development Programme (UNDP), the United Nation’s “global development network,” with the intention of providing credit to low-income Fijian households [1,3]. Since the program’s inception, ANZ has amassed 10 million Fijian Dollars in deposits from Fijian clients, the equivalent of over USD 5.3 million [1]. Microcapital reported on this rural banking scheme in July of 2009 [4]. Microcapital has also reported extensively on mobile banking [5,6,7].
MICROCAPITAL.ORG STORY: Credit Guarantee Corporation of Malaysia Agrees to Guarantee $29.6m of Standard Chartered´s Loans to Small and Medium-Sized Enterprises (SMEs)
Standard Chartered Bank Malaysia Bhd, in collaboration with the Credit Guarantee Corporation of Malaysia (CGC), has launched the “Portfolio Guarantee Scheme.” The plan calls for the CGC to act as a partial guarantor for the USD 29.6 million in loans that Standard Chartered plans to disburse to small and medium enterprises (SMEs) over the next 18 months [1].
MICROCAPITAL.ORG STORY: Banco Compartamos SA Applies for Banking License to Accept Deposits from Clients
Banco Compartamos SA, a publicly traded Mexican bank and the largest microfinance institution (MFI) in Latin America with USD 587.8 million in total assets, plans to apply for a license to expand its banking services [1, 2, 3]. The license will allow the bank to take deposits by offering savings accounts to clients. It will also allow third parties to use the deposits to issue credit to and take interest payments from some of Compartamos´ 1.2 million customers.
MICROCAPITAL.ORG STORY: Hong Kong and Shanghai Banking Corporation (HSBC) Partners with Women’s World Banking (WWB) to Launch Loan Product for Small Businesses and Rural Workers in China
The Hong Kong and Shanghai Banking Corporation (HSBC), the fifth largest bank in the world with a market value of USD 104.2 billion, has partnered with Women’s World Banking (WWB), a non-profit that provides support and training to a network of 40 microfinance institutions (MFIs), to launch a product called “happy loans” [1, 2, 3]. The product aims to provide financial services to small businesses and rural workers, particularly farmers, who struggle to obtain loans due to the seasonality of their businesses, which cause variable cash flows.
PRESS RELEASE: IFC Loaning $70m in Local Currency to PT Bank Tabungan Pensiunan Nasional Tbk of Indonesia, with Part Convertible to Equity
Source: International Finance Corporation.
MICROCAPITAL.ORG STORY: Inter-American Development Bank (IDB), Overseas Private Investment Corporation (OPIC), Inter-American Investment Corporation (IIC), BlueOrchard and Other Investors Establish Microenterprise Growth Facility to Loan $250m to Latin America and Caribbean MFIs
In April, MicroCapital reported that President Obama, in response to the global financial crisis, announced the launch of a Microfinance Growth Fund for the Western Hemisphere to provide lending to small businesses in the region [1]. In response to this announcement, the following organizations have signed an agreement establishing the Microenterprise Growth Facility (MIGROF), a public-private partnership intended to provide USD 250 million in lending to microfinance institutions (MFIs) in Latin America and the Caribbean (LAC): BlueOrchard Finance S.A., a Swiss microfinance investment management company, which has been appointed to exclusively manage the facility; The Inter-American Development Bank (IDB), a development financial institution; the Overseas Private Investment Corporation (OPIC), an independent U.S. government agency which aims to facilitate investment in developing countries; the Inter-American Investment Corporation (IIC), an affiliate of the IDB which supports private sector and capital market development in LAC countries; and the Corporación Andina de Fomento (CAF), a multilateral financial institution which supports sustainable development in LAC countries [2].
MICROCAPITAL.ORG STORY: Social Capital Markets 2009 (SoCap09) and Global Impact Investing Network (GIIN) Support “Social Financing”
A recent story from The Economist titled, “Financial innovation and the poor: A place in society,” states that despite the recent financial crisis, bankers, investors, and philanthropists have not shied away from capital markets. [2]
MEET THE BOSS: Emmanuelle Javoy, Managing Director of Planet Rating
Emmanuelle Javoy is the Managing Director of Planet Rating. This feature is sponsored by PlaNet Finance.
MicroCapital: Please briefly describe your organization.
Emmanuelle Javoy: Planet Rating is a microfinance rating agency, meaning that we provide ratings or evaluations of the sustainability of microfinance institutions (MFIs) – both the financial and social sustainability of the institution.
PRESS RELEASE: Intellecap Chairman and Aavishkaar Founder Vineet Rai Responds to The Wall Street Journal
Source: Intellecap.
MICROCAPITAL EVENT: Triple Bottom Line Investing (TBLI) 2010 Europe Conference, London, United Kingdom
Event Name: TBLI 2010 Europe Conference
Date: November 11-12, 2010
Location: Canary Wharf, London, United Kingdom
See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events
MICROCAPITAL.ORG PAPER WRAP-UP: Group versus Individual Liability: Long Term Evidence from Philippine Microcredit Lending, Xavier Giné and Dean Karlan
Written by Xavier Giné and Dean Karlan published May 2009 as a cooperative effort by Financial Access Initiative and Innovations for Poverty Action, 37 pages, available at:
http://financialaccess.org/sites/default/files/GroupversusIndividualLend…
and
http://poverty-action.org/sites/default/files/GroupversusIndividualLendi…
This study, which took place in Caraga, Philippines, used two separate experiments to perform a comparative analysis of the respective merits of a group-liability lending scheme in contrast to an individual-liability one. A group-liability scheme is thought to be a “collateral replacement” in that members put social pressure on each other and even help each other repay if necessary for the reason that no one in the group can receive further loans from the bank if even one person defaults. An individual-liability scheme has no such mechanism, thus making people without collateral, like those in this experiment, seem like credit risks.
MICROCAPITAL EVENT: Triple Bottom Line Investing (TBLI) 2010 Asia Conference, Bunkyo-ku, Tokyo, Japan
Event Name: TBLI 2010 Asia Conference
Date: May 27-28, 2010
Location: Four Seasons Hotel Tokyo at Chinzan-so
Our Comprehensive Event Calendar: https://www.microcapital.org/category/events/
MICROCAPITAL.ORG STORY: BlueOrchard Private Equity Fund Invests Rs 500 million ($10.2 million) in Asmitha Microfin
BlueOrchard [1], a commercial microfinance investment intermediary based in Switzerland, has, through its Private Equity fund, invested Rs 500 million (the equivalent of over USD 10.2 million) in the equity of Asmitha Microfin Limited [2], a Microfinance Institution (MFI) based in Hyderabad, India. This was announced in a press release [3] available on the Asmitha website. Microcapital covered the relationship between these two organizations in October of 2008 when BlueOrchard made an initial equity investment in Asmitha of USD 5.3 million intended to “expand [the MFI’s] capital base and bolster its borrowing capacity” [4]. According to Dr. Vidya Sravanthi, Chairperson and Managing Director of Asmitha, the MFI hopes to use the newest investment to “[expand] its operations deeper into the Indian rural markets and offering its services to many more of the under-served poor in these regions” as well as move toward “growth targets” set by Blue Orchard [3].
MICROCAPITAL.ORG STORY: International Finance Corporation (IFC) Invests $1.2m in Paraguay’s Financiera El Comercio
In June 2008, the International Finance Corporation (IFC) announced a proposed investment in Financiera El Comercio, a Paraguayan microfinance institution (MFI) [1]. On August 12, 2009 the proposal was approved and the IFC declared an investment of USD 1.2 million in the MFI. The investment is part of the IFC’s plan to protect and support MFIs in the wake of the economic crisis [2]. Details about the approved investment have yet to be disclosed, however the proposed investment projected a 12% equity investment in Financiera El Comercio. According to the proposal, the purpose of the investment is to help ensure the MFI’s sustainability and to provide capital support for its future growth [1].