The European Fund for Southeast Europe (EFSE), which is advised by German firm Finance in Motion, recently disbursed a subordinated loan of approximately EUR 15 million (USD 19.4 million) to Turkish commercial bank Sekerbank.
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MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $32m to Garanti Bank Romania for Small and Medium-Sized Enterprises
The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, has agreed to loan EUR 22.5 million (USD 32.3 million) to the Romanian branch of Garanti Bank “to help finance small and medium businesses in Romania, especially those owned or managed by women entrepreneurs.”
MICROCAPITAL BRIEF: CEO of Indian Microfinance Institution BASIX Denies Charging Interest Rates of More than 24%
Sajeev Viswanathan, CEO of Indian group BASIX, which provides microfinance services through its microfinance institution (MFI) Bhartiya Samruddhi Finance Limited (BSFL), was recently interviewed by CNBC India, at which time he denied that BSFL charges interest rates as high as 60 percent on microloans.
MICROCAPITAL BRIEF: Wall’s Street Advisor Services (WSAS) Releases Series of Benchmarks for Equity Investments in Microfinance Institutions (MFIs) – WSAS MFI Shareholder Value Indexes (SVIX)
Wall’s Street Advisor Services (WSAS), an independent investment research consultancy, released the first of a new series of benchmarks for equity investments in microfinance institutions (MFIs) – the WSAS MFI Shareholder Value Indexes (SVIX).
MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) to Invest $25m in Microfinance Institutions (MFIs) Belarusian Bank for Small Business (BBSB) in Belarus, NLB Tuzlanska Banka in Bosnia and Herzegovina, and NLB Montenegrobanka in Montenegro
European Fund for Southeast Europe (EFSE), a Luxemburg-based microfinance investment vehicle (MIV), recently reported to MicroCapital that it has executed debt investments totaling USD 25 million to three microfinance institutions (MFIs) in Southeast Europe.
MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), Netherlands Development Finance Company (FMO), International Cooperation and Development Fund (TaiwanICDF) Loan $68m to Garanti Bank for Microfinance Operations
The European Bank for Reconstruction and Development (EBRD), an international finance institution, the Netherlands Development Finance Company (FMO), a public-private development bank, the International Cooperation and Development Fund (TaiwanICDF), a Taiwanese fund that aims to encourage international economic development, and five commercial banks loaned a combined EUR 50 million (the equivalent of USD 68 million) to Garanti Bank, a Turkish commercial bank, to increase loans to micro-, small, and medium sized enterprises (MSMEs).
MICROCAPITAL.ORG STORY: The International Finance Corporation (IFC) Invests $4m in Equity in Sogebank, a Haitian Bank, to Finance Micro, Small, and Medium Enterprises
For discussion of this topic click here: http://microfinanceassociation.ning.com/forum/topics/deals-in-microfinance-the
The International Finance Corporation (IFC), a member of the World Bank, is investing USD 4 million in equity in Sogebank S.A. of Haiti to finance micro, small, and medium enterprises (MSMEs) [1]. According to the IFC’s Summary of Proposed Investment, Sogebank is the largest commercial bank in Haiti with total assets of approximately USD 750 million [2]. It has a branch network of 42 branches [1]. Its activities comprise of retail and corporate banking, microfinance, remittance distribution, and factoring, which operate as independent businesses through subsidiaries [2]. Information on the percentage of its business delegated to microfinance at Sogebank is not publicly available.
MICROCAPITAL PAPER WRAP-UP: Insurance, Credit, and Technology Adoption: Field Experimental Evidence From Malawi, by Xavier Gine and Dean Yang
Written by Xavier Gine and Dean Yang. Published by the Journal of Development Economics, Volume 89, Pgs 1-11, 2009. Available at: http://siteresources.worldbank.org/INTFR/Resources/GineYang-InsuranceMalawi.pdf (35 pgs)
In “Insurance, Credit and Technology Adoption: Field Experimental Evidence From Malawi,” Xavier Gine and Dean Yang determine whether farmers who are insured against production risk have a greater demand for loans in order to invest in new hybrid seed technology than farmers who are uninsured against the failure of the hybrid seeds. This study examines maize and groundnut farmers in Malawi , where the major source of crop failure is the level of rainfall. All the farmers were offered loans to purchase high-yield hybrid maize seeds or improved groundnut seeds. Farmers in 16 areas were also required to purchase weather insurance that would forgive the loan should there be insufficient rainfall. The uninsured loan did contain an implicit limited liability constraint that allowed the lender to seize a portion of the yield rather than the collateral presented by the borrower in case of low yield. 33 percent of farmers offered the uninsured loan accepted the loan. The farmers who were required to buy insurance were 39.4 percent less likely to accept a loan to purchase hybrid seeds.
MICROCAPITAL STORY: Corrupt Microfinance Institutions in Benin Accept Bribes from Poor Borrowers; Government of Benin Calls for Reform
Local Non-Government Organizations (NGOs) and Microfinance Institutions (MFIs) in Benin which were subcontracted by the Government-run ‘Microloans to the Poorest’ program have been accused of taking bribes from their borrowers, according to a press release found on IRIN News. The Government-run program, which operates through five partner banks, provides loans up to a maximum of 60 US dollars to borrowers in Benin. No information on the partner banks involved in this program is available. These partner banks disburse loans to borrowers through local MFIs and NGOs which interface with the borrowers and serve as loan intermediaries. Loan payments from borrowers are also collected by these intermediaries and remitted back to the partner banks which lend them. The press release quoted Mr. Aboubacar Aboudou, the first director of the Government-run program, as saying that a lack of oversight coupled with the rapid growth of the program led to hiring of several ‘unscrupulous intermediaries’ to process loans. Mr. Aboudou stated that these intermediary organizations squandered funds and ‘made the poor even poorer’. The program’s current director, Komi Koutche has called for step to eliminate these intermediaries. No information is available on which local MFIs were involved in these fraudulent activities.
PRESS RELEASE: FMO Supports First Belarusian Bank for Micro and Small Businesses
MICROCAPITAL STORY: Green Mountain Coffee Roasters Pledges $450k Over Five-Year Period to Non-Profit Social Investment Fund Root Capital
On September 26, Green Mountain Coffee Roasters, Inc. (GMCR), a Vermont-based coffee company, pledged a grant of USD 450,000 over five years to Root Capital, a non-profit social investment fund focused on grassroots businesses in the developing world. This is the single largest grant in Green Mountain’s history. The announcement was made at the 2008 summit of the Clinton Global Initiative (CGI), an annual meeting of world leaders aiming to address global development challenges.
PAPER WRAP-UP: Credit Information Systems in Less-Developed Countries: A Test with Microfinance in Guatemala, by Jill Luoto, Craig McIntosh and Bruce Wydick
By Jill Luoto, Craig McIntosh and Bruce Wydick, published by the University of Chicago Press, January 2007, 42 pages, available on the Microfinance Gateway at http://www.microfinancegateway.org/content/article/detail/41758
The paper written by Jill Luoto, Craig McIntosh and Bruce Wydick explores the impact of credit information systems on microfinance institutions (MFIs) in developing economies. It is divided into five sections and presents data that attempts to measure the effect of a credit information system on a Guatemalan MFI.