by Zoran Stanisljevic -

MEET THE BOSS: Interview with Elissa McCarter, Director of the Office of Development Finance for NGO, CHF International (Part three of a three part series)

Founded in 1952, CHF International (CHF) has worked in over 100 countries and currently operates in more than 25 nations.  CHF’s mission is to serve as a catalyst for long-lasting positive change in low- and moderate-income communities around the world, helping people improve their social, economic, and environmental conditions. One component of fulfilling that mission has been improving access to financial services. In the last five years, CHF International has disbursed over 200,000 loans totaling more than USD 482 million and has a particular niche in establishing microfinance programs in conflict, post-conflict, and post-disaster settings.  CHF currently oversees lending operations in 11 countries across Africa, Asia, Europe, Latin America, and the Middle East. As of June 2009, CHF International had assets under management of over USD 200 million (microfinance portfolio outstanding of USD 107.6 million plus middle market portfolio outstanding of USD 93.5 million).

Elissa McCarter, Director of the Office of Development Finance that oversees Microfinance, SME and Housing Finance Initiatives at CHF International (CHF)

by Bharathi Ram -

MICROCAPITAL EVENT: Triple Bottom Line Investing (TBLI) 2009 Europe Conference

Event Name: TBLI 2009 Europe Conference

Date: November 12-13, 2009

Location: Amsterdam, The Netherlands, Elicium, RAI Convention Centre and Amsterdam Okura Hotel

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

by Bharathi Ram -

MICROCAPITAL STORY: Lira Women Savings and Credit Co-operative Organization (SACCO) of Uganda Faces Audit Over Impropriety

Following complaints of financial mismanagement by the Lira Women Savings and Credit Cooperation Society (SACCO), the Ugandan State Minister for Finance in charge of Microfinance, Ms. Ruth Nankabirwa has stated that a special team of auditors will be sent to examine accounts of the Lira SACCO. According to a press release on Monitor Online, Ms. Nankabirwa, while speaking to members of the SACCO at their Lira office, assured them that the problem would be solved [1]. In this regard, Ms. Nankabirwa was also quoted as saying that the ‘government would give the organization more money’. (Monitor Online is the online edition of the Ugandan newspaper, Daily Monitor [2]. Established in 1992 it is jointly owned by the Nation Media Group [3] and five other undisclosed individual shareholders).

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 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 Chinq Yee Chong -

MICROCAPITAL STORY: Small Business And Rural Finance In China – Low Leverage Ratios

In Zhang Jiawei’s recent report on the China Daily entitled ‘Micro-finance companies’ bank financing ratio won’t rise’, the head of the cooperative supervision department at the China Banking Regulatory Commission (CBRC), Zang Jinfang, was quoted as saying at a recent forum on rural financial development in Tsinghua that the ’50 percent limit on microfinance companies’ bank financing ratio will not be eased in the short run’. Currently, information (in the English language) verifying and clarifying Zang’s quotation above is not available in the public domain. It was reported that Zang recently came under pressure to raise the current ratio applicable to microfinance companies in China. However, Zang was quoted as saying that it is not the right time to ease the ratio as it may lead microfinance companies to pass their risks on to their lenders.

by Uyen Tran -

MICROCAPITAL STORY: European Union (EU) Proposes to Provide €100m in “Micro-credit” for Domestic Small Businesses to Counter Credit Crunch and Unemployment

The European Commission (EC), the executive branch of the European Union (EU), plans to allot EUR 100 million from the EU budget to provide “micro-credit” for people hoping to start a small business. A total of EUR 500 million will be available for microcredits when supplemented by the European Investment Bank (EIB), the “policy-driven lending institution” for the EU. EU leaders will further discuss this plan later in June.

by Chinq Yee Chong -

MICROCAPITAL STORY: Microloans In China – Recent Experiences In The Ningxia Province

In a Bloomberg report date dated 16 June 2009, reporter Dune Lawrence highlights the impact of microloans in rural China. By way of illustration, Wang Shulian started a business producing mineral powder that is used for plastering by obtaining microloans equivalent to USD 146 from an organization that supports rural women in the Ningxia province. Her monthly income has grown from nothing to about USD 1460 in just over 8 years.

by Jaclyn Berfond -

MICROCAPITAL STORY: Bill & Melinda Gates Foundation Gives USD 20m to World Bank to Establish Agriculture Finance Support Facility

The World Bank Group has announced the establishment of an Agriculture Finance Support Facility to support the expansion of rural finance in developing countries. The Facility is made possible by a USD 20 million grant from the Bill & Melinda Gates Foundation, through their Financial Services for the Poor program.

by Sally Levy -

MICROCAPITAL STORY: International Finance Corporation (IFC) Invests over $514m in Micro Small and Medium Enterprise (MSME) Initiatives During 2008

The International Finance Corporation (IFC), a member of the World Bank Group, provides investment and advisory services to developing countries. Created in 1956, the IFC seeks to foster sustainable economic growth by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Within its Global Financial Markets sector, the IFC supports microfinance in order to promote successful and sustainable economies in low and middle income countries. The IFC provides direct and indirect investment and advisory services to the microfinance sector. Its focus is on creating and supporting commercially viable microfinance institutions (MFIs) that can attract private capital thereby responding to unmet demand for micro loans. Furthermore it seeks to demonstrate the business case for commercial microfinance and also promote it as an asset class to private institutional investors. During 2008 the IFC invested USD 513.8 million in micro small and medium enterprise (MSME) initiatives and provided USD 840,000 worth of advisory services. Following is detailed information about IFCs activities in the microfinance arena.

by Jaclyn Berfond -

MICROCAPITAL STORY: PlaNet Finance to Expand Microinsurance Program Across Middle East and North Africa

PlaNet Finance Group plans to expand its microinsurance schemes throughout the Middle East and North Africa (MENA), following the implementation of a microinsurance program in Egypt with First Microfinance Foundation (FMF) and global insurance company Allianz.

by Zoran Stanisljevic -

MICROCAPITAL STORY: The European Bank for Reconstruction and Development (EBRD) to Lend Up to $10m to Russia’s SKB Bank to Provide Loans for Small and Medium-sized Enterprises (SMEs) in the Urals

According to the European Bank for Reconstruction and Development (EBRD), up to USD 10 million will be provided to Russia’s SKB Bank in order to provide loans for small and medium-sized businesses/enterprises (SMEs) in the Urals. The EBRD’s four-year loan provides additional funding for the Russian banking sector as part of the EBRD’s response to the global credit crisis. Terms of the funding to Russia’s SKB Bank are not provided.

by Laura Anderson -

MICROCAPITAL STORY: State Bank of Pakistan Adds Incentive to Micro Credit Guarantee Facility

The State Bank of Pakistan (SBP) has issued a new circular that it will provide a 25 percent first loss guarantee for loans under its Micro Credit Guarantee Facility (MCGF) to further encourage commercial banks to provide wholesale funds to microfinance institutions (MFIs).  The Facility was introduced last December but was met with an unenthusiastic response by banks despite the SBP’s 40 percent principal guarantee on loans.  According to the press release in the Daily Times of Pakistan, only one loan has been granted so far under the MCGF.  Banks and development finance institutions (DFIs) now will have the option of choosing either the 40 percent principal guarantee (pari passu), or the 25 percent first loss guarantee.  The first loss guarantee will cover gaps in repayment of a loan’s principal, up to 25 percent of the principal value of the loan, whereas the 40 percent principal guarantee will cover 40 percent of the actual loss incurred.  In essence the first loss guarantee covers a bank’s smaller losses upfront completely, while the 40 percent principal guarantee would require the bank to share in the losses but covers a larger percentage of loss.

by Jaclyn Berfond -

MICROCAPITAL STORY: Symbiotics Partners with Luxembourg Labelling Agency (LuxFLAG) and Spins Off Luxembourg Consulting Arm to Innpact Sàrl

Symbiotics SA, the Geneva-based investment advisor and information resource for the microfinance industry, has announced a collaboration with the Luxembourg Fund Labelling Agency (LuxFLAG). In an unrelated event, Symbiotics spins-off its Luxembourg consulting arm into an independent company, Innpact Sàrl.

by Goda Thangada -

MICROCAPITAL STORY: Bolivan Microbank Trade Association ASOFIN Projects Slowed But Positive Growth in 2009

In an interview with Business News Americas (BN Americas), the Association of Financial Entities Specialized in Microfinance (ASOFIN)‘s Executive Secretary, Fernando Prado Guachalla, remarks, “Fortunately, we haven’t felt the [financial] crisis in the microfinance sector in Bolivia.” ASOFIN, established in 1999, is an association of eight microfinance institutions (MFIs) regulated by the Superintendence of Banks and Financial Entities (SBEF) in Bolivia. BN Americas reports that members of ASOFIN expanded their loans 42 percent overall in 2008 while maintaining an average interest rate of 19.5 percent. However, Mr. Prado discloses that loan growth rates might slow to 20 to 30 percent because “It’s not adequate at this time to maintain annual growth rates of 40 percent.” Mr. Prado is ASOFIN’s highest ranking official and a Bolivian economist with 28 years of experience. He served as Chief of Party on USAID’s SEFIR project in Bolivia and was Director of the Microfinance Corporación Andina de Fomento (CAF), a Latin American bank.

by Zoran Stanisljevic -

MICROCAPITAL STORY: Will Peru’s Sluggish Economic Growth Impact Microlending? Microlender, MiBanco Plans to Slow their Loan Growth Rate to 25-30 Percent this Year in Light of Current Economic Conditions

MiBanco CEO Rafael Llosa recently informed Business News Americas (BNA) (a provider of Latin America news and business information, headquartered in Santiago, Chile) that the microlender will ease the loan growth rate this year.  “We plan to slow our growth rate to 25-30 percent this year. Our strategy includes adding new clients but not aggressively as last year.  In light of the current economic environment, the bank is focusing on its core business (loans to micro and small enterprises) and has stopped issuing home loans,” Mr Llosa stated.

by Laura Anderson -

MICROCAPITAL STORY: Russian Sberbank to Offer MicroCredit to Small Businesses

According to a report in the Moscow Times, OAO Sberbank, the largest bank in Russia, has announced it will begin offering two-year microloans ranging from 30,000 rubles (USD 880) up to 1 million rubles (USD 29,000) to small businesses.  Business owners will have to back the loans with personal collateral the bank said.