Microfinance is being proposed as a potential solution to the large number of commercial motorcycle operators known as ‘Okada’ who have recently found themselves unemployed in the Rivers State of Nigeria. The government recently banned the motorcycles in the state capital of Port Harcourt as a part of its urban renewal programme. The government has asked all willing ‘indigenes’ who are displaced by the ban to access the N2 billion (USD 12.8 million) microfinance programme with First City Monument Bank (FCMB) to venture into a taxi business, which is being managed by Skye Bank. The state Transport Commissioner, George Tolofari said that the measure was a part of a government effort to ensure that former Okada operators of Rivers State origin are provided with assistance and continue to feel a sense of belonging. He also stressed that the credit facilities must be used as intended by government.
Search Results for: measure
MICROCAPITAL STORY: Rural Impulse Fund of Belgium’s Incofin Invests in Asomi, an Indian MFI
Incofin, a Belgian private social investment company that invests in MFIs, has signed an agreement with Asomi, an MFI operating in Assam, India. Incofin’s Rural Impulse Fund, which makes debt and equity investments in rural MFIs, acquired 25% of the capital of Asomi for an undisclosed amount. The investment represents Incofin’s first entry into India.
MICROCAPITAL STORY: Fidelity Bank in Partnership with the Nigerian German Business Group (NGBG) to Host Business Forum on ‘Funding Microfinance Banks’ in Lagos; Forum Facilitates the Entry of OikoCredit International in Nigeria
Fidelity Bank Plc, a commercial bank based in Nigeria has forged a partnership with the Nigerian-German Business Group (NGBG) to host a business forum on ‘Funding MicroFinance Banks’ on January 15th, 2009 in Lagos, Nigeria. According to a press release found on NigerianBulletin.com, this partnership between Fidelity Bank and NGBG is intended to facilitate the entry of the Dutch microfinance organization, OikoCredit International into the Nigerian market. The press release stated that the CEO of Oikocredit International, Mr. Tor Gull, would lead other prominent experts in microfinance at the business forum to discuss ways to ‘shore up the capacity’ of Nigeria’s microfinance banks. The discussion would also unveil OikoCredit’s plan of expansion in Nigeria. According to the release, OikoCredit would set up a regional office in Nigeria and serve as a forum of exchange between its officials and key players in Nigeria’s small and medium enterprise sector, cooperative societies, microfinance and regulatory authorities. No further detail on the event or its participants is currently available.
NEWS WIRE: Pakistan: The Case of Microfinance in the Post Crisis World
Source: The Nation.
MICROCAPITAL STORY: India’s IDBI Bank Ltd. Increases Credit to MFIs While Orissa State Government Calls for Banks and MFIs to Meet Lending Targets
India’s state-owned Industrial Development Bank of India Limited (IDBI) has announced measures to increase the amount of credit to the microfinance industry. According to the Trading Market, the IDBI has reduced the interest rates for microenterprises, increased working capital limits, reduced the margin payment and provided softer loan terms for micro, small and medium sized enterprises (MSMEs). Loans for microenterprises have been reduced by 100 basis points from interest rates on November 30, 2008. It is also planning to grant need-based “ad hoc” working capital demand loans to MSMEs repayable in one year, as well as providing “adequate” increases in working capital limits to MSMEs.
MICROCAPITAL STORY: Nigerian Based Kings Microfinance Bank Disburses 50 million Naira (nearly $367 k) Worth Of Loans to 5000 Nigerians
Kings Microfinance Bank (KMFB), a Nigerian based microfinance provider announced that it has disbursed loans worth Naira 50 million, approximately equivalent to USD 367 thousand, to nearly 5000 Nigerians over the last several months. This announcement was made by Mr. Laide Adebayo, the Managing Director of KMFB during a chat with journalists at Lagos, Nigeria, according to a press release found on Vanguard – Nigeria. KMFB is one of the 815 organizations that have been licensed by the Central Bank of Nigeria (CBN) to supply credit to the marginalized poor and thereby support the Nigerian Government in its efforts to address poverty and meet the United Nations’ Millennium Development Goals (MDGs). Originally founded as Maryland Community Bank, KMFB registered as a Microfinance Bank in January, 2008. KMFB does not report to the MIX Market, the microfinance information clearing house, nor has it published its financial data on its website. Hence information on its total assets, loan portfolio and client base is not available.
MICROFINANCE EVENT: University of California, Berkeley Hosts 10th Annual Global Business Plan Competition for Social Ventures
GLOBAL SOCIAL VENTURE 2009 COMPETITION (GSVC)
GUEST EDITORIAL: “Coping with a Crisis” by Christian Ruehmer, Reprinted From Europe and Central Asia’s Microfinance Centre (MFC)
The world of developed financial markets seems broken. Eighteen months ago the “subprime crisis” started, and a few banks were failing. Since then, bad news on the markets has been published daily. However, over the last weeks, the situation escalated with banks failing on a daily basis, Iceland’s financial system collapsing and liquidity disappearing completely.
What do microfinance institutions (MFIs) have to do with this? According to studies, microfinance is uncorrelated with other financial markets. Portfolios grow fast and public interest increases. Investors were chasing MFIs to allocate their funds and conferences were organized all over the world. Microfinance is deemed to be different. The worst-case expectation is that the crisis might slightly increase funding costs and provisions.
NEWS WIRE: Financial Predicaments in China’s Rural Areas
Source: China Business Feature.
MICROCAPITAL STORY: Asia-Pacific Economic Cooperation Hosts Annual APEC Leaders Meeting in Lima, Peru and Pledges to Support Programs for Small and Medium Enterprise (SME) Development to Combat the Credit Crisis and Promote Regional Economic Integration
The Asia-Pacific Economic Cooperation (APEC), an organization of 21 countries on the Pacific Rim that focuses on trade, investment, and other regional economic considerations, held its annual Leaders Meeting in late November in Lima, Peru. The leaders of several member countries pledged to continue financial support for the development of small and medium enterprises (SMEs) in the region as a way to combat the credit crisis and to shore up economic growth. The summit was organized under the theme “A New Commitment to Asia-Pacific Development,” a phrase meant to inspire the reduction of the wealth gap between developing and developed nations.
MICROCAPITAL STORY: Brigham Young University’s Economic Self-Reliance Center Impacts Microfinance World Through its Public Programs, its Journal of Microfinance, and its ESR Review
Brigham Young University’s (BYU) Economic Self-Reliance Center (ESR Center) is an academic research center founded in 2003 with the “express purpose” of helping families pull themselves out of poverty and “become economically self-reliant.” To achieve this mission, the ESR Center shares with low-income families abroad what it calls an “economic self-reliance model” (ESR model) through its network of over 100 partner organizations. The center contends that microfinance practitioners can use the ESR model to assess which characteristics necessary for achieving self-reliance a family possesses, and which characteristics that family must work to find. These characteristics include several “skills and abilities,” “attitudes and behaviors,” and “resources availabilities” that include intellectual capital, social capital, physical/financial capital, and human capital. Center practitioners use the information gleaned from the model to make “interventions” to help “economically vulnerable” families. It is unclear from the ESR’s website what these interventions entail, but it appears that they are meant to raise or create sustainable income streams for family members by spurring “microenterprise, microfranchising, enterprise education, and best business practices.” The Center also explicitly states that it hopes to institute interventions that impact the greatest number of economically vulnerable families. As of yet, the ESR Center does not seem to have a set of outcome measurement tools for measuring the impact of its programs on its families.
MICROCAPITAL EXCERPT: Selected Microfinance Articles from the Journal of Microfinance Published by Brigham Young University’s Economic Self-Reliance Center
‘In God We Trust’: A Qualitative Study of Church-Sponsored Microfinance at the Margins in Nicaragua
by Michael J. Pisani
A qualitative study of CARITAS Matagalpa was undertaken in May 2003. CARITAS Matagalpa is a large, self-sustaining microfinance institution that is located in central Nicaragua and affiliated with Catholic Relief Services. In-depth interviews with 36 microentrepreneurs, all clients of CARITAS Matagalpa, reveal that access to microfinance has enabled these entrepreneurs to start, expand, and develop their enterprises. These interviews also reveal that access to microfinance has also enhanced the life chances of the microentrepreneurs’ households. Additionally, multivariate statistical tests suggest the following: (1) Loan size is directly related to urban location and length of repayment period. (2) The degree of firm-level informality diminishes in urban areas and increases relative to the work experience of the microentrepreneur. (3) Income for self-employed microentrepreneurs is influenced by business sales volume, work experience, number of employees, and loan size.
MICROCAPITAL STORY: Acumen Fund Invests 2.8 Million into Development and Microfinance Programs in Pakistan
Acumen Fund, a venture capital fund that invests in sustainable development operations, announced four new investments in Pakistan. The investments amount to over USD 2.8 million. Acumen Fund began investing in Pakistan in 2002 with a focus on the housing sector, providing slum-dwellers with affordable legal housing and infrastructure alternatives, as well as financial services that allowed low-income clients to improve their homes and supplement their incomes. Acumen Fund has since expanded its focus to address the broader set of critical issues keeping the majority of the population of 160 million people in poverty.
MICROCAPITAL STORY: Are Microfinance Operations Boosting Asian Banks Against Financial Shocks?
The CEO and Managing Director of Sri Lanka’s Hatton National Bank, Rajendra Theagarajah, stated that large populations and microfinance in Asia have provided a “buffer” against the global financial crisis. An article in Sri Lanka’s Daily News reported on a speech Theagarajah gave at the Lanka Business Report-Lanka Business Online CEO Forum, stating that Asia has been able to withstand shocks to the global financial crisis due to a strong banking sector, the market available as a result of large populations, and investing in microfinance instead of focusing on subsidies. Theagarajah highlighted countries such as Cambodia, Indonesia and Bangladesh as having banks which have previously invested in microfinance and as a result have had extremely high profit margins. The banks to which he was referring were not identified, nor the role played by microfinance in any profit increases. He also stated that banks in Asia have adopted measures since the 1997 Asian Financial Crisis that are further protecting them from feeling strong negative impacts of the current crisis.
MICROCAPITAL STORY: Ethiopian Microfinance Institution Buusaa Gonofaa Wins the EUR 100,000 2nd European Microfinance Award for Social Responsibility Work
Buusaa Gonofaa, an Ethiopian microfinance institution (MFI) has won the 2nd European Microfinance Award, which is worth EUR 100,000 in prize money. The prize, provided by the Grand Duchy of Luxembourg, was announced at the European Microfinance Week event (12–14 Nov), hosted by the European Microfinance Platform. This year’s award was designed to recognise and reward microfinance players who had produced outstanding work in the area of social responsibility. Buusaa Gonofaa were rewarded for their development of an innovative system for determining customer needs and evaluating changes in their social well-being.
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.
MICROCAPITAL EVENT: Microfinance and Climate Change: Can Microfinance Institutions (MFIs) Promote Environmental Sustainability?
NOVEMBER 18 TO NOVEMBER 20, 2008, INTERNET FORUM BY MICROLINKS
Over the course of three days, MicroLinks will host a “Speaker’s Corner” entitled “Microfinance and Climate Change: Can Microfinance Institutions (MFIs) Promote Environmental Sustainability?” Speaker’s Corner events are online conferences or forums for the purpose of engaging current microenterprise and microfinance issues. This forum will be hosted by Dan Lundmark, a documentary producer and director currently working on a film highlighting the environmental policies and impacts of MFIs and microenterprises in Latin America, Africa, and Asia. Several panelists will join the forum from GreenMicrofinance: Joan Hall, Elizabeth Israel, Thomas Israel, Kathleen Robbins, Betsy Teutsch, and Bela Vora. Panelists from Indian MFIs will include Manab Chakraborty from MIMO Finance, Paul Moonjely from Wesco Credit, and Paul Thomas from the Evangelical Social Action Forum (ESAF).
PRESS RELEASE: Barclays and UNICEF Announce £5m Partnership
Source: UNICEF.