Remittances, the portion of international migrant workers’ earnings sent back from the country of employment to the country of origin, play an important role in the economies of many developing countries. An annual statistical report done by the World Bank shows that remittances account for 5% of the GDP for low-income developing countries as of 2006. Although this figure might seem small, many countries in particular have a much higher percentage of their GDP based in Remittances; Guyana, Haiti and Honduras are all close to 25%. The Philippines, Nicaragua, Nepal, Guatemala and El Salvador are all in the 10-20% range. Jack Kimball of Reuters points out that “remittance cash may be as much as 50 percent higher than current estimates due to informal transfers.” Global remittances from foreign workers make up an estimated $300 billion a year, three times as much as the foreign aid paid out by governments in the developed world. The biggest share of this, over $42 billion, comes from immigrants working in the United States. But what these numbers really reflect is that millions of families and individuals in these countries have come to depend on remittances as a vital source of income.
Search Results for: mexico
MICROCAPITAL STORY: Mexican Billionaire Carlos Slim Donates $5m and Guarantees $40m for a New Mexican Microfinance Institution, Grameen Carso, Run by the Grameen Trust of Bangladesh
The Grameen Trust of Bangladesh, a member of the Grameen Family that helps build new microfinance institutions (MFIs) around the world, plans to open a new MFI in Mexico. Fundacion Carlos Slim, the charitable organization of Mexican billionaire Carlos Slim, will provide an initial donation of USD 5m and guarantee another USD 40m in loans, which will create the total capital base for the new MFI. The new MFI will be modeled after the Grameen Bank. It will be a non-profit using the ‘social business‘ model, which implies that it will reinvest all profits back into the operation of the company. The new MFI, which will initially target 80,000 borrowers, will be named Grameen Carso after the Mr. Slim’s business conglomerate, Grupo Carso. The company will initially be managed by the Grameen Trust, but eventually they hope to turn the company over to Mexican operators.
PRESS RELEASE: World Bank Publishes Remittance Price Database
Source: International Finance Corporation (IFC).
NEWS WIRE: Microfinance Leaders Launch Campaign for Client Protection at Clinton Global Initiative
Source: CSR Wire.
MICROCAPITAL STORY: Financiera Independencia’s (FINDEP) Managerial Change brings Investment Experience to its Microfinance Lending Services.
Financiera Independencia, a microfinance lending firm based in Mexico, has appointed Didier Mena Campos as its new Chief Financial Officer (CFO). Mr. Mena Campos’ previous experience includes seven years at Credit Suisse Mexico, an expansive branch of the multiservice bank which holds USD 355.5 million total assets in the country. As Managing Director, he was co-responsible of investment banking in Central America and parts of Mexico, as well as strategic partnerships and mergers among larger financial institutions such as HSBC and GE Money.
NEWS WIRE: United States: Alex Counts of the Grameen Foundation “Reimagines” Microfinance in the Stanford Social Innovation Review
Source: Stanford Social Innovation Review.
WHO’S WHO IN MICROFINANCE: SNS Asset Management
SNS Asset Management is a subsidiary of SNS REAAL, the fifth largest financial institution in the Netherlands. The asset management division was founded in 1997 after the merger of SNS bank and De Hollandse Koopmansbank. The firm, which is a participant in the United Nation’s Principles for Responsible Investing initiative (PRI), currently has EUR 19b in assets under management.
MICROCAPITAL STORY: Dutch SNS Asset Management Fundraising for Second SNS Institutional Microfinance Fund to be run by American Developing World Markets (DWM)
According to the Responsible Investor, an online magazine, SNS Asset Management is currently fundraising for a EUR 100m successor to the SNS Institutional Microfinance Fund. The new fund, which will be run by Developing World Markets (DWM), was created because of the overwhelming demand among Dutch institutional investors for the first iteration.
MICROCAPITAL STORY: Banco Compartamos’ Client Base Reaches One Million
Mexican microfinance giant Banco Compartamos recently announced that it has officially reached the milestone of providing microlending services to one million active clients.
MICROCAPITAL STORY: Philip Vassiliou of Legatum Capital Publishes Editorial Supporting For-Profit Microfinance in The Economic Times
In a recent Economic Times editorial, Philip Vassiliou, managing director of Legatum Capital, an international investment firm, argues that, “to reach its full potential, the microfinance sector must embrace free market principles of competitive pricing and commercial incentives.” He also believes that “modifying these incentives, however noble the intention, will only damage the natural development of the sector.” His comments come at a time of fierce debate over the benefits of commercial microfinance.
MICROFINANCE PAPER WRAP-UP: An Investigation of Economies of Scale in Microfinance Institutions, by Joshua Zacharias
Written by Joshua Zacharias, Glucksman Institute for Research in Securities Markets at The Leonard N. Stern School of Business, New York University, Faculty Advisor: David Backus, April 16, 2008, available at: http://archive.nyu.edu/handle/2451/25936.
‘Economies of scale’ refers to increased efficiency (lower average costs per unit produced) experienced by firms as they increase the overall size (total units produced) of their operations. For financial institutions, this measurement measures cost savings realized from increasing the size of its loan portfolio in terms of both number of loans and overall value of loan portfolios.
MICROCAPITAL STORY: Inter-American Development Bank (IDB) Multilateral Investment Fund (MIF) to Invest USD 5m in Mexican IGNIA Social Investment Fund in Addition to Previous USD 25m Loan from the IDB’s Opportunities for the Majority Initiative (OM)
The Inter-American Development Bank (IDB) has made a USD 5m equity investment in the IGNIA Social Investment Fund through the Multilateral Investment Fund (MIF) and a USD 205,000 technical cooperation grant. The IGNIA venture capital fund also received a recent USD 25m loan from the IDB’s Opportunities for the Majority Initiative (OM).
MICROCAPITAL STORY: HSBC Turkey Allocates USD 5 million to Microfinance Loans in Turkey
HSBC Turkey, the Turkish arm of the global bank HSBC, announced the allocation of USD 5 million toward microcredit loans until 2010 in Turkey. According to Piraye Antika, the CEO of HSBC Turkey, the microcredit loans will be evenly split between urban areas, rural areas and young university-graduate entrepreneurs. In disbursing the loans, HSBC will work with three non-government organizations: the Turkish Waste Prevention Foundation, the Community Volunteers, and the Female Labor Assessment Foundation.
MICROCAPITAL STORY: Following Strategic Review, the Gates Foundation to Focus on Microsavings Within Microfinance Initiative
The Bill and Melinda Gates Foundation, a charitable organization that was created in 2000 with an endowment of USD 35.9 billion, plans to direct hundreds of millions of dollars to promoting savings programs designed for the poor over the coming years, reports the Wall Street Journal. Following a review of its existing microfinance grants and a broader study of its financial services strategy, the Gates Foundation decided to focus its efforts on promoting savings in the developing world.
NEWS WIRE: United States and Indonesia: MicroFinance Transparency to Publicize Microfinance Institution Rates & Fees
Source: Business Week.
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.
MICROCAPITAL STORY: General Electric Consumer Finance (GE Money), based in London, supports FINCA Village Banking, based in Washington DC, with USD 1.5 million Grant
General Electric Consumer Finance (GE Money) has made a three-year commitment worth USD 1.5 million to support FINCA’s (Foundation for International Community Assistance) Village Banking Campaign. Founded in 1984, FINCA’s Village Banking aims to reach 1 million of the world’s lowest-income entrepreneurs by the end of 2010. During 2008, FINCA will use the first USD 500,000 installment of the funding to expand in Middle East, Africa, Eurasia and Asia.
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.