by Yanni Hao -

MICROCAPITAL STORY: Omidyar Network Grants $4.5m to Opportunity International to Scale Technology-Based Microfinance Services in Africa

Opportunity International announced it received a 4.5 million USD grant from Omidyar Network, a philanthropic investment firm. According to PR Newswire, the grant will be used to create and implement new electronic and mobile banking technologies that will reduce transaction costs and make microfinance services available to more people in Sub-Saharan Africa. Specifically, it will launch an “electronic wallet” strategy in Ghana, Kenya, Malawi, Mozambique, Rwanda, South Africa, Tanzania, and Uganda – countries where Opportunity has significant operations already, including banks and financial institutions. The strategy aims to develop the optimum mix of electronic banking technologies needed in each of these countries.

by Yanni Hao -

MICROCAPITAL STORY: CDC Group Invests $30m in Microfinance Funds: India Financial Inclusion Fund and Catalyst Microfinance Investors

CDC Group, the British government-backed, private equity fund of funds with net assets of 4 billion USD, has invested into two microfinance funds to the tune of 15 million USD: the India Financial Inclusion Fund, managed by Caspian Capital Partners, and the Catalyst Microfinance Investors, managed by Catalyst Microfinance Investment Company. By investing in MFIs, the fund aims to provide low-income persons access to a wide range of financial services, including credit, savings, and fund transfers.

by Ryan Hogarth -

MICROFINANCE PAPER WRAP-UP: “Africa Microfinance Analysis and Benchmarking Report, 2008,” by Jennifer Isern and Estelle Lahaye of CGAP, and Audrey Linthorst of MIX

“Africa Microfinance Analysis and Benchmarking Report, 2008,” written by Jennifer Isern and Estelle Lahaye of the Consultative Group to Assist the Poor (CGAP), and Audrey Linthorst of the Microfinance Information Exchange (MIX), analyzes the development of the microfinance industry in Africa with a focus on key growth trends, the regulatory environments, funding flows and structure, and performance of microfinance institutions (MFIs). The report is based on data submitted from 160 African MFIs. In 2008, the 160 MFIs collectively reached 5.2 million borrowers with a total credit line of USD 2.5 billion, and 9 million savers with gross savings of USD 2.1 billion (p1). Full text of the article is 20 pages and is available here.

by Ryan Hogarth -

MICROCAPITAL STORY: Ghanian Commissioner Charges Insurance Companies to Reach Low-Income Households through Microfinance

AllAfrica.com reported that Josephine Amaoh, Ghanaian commissioner for insurance, has charged insurance companies to explore ways to penetrate the low-income market by offering more appropriate microinsurance products, and by exploring alternative distribution channels, such as microfinance institutions (MFIs). Ms Amaoh presented a paper on “The Implementation of Micro-insurance: The Role and Perspective of The Supervisory Authority” at a West African Insurance Companies Association (WAICA) education conference in Lagos. She said “one major cause of poverty in Sub Saharan Africa is the fact that low income households and markets do not have the same opportunities to finance investments, accumulate capital, and protect their assets… In order to facilitate economic development and alleviate poverty, the financial systems must be made more inclusive by improving access to savings, credit and insurances services to the poor.”

by Bharathi Ram -

MICROCAPITAL STORY: ACCION Invests $4.2m in Two Microfinance Companies: Mauritius Based Leapfrog Investments Ltd and Swiss Based Paralife, Invests in Initiatives Aimed at Moving Microfinance ‘Beyond Credit’

ACCION International, a microfinance organization founded in 1961, has invested a total of USD 4.2 million in ParaLife, a Swiss microinsurance holding company and LeapFrog Investments, a USD 100 million microinsurance investment fund headquartered in Mauritius. In a press release found on Microfinance Gateway, Ms. Monica Baron, the principal director of ACCION’s Gateway Microfinance Innovation Fund, said that the investment by ACCION was aimed at moving microfinance ‘beyond credit’. The press release quoted Ms. Baron as saying the future of financial inclusion lay in offering the working poor a basic suite of all financial tools instead of providing only credit. In this regard, Ms. Baron mentioned that ACCION believed both ParaLife and LeapFrog Investments would be leaders for the industry, developing flexible, responsive insurance products that would meet the needs of a broad range of low income clients.

by Iyanna Holmes -

WHO’S WHO IN MICROFINANCE: Neptune Software Plc

Founded in 1999, Neptune Software Plc is a banking software provider.  The UK-based company has over 170 employees and offices in the UK, South Africa, Nigeria, Kenya, Uganda, and India.  Neptune partners with technology leaders such as BEA, Oracle, Sybase, IBM, and Business Objects.  While Neptune also provides financial services software to the broader financial services industry, the company has created a niche with microfinance institutions.  In Nigeria, Neptune has partnered with over 45 successful microfinance institutions.  In 2005, CGAP awarded the company the highest rating, 4 stars, for its operational excellence. 

by Scott Everett -

TECHNOLOGY FOCUS: Mobile Finance – Indigenous, Ingenious or Both?

Originally reported in PCWorld by Ken Banks.

In Ghana, it’s popularly known as susu. In Cameroon, tontines or chilembe. And in South Africa, stokfel. Today, you’d most likely call it plain-old microfinance, the nearest term we have for it. Age-old indigenous credit schemes have run perfectly well without much outside intervention for generations. Although, in our excitement to implement new technologies and solutions, we sometimes fail to recognize them. Innovations such as mobile banking — great as they may be — are hailed as revolutionary without much consideration for what may have come before or who the original innovators may have been.

by Iyanna Holmes -

MICROCAPITAL STORY: Challenges and Unique Solutions to Providing Microinsurance in West Africa

The products and services of most West African insurance companies target corporate clients and those individuals that are not living in poverty. The infrastructure of most insurance companies is not equipped to provide insurance to the poor. Microinsurance premiums are low, administrative costs are high, and traditional distribution channels are not always effective. Also, because premiums are low, microinsurance is a long term investment from the insurance company’s perspective as opposed to traditional insurance companies which collect larger premiums. All of these factors combined, reports Business Day, a Nigerian business news source, result in scarce microinsurance offerings to West Africa’s poor populations.

by Scott Everett -

MICROCAPITAL STORY: Microfinance Institution ACCION International Launches New Hub in Africa

ACCION International, a microfinance organization founded in 1961, launched a new hub office and training center in Accra, Ghana, with the aim to expand financial services for Africa’s poorest populations. The new center will offer support to East and West African microfinance institutions (MFIs) in the form of education and training to increase capacity. According to the press release, ACCION’s goals are to train 3,000 microfinance practitioners in such disciplines as business planning, risk management, lending and governance; all through its training center network.

by Scott Everett -

MICROCAPITAL STORY: Microsoft & IBM Target Microfinance for Social and Capital Returns

Increasingly, some of the world’s largest technology companies are looking toward the developing world for both clients and innovation opportunities. Intellecap, a social business advisory firm, recently published interviews with IBM and Microsoft in its bi-monthly magazine Microfinance Insights; the interviews discuss the companies’ involvement in the microfinance sector. C.K. Prahalad, Professor of Corporate Strategy at the University of Michigan Ross School of Business said “I believe that the companies that are clued in [to this market] will have enormous benefits, and will take that knowledge back to the rest of the world. To me, the base of the pyramid is not just an opportunity for market expansion…it is an opportunity for innovation.”

by Jeffrey Erfe -

MICROCAPITAL STORY: Micro-Lender Letshego Holdings Limited (Micro Provident) Seeks $137.7m in Capital for Expansion of African Operations

Letshego Holdings Limited, a micro-lending company based in Botswana, announced on October 10 that it intends to raise USD 137.7 million (BWP 1 billion) in debt instruments in order to fund the expansion of its micro-lending operations across Africa. Target countries in the short to medium term include: Ghana, Mozambique and Namibia. Over 80 percent of shareholders—excluding the World Bank and the International Finance Corporation (IFC)—voted to approve the move at a special general meeting in Gaborone, Botswana.

by Yrenilsa Lopez -

MICROCAPITAL STORY: Barclays to Donate $20m to expand its Microfinance Pilot Program in Uganda in collaboration with CARE International and UWESO

Barclays bank has announced a three year, USD 20 million funding plan to support microfinance programs in ten countries across Africa, Asia and Latin America. The program will include the expansion of existing community-based financial services, as well as the introduction of new microfinance programs in collaboration with CARE International, Plan International and Accenture consultancy firm.

by Lori Curtis -

MICROCAPITAL STORY: Gates Foundation Matches Rotary and Caster Foundation to Donate $600,000 to Opportunity International

USD 600,000 was raised by a cooperation between Opportunity International, the Bill and Melinda Gates Foundation, the Caster Foundation, and Rotary Clubs throughout the USA and Canada. The fundraising effort was initiated with an offer by the Gates Foundation to match and double funds raised for Opportunity International, up to a total donation of USD 400,000 by the Foundation. Thirty-six Rotary Clubs in and around San Diego, as well as clubs in Calgary, Canada and The Caster Foundation, joined this initiative to raise a total of USD 600,000 for Opportunity International, a network of partners and institutions that facilitate microfinance, microinsurance and microsavings globally. Bink Cook, co-chair of San Diego Rotary’s Microcredit Committee spoke of Rotary’s motivation to get involved saying that this was, “an ideal opportunity to collaborate in a major program with global impact“. The funds will be distributed by Opportunity International as microloans through their lending facilities in Ghana, where they have 117 thousand active clients and have already loaned USD 98.8 million. Opportunity International currently operates in ten African countries.