Source: Microfinance Information Exchange (MIX).
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MICROCAPITAL.ORG STORY: Review of Key Microinsurance Information Resources
Microinsurance, an emerging field in microfinance, aims to protect low-income people against risks such as illness, death and natural disasters in exchange for low premiums. As a fairly nascent field, microinsurance-related information is less prevalent than information on the more dominant fields of microfinance like microcredit or microsavings. The following list, however, represents some of the key providers of microinsurance resources today:
MICROCAPITAL.ORG STORY: Citi Foundation Provides $25,000 Grant to MFTransparency, Provider of Data of Price Transparency for the Microfinance Industry
Citi Foundation, a grant-making charitable foundation that is part of the financial services company, Citigroup, has provided a USD 25 thousand grant to MFTransparency, a “global initiative for fair and transparent pricing in the microfinance industry” [1,2,3,4]. MFTransparency plans to use the grant to “increase its industry presence and visibility, secure additional long term funding, and progress towards its near and long term goals” [1].
MICROFINANCE EVENT: Responsible Regulation: Lessons and Innovations in Microfinance from the Developing World by International Development Law Organization, November 12, 2009, Rome, Italy
Event Name: Responsible Regulation: Lessons and Innovations in Microfinance from the Developing World
Event Location: Via di Ripetta 231, Rome, 00186, Italy
Event Description: Conference
MICROCAPITAL.ORG STORY: Government of Italy Provides $9.1m to MicroFinance Investment Support Facility for Afghanistan (MISFA)
Afghanistan´s finance minister Omar Zakhilwal and Italy’s ambassador to Afghanistan, Claudio Glaentzer, have signed a bilateral agreement under which the Italian government will provide USD 9.1 million (Euro 6.4 million) to the Afghan microfinance sector. The money will be given to a trust fund within the Ministry of Finance, managed by MicroFinance Investment Support Facility for Afghanistan (MISFA), an independent agency. Under the agreement, the loans will be disbursed to poor Afghans in the western provinces of Herat, Farah and Baghdis, where Italian troops operate [1]. The agreement coincides with an announcement by Italian Defense Minister Ignazio La Russa that 400 of Italy’s 3,000 troops in Afghanistan would be withdrawn after the November 7th election [2].
PRESS RELEASE: African Microfinance Transparency Forum Unites 70 MFIs, Investors
Source: African Microfinance Transparency.
PRESS RELEASE: Citi Grants $25,000 to MicroFinance Transparency
Source: MicroFinance Transparency.
MEET THE BOSS: Interview with Robert Annibale, Global Director of Citi Microfinance (Part Two of a Two Part Series)
Bob Annibale is Global Director of Citi Microfinance. He leads the bank’s commercial relationships with microfinance institutions, on a multi-business and product basis, providing financing and product partnerships to institutions that serve the poor and the unbanked.
He joined Citibank in 1982. After a first assignment in Greece, he held a number of senior treasury, risk and corporate positions at Citi in Athens, Bahrain, Kenya, London and New York. Mr. Annibale completed his BA degrees in History and Political Science at Vassar College and his Masters Degree in African Studies (History) at the University of London, School of Oriental and African Studies.
Mr. Annibale served on the Board of Advisors for the United Nations High Level Commission on Legal Empowerment of the Poor. He represents Citi on the Board of the Microfinance Information Exchange, on the Council of Microfinance Equity Funds and with the Microfinance Network. He also serves on a number of other external boards and councils.
MICROCAPITAL.ORG STORY: Unitus Hires Dr. Brigit Helms as New CEO
Unitus Inc., a Seattle based microfinance group, has hired Dr. Brigit Helms as its new chief executive. Dr. Helms will replace Geoff Davis, who stepped down as Unitus CEO in July 2008.[1]
MICROCAPITAL.ORG STORY: Developments in the Past Year of Microfinance Regulation Coverage by Microcapital.org
Microfinance regulation has provided rich fodder for reporting over the past twelve months of coverage by Microcapital.org. Nearly twelve months ago, in November 2008, Microcapital.org reported on the World Economic Forum’s Inaugural Summit on the challenges posed by regulatory frameworks as policy makers grappled with the question of how to advance microfinance. Since that time, there have been a number of international agencies as well as developed country governments involved in researching and collaborating on guidelines for the strengthening of microfinance regulation. On the other hand, there have also been doubts about the relevance of regulation to microfinance sector:
MICROFINANCE PAPER WRAP-UP: Advances in Measuring Social Performance for Microfinance Institutions by Micol Pistelli
Written by Micol Pistelli, Manager of Social Performance at MIX for Workshop 8 at the IDB Foromic 2009 (Inter-American Forum on Microfinance) in Arequipa, Peru. Published October 2009 by the MIX, 2 pages, available at: http://www.themix.org/publications/executive-summary-social-performance-standards-presentation-2009
MICROCAPITAL.ORG STORY: MicroFinance Transparency Launches First Publicly Available True-Cost Pricing Data for Microfinance Loan Products
MFTransparency, founded in July of 2008 as part of a global initiative for fair and transparent pricing in the microfinance industry, has launched the first phase of its “Data Launch Rollout Plan,” beginning with Bosnia and Herzegovina. The publicly available data include up-to-date interest rates for microfinance loan products throughout specific countries. According to MFTransparency, “It will be the one and only place to find the ‘market price’ for the majority of micro-credit products within a country” [1].
MICROFINANCE PAPER WRAP-UP: Turning Principles into Practice: A Nicaraguan MFI Commits to Consumer Protection, by the Microfinance Gateway
Written by the Microfinance Gateway, Published on the Microfinance Gateway in July 2009, available at: http://www.microfinancegateway.org/p/site/m/template.rc/1.26.10904/
This article covers the steps taken by Banex, a Nicaraguan microfinance institution (MFI), to ensure that the Client Protection Principles put together by ACCION’s Center for Financial Inclusion and the Consultive Group to Assist the Poor (CGAP) are put into practice [1,2,3,4]. The principles were formed following the initial public offering (IPO) of Compartmos, a Mexican MFI, led to speculation over whether MFIs are taking profits into consideration more than the best interest of their clients [5]. The Client Protection Principles are as follows:
MICROCAPITAL.ORG STORY: The Smart Campaign Industry Leaders Call For Key Consumer Protection Initiatives
On October 20, 2009, Vikram Akula of SKS Microfinance in India, Elizabeth Littlefield of CGAP at The World Bank and Kurt Koenigsfest of BancoSol in Bolivia spoke during a panel discussion on how to instill consumer protection principles within the microfinance industry. Elisabeth Rhyne, managing director of the Center for Financial Inclusion at ACCION International, made introductory remarks and Robin Ratcliffe, Director of the SMART Campaign, moderated the discussion.[1]
MICROCAPITAL.ORG STORY: Braking Securitizations – India’s Economic Times Reports That The Reserve Bank of India Proposes To Ask Originating Banks To Hold Loans On Their Balance Sheets For 6 Months To Stem ‘Reckless Securitizations’ And Suggests That Holding Periods Should Be Tailored For Banks Originating Microfinance Loans
A recent article in India’s Economic Times entitled ‘The Reserve Bank of India may ask banks to hold securitised debt for six months’ [1] by Gaurav Pai noted that the Reserve Bank of India (RBI) [2] may ask Indian banks to retain originated debt on their loan books for six to seven months before selling or securitising those loans to other market players. A securitisation is a financing technique under which loans originated by a bank are sold to another market participant, usually a special purpose vehicle (SPV) for an agreed price. The SPV funds the purchase of the portfolio of loans from the originating bank by issuing debt instruments to investors. These debt instruments are often known as ‘asset backed securities’ as they are typically backed or collateralised by the portfolio of loans.
MEET THE BOSS: Discussions on Successful Due Diligence When Evaluating Microfinance Investment Vehicles’ (MIV’s) Financial Viability: Interview with Christina Leijonhufvud, Managing Director, Social Sector Finance Group (SSF)/Investment Bank (IB) at JP Morgan (Part III of a Three Part Series)
Ms. Leijonhufvud is Managing Director of the Global Social Sector Finance Group at JPMorgan. The SSF unit leverages JP Morgan’s products and skills to help bring financial services to microfinance and social enterprises around the world. The scope includes capital markets, structured products and principal investments. The unit seeks to achieve a double bottom line of social benefit and financial returns. According to JP Morgan, potential demand for sustainable financial services is immense, at an estimated USD 300 billion. JPMorgan utilizes its global IB platform to raise capital to support poverty alleviation initiatives in developing economies
Ms. Leijonhufvud has led J.P. Morgan’s Social Sector Finance unit since its inception in late 2007. A double bottom line initiative that brings financial services and financing to microfinance institutions and other enterprises serving the base of the economic pyramid, Social Sector Finance also focuses on engaging the firm’s employees in these sectors. Outside J.P. Morgan, Ms. Leijonhufvud serves on the Advisory Board for the Center for Financial Inclusion, has been a consultant to Ashoka-Innovators for the Public in their social financial services venture, and has lectured widely on financial globalization and emerging markets risks. Ms. Leijonhufvud has held various risk management positions at J.P. Morgan, including as head of Country Risk Management & Advisory, Credit Portfolio Market Risk Management, Emerging Markets Market Risk Management, and Industry Concentrations. Prior to joining J.P. Morgan in 1996, Ms. Leijonhufvud worked at the World Bank as Country Officer, helping develop reform programs and borrowing strategies for the former Soviet Republics of Central Asia. In 1991, she served on the Economic Reform Committee for the Government of Kazakhstan. Ms. Leijonhufvud earned a M.Sc. degree in Economics from the London School of Economics, a M.A. degree in International Affairs from George Washington University, and a B.A. in Sociology from UCLA.
MEET THE BOSS: Interview with Richard Weingarten, Managing Director of the Norwegian Microfinance Initiative (NMI)
The Norwegian Microfinance Initiative (NMI) is a partnership between the Norwegian public and private sectors that will invest in microfinance institutions (MFIs) in developing countries. NMI will also provide professional assistance and technical support for these institutions. NMI will invest through two investment funds: the NMI Global Fund, which invests primarily in microfinance investment vehicles (MIVs) focused on investments in Africa, Asia and Latin America, and the NMI Frontier Fund, which invests primarily in emerging MFIs in Sub-Saharan Africa and South Asia. Investors have committed NOK 600 million (approximately USD 100 million) to the two funds. Professional and technical assistance will be provided through the NMI Professional Assistance Facility, funded by Norad, Norway’s international development agency. Investors and strategic partners of NMI include Norfund (a development finance institution owned by the government of Norway) and four private sector financial services institutions: Ferd, KLP, DnBNOR, and Storebrand.
MicroCapital: What is the background of NMI?
Richard Weingarten: The Norwegian Microfinance Initiative is a new partnership between the government of Norway (through Norfund, Norway’s development finance institution), and four private sector financial services firms. Those four firms are Storebrand, a large insurance company; KLP, a large insurance and pension fund manager; DnBNOR, the largest bank in Norway, through Vital, its insurance subsidiary; and Ferd, which is a large private equity firm. This is a true public-private partnership in the sense that the private sector partners contributed capital equally with the public sector. Total capital is about USD 100 million. One of the main purposes of the partnership was for NMI, as a special Norwegian initiative, to become a significant contributor and participant in the international microfinance community.
MICROFINANCE PAPER WRAP UP: Microfinance Consensus Guidelines: Guiding Principles on Regulation and Supervision of Microfinance, written by Robert Peck Christen, Timothy R. Lyman, Richard Rosenburg
In surveying the landscape of microfinance regulation, the authors make a threshold distinction between prudential and non-prudential regulations. Prudential regulations have dual objectives, the soundness of the financial sector as a whole and the protection of individual deposits. They are typically complex, burdensome to meet and require the oversight of a central financial authority. The current discussion surrounding microfinance regulation has emphasized prudential regulations. The authors believe that in certain circumstances, however, “the most pressing issues are non-prudential – how to enable MFIs to lend legally.” (pg. 4.). Non-prudential regulations are concerned with “conduct of business” and can often be regulated by existing authorities within their respective spheres of influence. In other words, non-prudential regulations may prove adequate to the task where prudential concerns are not at issue. A non-exhaustive list of issues that can be addressed with non-prudential regulations include: permission to lend; fraud and financial crime prevention; interest rate limits; limitations on ownership, management, and capital structure; tax and accounting treatment of micofinance; and feasible mechanisms of legal transformation. This distinction is more than academic because regulations require the dedication of supervisory resources which are themselves scarce. By carefully calibrating prudential versus non-prudential matters, a government may effectively mobilize scarce resources and promote microfinance development.