Produced by Microfinance Information Exchange, Inc. (MIX) and Intellecap, March 2009, 20 pages, available at: http://www.themix.org/sites/default/files/2008%20Asia%20Microfinance%20Analysis%20and%20Benchmarking%20Report.pdf
The “Asia Microfinance Analysis and Benchmarking Report 2008” analyzes the evolution of the microfinance industry in South Asia and East Asia and the Pacific (EAP), with a focus on outreach and scale, funding sources, and financial performance in fiscal year (FY) 2007.
Venture Intelligence, a Chennai-based company that tracks investments deals, reports that there were 11 private equity investments worth USD 178 million into the Indian microfinance sector in the fiscal year ended March 2009, a 242 percent increase versus the three deals worth USD 52 million in the 2008 fiscal year. According to the report on mydigitalfc.com, private equity investments into the Indian microfinance sector began in January 2007.
Dr. Ela Ramesh Bhatt is the founder of the Self-Employed Women’s Association (SEWA), a development organization based in India dedicated to the economic empowerment of the poorest and most oppressed women in India. A lawyer by training, Dr. Bhatt is widely respected among the international labor, cooperative, women, and micro-finance movements and is also one of the founders of Women’s World Banking, the New York based global network of microfinance providers and banks dedicated to ‘expanding the economic assets, participation and power of poor women’ by providing them access to finance, knowledge and markets.
Source: Grameen Capital
Source: Radio Australia
Muhammad Yunus, the Nobel Laureate who made microfinance a success in Bangladesh, has warned of the pitfalls for microfinance institutions relying on foreign money. The comments, reported by The Hindu Business Line, came at the recent Sa-Dahn National Microfinance Conference 2009 in New Delhi, India.
According to S. Dilli Raj, CFO of SKS Microfinance, the first securitized deal by an Indian MFI has received the highest rating (P1+SO; very strong safety) by CRISIL (A Standard & Poor`s company). CRISIL assigned a very strong safety review based on an analysis of over 1 million loans that were extended by SKS Microfinance Private Limited. Also, the series of recent transactions concluded allows YES Bank to purchase 14,850 micro loans that have been extended to unbanked and minority families as identified by the Reserve Bank of India (RBI) as “weaker sections” The transactions covers roughly 400,000 micro loan borrowers (average loan size USD 178 dollars) and spans across three microfinance institutions (MFIs).
Bandhan, an Indian microfinance institution, has sold Rs 180 crore (USD 35.4 million) worth of farm loans to several Indian commercial banks including Punjab National Bank (PNB), IndusInd Bank, Development Credit Bank (DCB), and Kotak Mahindra Bank, according to a report in the Economic Times.
Source: The Economist.
National Conference on Creating a Microfinance Ecosystem: Challenges and Balanced Growth
March 31, 2009, New Delhi, India
Sa-Dhan, an association of community development financial institutions in India, is organizing the National Microfinance Conference 2009 focusing on the theme ‘Microfinance Ecosystem: Equilibrium between Growth and Effectiveness’. The day long event will be held at the Ashok Hotel in New Delhi, India on March 31, 2009. The conference is an effort to help facilitate the growth process of Sa-Dhan’s member organizations and other government agencies in India through collective learning opportunities, focusing on the means to overcome issues plaguing the microfinance sector in India. Issues include the commercialization of microfinance institutions (MFIs), governance, risk management, provision of holistic microfinance services (like savings, microinsurance, livelihood, etc), resource mobilization and credit crunch and cost of services.
Hyderabad-based SKS Microfinance announced that it aims to raise one-tenth of its USD 963.6 million borrowing plan for the next fiscal year through USD 96.4 million worth of securitization deals with financial institutions. The announcement was made shortly after SKS sold USD 4.8 million non-convertible debentures (NCD) with YES Bank and generated another USD 4.8 million through the issuance of commercial paper (CP). Last month, SKS solidified a USD 38.5 million securitization deal with India’s second largest bank, the Industrial Credit and Investment Corporation of India (ICICI). These deals come as SKS strives to finance a loan portfolio that is growing at one of the fastest rates among microfinance institutions (MFIs) in the world.
SKS Microfinance, the largest microfinance provider in India in terms of assets, is planning to launch operations in China, in a move to expand its reach beyond India. According to a press release on The Economic Times, SKS reckons this would be the ideal time to enter the Chinese market. The export driven Chinese economy has been impacted by the global meltdown and several vocationally-trained rural employees in China have lost jobs. SKS plans to give credit to these unemployed groups in China and help them start their own ventures. In this regard, the release quoted the chief executive officer and managing director of SKS Microfinance, Mr. Suresh Gurumani as saying that SKS was looking to expand in China primarily because it was a ‘large country with a significant population that was poor’. Mr. Gurumani also stated that the expansion was a move to share SKS’ knowledge in the field of microfinance to benefit ‘a larger section of people’. SKS’ foray into China would make it the first overseas expansion for an Indian microfinance institution (MFI).
Grama Vidiyal Microfinance Ltd (GVM) is in talks with private equity firms to raise INR 500 million (USD 9.7 million) to fund a proposed expansion that includes establishing branches in neighboring states as well as recruiting 700 more employees. We currently do not have any information as to which private equity funds have been approached for funding. Founded in 1993 and based in Tamil Nadu, India, Grama Vidiyal Microfinance Ltd is a non-governmental microfinance institution. As of March 2008, its total gross loan portfolio is USD 28.7 million, total assets USD 30.8 million, and total equity USD 4.8 million.
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.
Source: US Banker.
AllAfrica.com reported that Salim Saleh, the current Ugandan State Minister for Microfinance announced that the Government of Uganda (GoU) has set aside 262 billion shillings (or USD 133.7 million) to be delivered as subsidized low-interest loans through the Microfinance Support Center (MSC), to Savings and Credit Cooperative Societies (SACCO), to individuals and small businesses. MSC is a government owned limited liability company set up to aid in management of rural microfinance. The announcement was made at the launch of the MSC’s five-year strategic plan. “This company has 40 billion shillings (USD 20.4 million) for the next five months and it can loan out 9 billion shillings (USD 4.6 million) each month,” said Mr. Saleh. This budget is up from January when MSC Director, Mr. Mutebi Kityo announced that the company was prepared to loan out USD 3.5 million by February 10. Financial information is not available regarding MSC’s previous activities.
Financial Information Network and Operations Ltd. (FINO), an Indian technology company that produces biometric smartcards, collaborated with the National Cash Register Corporation (NCR), the automated teller machine (ATM) manufacturing company, unveiled a new micro depository machine in Mumbai called the EasyPoint 70 Tijori. As part of the partnership, FINO has committed to release 1000 of the machines, and has reported to have already reached an accord to roll-out an additional 30 thousand machines over the next five-years. However, the company has not specified who will buy the machines. The machine is designed for semi-urban and rural areas, which are traditionally underserved by banks. It is estimated that 560 million people in India (about 51 per cent of the population) are financially underserved. The companies hope to reach 25 million unbanked people with the EasyPoint 70 Tijori by 2011.