The government of India and the Asha Community Health and Development Society, in conjunction with the Life insurance Corporation of India (LIC), and public sector banks Andhra Bank, Bank of India, Canara Bank, Indian Overseas Bank, Punjab National Bank, State Bank of India, Syndicate Bank, UCO Bank and Vijaya Bank recently launched a Pilot Microcredit Scheme. The plan will allow slum dwellers in southern Delhi’s Ekta Vihar slum to apply for loans from the participating banks, with a fixed interest rate. It will also start an initiative that aims to connect every family in the area with a “no frill” bank account, extended financial services and affordable life insurance from LIC. MicroCapital recently reported on the LIC’s initiatives in expanding its micro-insurance services here.
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NEWS WIRE: United States: Forbes Reports on “Mobile Microfinance,” Citing Providers Obopay, mChek
Source: Forbes.
PRESS RELEASE: Overseas Private Investment Corporation (OPIC), World Bank Member International Finance Corporation (IFC), Palestine Investment Fund, Bank of Palestine Partner on Housing Finance for the Poor in West Bank and Gaza
Source: International Finance Corporation (IFC).
PIONEERS IN MICROFINANCE: Ron Grzywinski and Mary Houghton of ShoreBank – Part II
Based on the great response to yesterday’s profile on Mr. Grzywinski and Ms. Houghton, we are offering the following transcript of our interview to give you more of the visionaries’ own words:
MicroCapital: Was there anything particular in your upbringing or background that stimulated you towards this form of career in social investment?
RG: The four of us came together in the late 1960s for the purpose of doing small business loans in inner-city neighborhoods in Chicago after they had experienced dramatic racial change and the beginnings of deterioration. That’s how it all started. The four us included two African-American men, Mary and myself, who got along quite well and who were highly motivated by our work. We had the idea to create what eventually became ShoreBank, a corporation that was totally developed using private sector resources for the purpose of doing development amongst people who have fewer resources. We bought what was then the South Shore Bank in August 1973 and three of the four of us started working here after that time. For the first 10 years or so that’s all we did. We were invited in 1983 through the Ford Foundation to go to Bangladesh and to work with Yunus when he was getting a bank charter. So that’s the background. I think the motivation for me was the opportunity to use the resources that I managed as a banker to achieve social objectives and that has continued ever since, but just with more places and more and more opportunities.
MC: At that time being bankers who wanted to do social investment must have been quite unusual.
MICROCAPITAL STORY: Treasure Microfinance Bank (TMFB) to be Launched February 26 in Lagos, Nigeria, and to Seek Listing on Nigerian Stock Exchange (NSE)
Dr. Tunde Ayeye, Chairman of the newly licensed Treasure Microfinance Bank (TMFB) headquartered in Lagos, Nigeria, announced on Tuesday that the bank will be officially launched on February 26th, 2008. According to Chairman Ayeye, the bank has secured NGN 50 million, equivalent to USD 432,000, of start-up capital and plans to reach NGN 1 billion (USD 8.6 million) within one year and become a listed company on the Nigerian Stock Exchange (NSE). TMFB does not report to the MIX Market, the microfinance information clearinghouse, and the Central Bank of Nigeria’s (CBN) listing does not provide any additional financial information. However, the CBN does report that TMFB is a registered microfinance bank since February 1st, 2008 and that it was formerly known as the Oja Odan Community Bank. Previous reporting on TMFB by MicroCapital can be found here.
NEWS WIRE: Sudan: Southern Region Outlaws Islamic Microfinance Lending, Three Banks Close Operations Rather Than Convert
Source: Reuters.
MICROCAPITAL STORY: International Finance Corporation (IFC) signs a partnership agreement with WIZZIT Bank, introducing microfinance services to the poor through their mobile phones.
International Finance Corporation (IFC), a member of the World Bank Group, has signed a partnership agreement to take a 10 percent equity stake in WIZZIT Bank, a division of South African Bank of Athens Limited that specializes in banking services to the poor through mobile phones.
MICROCAPITAL STORY: State-owned Indian Bank of Baroda (BoB) Partners with Centre for Micro Finance (CMF) for Microfinance Initiative in Dungarpur
As part of its initiative to reach the unbanked Indian population with microfinance, state-owned Bank of Baroda (BoB) has signed a memorandum of understanding (MoU) with the Centre for Micro Finance (CMF), a microfinance research institute. As of March 2007, the Bank of Baroda had 38,000 employees and 2,700 branches in 21 countries. It had USD 36.4 billion (INR 143,146 crore or 1.43 trillion) in total assets and a return on assets (ROA) of 0.72 percent.
MICROCAPITAL STORY: 3 Million More Rural People to Benefit from Smartcard Technology That Enables Microfinance in India
The Government of Andhra Pradesh in India has proposed to roll out Smartcard technology to a further 3 million rural people in 8 districts in the state, giving them access to a bank account for the first time. The Smartcard technology provides access to banking facilities for low-income groups in areas without existing financial services infrastructure.
MICROCAPITAL STORY: Indian Government-owned Bank of Baroda to Establish Microfinance Division
The Bank of Baroda, a state-owned Indian bank, plans to establish a microfinance division as part of its strategy to service the rural areas of India that are largely unreached by financial institutions, according to Chairman and Managing Director of Bank of Baroda, Anil K. Khandelwal. As of March 2007, the Bank of Baroda had 38,000 employees and 2,700 branches in 21 countries. It had USD 36.4 billion (INR 143,146 crore or 1.43 trillion) in total assets and a return on assets (ROA) of 0.72 percent.
Who’s Who in Microfinance: BlueOrchard Microfinance Investment Managers
BlueOrchard Microfinance Investment Managers is an asset manager specialized in microfinance. The fund is based in Switzerland and was founded in 2004.
Leadership includes:
Jack Lowe, Chief Executive Officer, holds an MBA in Finance from Stanford University. Before coming to BlueOrchard, Mr. Lowe opened several franchise businesses in Europe, including McDonald’s in Switzerland and Midas in France. He later sold these businesses, became a partner at Montgomery Securities. After Montgomery was sold to Bank of America, Mr. Lowe acquired several medium side businesses in Europe and other emerging markets.
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Paper Wrap Up: Mobile Phone Banking and Low-Income Customers: Evidence from South Africa
By Gautam Ivatury and Mark Pickens, published by the Consultative Group to Assist the Poor/The World Bank and the United Nations Foundation, Nov 2006, 19 pages, download here: http://www.cgap.org/publications/mobilephonebanking.pdf
This paper reports on a study designed by the Consultative Group to Assist the Poor (CGAP), an NGO which was founded by several multilateral agencies, international financial organizations and interested private organizations to promote the development of financial services for the poor. The study was funded by the United Nations Foundation, a public charity which supports private-public partnerships, and the Vodafone Group Foundation, a charity founded by the mobile phone company Vodafone. The study was based on a survey of 515 low-income South Africans, 215 whom used the mobile phone-based banking (m-banking) service, WIZZIT, and 300 who did not. The first section of the paper introduces WIZZIT, which is a division of the South African Bank of Athens, specifically targeting South Africa’s “unbanked population.” It was launched in December 2004 and currently has 50,000 customers. The m-banking accounts allow customers to make bill payments, check their account balances, and make transactions using their mobile phones. Additionally, the customers are provided with debit cards which they can use to withdraw money from any ATM. Customers are able to make cash deposits into their account at all Absa Bank and Postbank locations. WIZZIT accounts have no minimum balance requirements and charge a per-transaction fee. The second section of the paper reports the findings of the survey. The authors note that low-income customers are pleased with WIZZIT’s service because it is safe, convenient, fast, and cheaper than alternative banking methods. The data also showed that WIZZIT’s low-income customers were better off, as well as more financially sophisticated than low-income non-users prior to using the service. Both customers and non-customers said they were willing to try new technology, but human interaction was still important to them. Finally, the study showed that most non-users had not heard of WIZZIT. The third, and final, part of the paper draws general conclusions from the research findings. It encourages other m-banking providers to build greater awareness of their services and emphasizes the ability of m-banking to provide financial services to the poor in developing countries.
By Drew Rifkin
Sudan and World Bank Establish $50 Million Microfinance Fund
The Central Bank of Sudan (CBS) and World Bank launched a $50 million microfinance fund. The money will be used to grow local microfinance institutions and establish a microfinance department within CBS. A particular focus will be put on areas that have been hit hard by civil war and famine, such as the Darfur region.
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