Swarna Pragati Housing Microfinance Limited, an Indian housing finance institution, has launched a housing microfinance product in the central-Indian state of Maharashtra. Swarna Pragati plans to disburse INR 30 million (USD 652,000) in loans to 100 self-help groups (SHGs) in an effort to reach 500 beneficiaries, particularly poor women in underserved rural areas [1]. Swarna Pragati aims to use existing networks of SHGs and other local organizations to identify clients and service the loans [1].
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MICROCAPITAL BRIEF: Grameen Foundation Announces Increased Focus on Human Capital Management Practices in India
Grameen Foundation, a US-based nonprofit, has announced that it will increase its efforts to improve human capital management strategies at socially-focused microfinance institutions (MFIs) in India with USD 550,000 in funding from Citi Foundation, the charitable arm of global financial services provider Citigroup; The McGraw-Hill Companies, a US-based owner of rating agency Standard and Poor’s; and The Capital Group, a US-based group of investment management companies [1].
MICROCAPITAL BRIEF: Indian Budget Plans Include Partnering with Small Industries Development Bank of India (SIDBI) to Create $22m India Microfinance Equity Fund
The Indian government began review of a draft 2011-2012 budget, which reportedly includes a partnership with the Small Industries Development Bank of India (SIDBI), a government-owned bank providing credit to microfinance institutions, to allocate funds totaling approximately INR 100 crore (USD 22 million) to traditionally underserved groups via a newly established India Microfinance Equity Fund.
MICROCAPITAL BRIEF: Microfinance Institutions Network (MFIN), High Mark to Launch Credit Bureau in India
Microfinance Institutions Network (MFIN), a self-regulatory organization of the Indian microfinance sector, is collaborating with High Mark Credit Information Services Limited, a private credit reporting agency based in India, to establish a tracking system to share client data among MFIN members.
MICROCAPITAL BRIEF: ACCION International Issues Credit Guarantees Totaling $1.5m to Indian Microfinance Institutions (MFIs) Swadhaar FinServe, Saija
ACCION International (ACCION), a private, US-based nonprofit organization with a global network of microfinance institutions (MFIs), recently issued two standby letters of credit (SBLC) totaling USD 1.5 million for two of its Indian partner microfinance institutions (MFIs) to secure loan facilities.
MICROCAPITAL BRIEF: Federal Microfinance Bill May Replace Existing State Microfinance Legislation in India
The Ministry of Finance in India recently unveiled its plan to pass a new microfinance bill to regulate the microfinance sector. The ordinance passed by the government of the Indian state of Andhra Pradesh in October 2010, in response to a series of farmer suicides, severely curtailed lending activity in the region. The bill, which is reportedly being drafted along the lines of the recommendations made by the Reserve Bank of India’s Malegam Committee which was formed in the wake of the unrest in Andhra Pradesh, is likely to render state legislation on microfinance null and void.
MICROCAPITAL BRIEF: For-profit Microfinance Institution (MFI) BASIX Group Negotiating $166m Loan from Consortium of Banks Led by Small Industries Development Bank of India (SIDBI)
BASIX Group, a for-profit microfinance institution (MFI) based in India, is currently involved in negotiations with a consortium of banks led by Small Industries Development Bank of India (SIDBI), an Indian government-owned bank providing credit to medium and large-scale MFIs, to receive a INR 7.5 billion (USD 166 million) loan largely intended to restructure the existing debt of BASIX.
MICROCAPITAL BRIEF: Centre for Micro Finance of Institute for Financial and Management Research (IFMR) and College for Agricultural Banking of Reserve Bank of India (RBI) Publish Joint Study on Remittance Channels
The Centre for Micro Finance at the Institute for Financial and Management Research (IFMR), a think-tank established in India, and the Reserve Bank of India’s College for Agricultural Banking, a training college for the central bank of India, recently published a report on the trends in domestic money transfers by Indian migrant workers.
MICROCAPITAL BRIEF: India’s Andhra Pradesh State to Tighten Local Microfinance Institutions (Regulation of Moneylending) Act
The government of the Indian State of Andhra Pradesh reportedly is set to alter the Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act, which was enacted December 2010 in response to complaints of high interest rates and coercive loan recovery, by replacing the term “self-help group (SHG) women” with “below poverty line (BPL) households” [1] [2]. According to unspecified sources at the Andhra Pradesh Chief Minister’s Office, the purpose of the replacement is “to ensure that MFIs adhere to the existing stringent rules” by “bringing all kinds of MFI loan products, existing and future, under the purview of the Act [1].”
MICROCAPITAL EVENT: Re-engineering Microfinance: Need for New Products & Policies, New Delhi, India, March 15-16, 2011
Event Name: Re-engineering Microfinance: Need for New Products & Policies
Event Date: March 15 & March 16, 2011
Event Location: Hotel Ashok, New Delhi, India
MICROCAPITAL BRIEF: Vijay Mahajan of Indian Microfinance Institution (MFI) BASIX Undertakes 75-Day Journey Across 12 Indian States to Gain Feedback From Poor People
Vijay Mahajan, chairman of Indian for-profit microfinance institution (MFI) BASIX, began a 75-day journey in January 2011 on foot, public transport and car across 12 Indian states to obtain direct feedback from poor people on the effect of microfinance on their lives. Mr Mahajan began his journey amidst criticism that BASIX charges unreasonably high interest rates.
MICROCAPITAL BRIEF: Indian Microfinance Institution Grameen Koota Raises $8m through Nonconvertible Debentures
Grameen Koota, a division of Grameen Financial Services Private Limited, has raised INR 35 crore (USD 7.71 million) of debt capital through the issuance of secured, redeemable, nonconvertible debentures (NCDs) to Developing World Markets Limited, a member of US-based asset manager and investment bank Developing World Markets (DWM) Group.
MICROCAPITAL BRIEF: Vikram Akula of SKS Microfinance Views Recommendations of Reserve Bank of India (RBI) Malegam Committee as Boost to Microfinance
Vikram Akula, chairman of SKS Microfinance, a for-profit microfinance institution (MFI) in India, has stated that the recommendations released by the “Malegam Committee” of the Reserve Bank of India (RBI) in response to unrest in microfinance in the Indian state of Andhra Pradesh, would give a boost to the microfinance sector by further encouraging bank lending to MFIs. Mr Akula also stated that the proposed microloan interest rate cap of 24 percent would not impact SKS Microfinance as its lending rate falls below the cap, but that it would impact smaller institutions that are yet to achieve efficiencies of scale. He viewed this recommendation as a measure to encourage consolidation within the sector.
MICROCAPITAL BRIEF: Indian Bank to Increase Number of Microfinance Branches to 60 by March 2012
Indian Bank, which was established in 1907 and is owned by the government of India, recently announced plans to expand its microfinance network by opening 28 new microfinance branches, bringing the total to 60 by March 2012.
MICROCAPITAL BRIEF: Indian Microfinance Leaders Comment on $250m Asian Development Bank (ADB) Guarantee Initiative for Asia and the Pacific
Representatives of the Indian microfinance industry recently commented on the likely impact of the USD 250 million Asian Development Bank (ADB) initiative that will offer guarantee facilities to banks that loan to microlenders in the Asia-Pacific region, as was covered by MicroCapital.org on December 22, 2010 [2].
MICROCAPITAL BRIEF: Malegam Committee Report on Microfinance Regulation in India Fails to Meet Expectations, Argues Sriram
On the website “livemint.com”, an Indian partner of the US-based Wall Street Journal, independent researcher MS Sriram presented his evaluation of the recommendations issued in response to the crisis in the microfinance sector in Andhra Pradesh by the Malegam Committee of the Reserve Bank of India (RBI). While he argues that the report has some positive aspects, he states that it largely fails to deliver.
MICROCAPITAL BRIEF: As Commercial Banks Remain Wary, Indian Microfinance Institutions (MFIs) Look Beyond Andhra Pradesh for New Markets
Following the promulgation of the Andhra Pradesh Micro Finance (Regulation of Money Lending) Act, which includes provisions intended to curtail coercive collections practices by microfinance institutions (MFIs) and their agents, many MFIs are considering cutting back their operations in Andhra Pradesh in favor of seeking expansion in other prospective markets [1].
MICROCAPITAL BRIEF: Freedom from Hunger Microfinance and Health Protection (MAHP) Initiative Reaches Peru, Vietnam, Cambodia; Expands in India
US-based nonprofit Freedom from Hunger recently announced that, since the completion of its Microfinance and Health Protection (MAHP) initiative in December 2009, it has replicated the program in Peru, Vietnam, Cambodia and additional communities in India.