by Jennifer Lee -

PAPER WRAP-UP: Morgan Stanley’s Approach to Assessing Credit Risks in the Microfinance Industry

This 13-page study thoroughly details Morgan Stanley’s internal rating methodology and approach to assessing credit risks. Morgan Stanley provides investment banking, securities, and investment management services. Developed by the firm’s microfinance-oriented business unit, the Microfinance Institutions Group (MFIG), the paper was written by Miguel Arvelo, Ju-Lie Bell, Christian Novak, Juliette Rose, and Shally Venugopal. One can find the article in the subscription-only International Corporate Governance issue of Morgan Stanley’s Journal of Corporate Finance or free of charge at the Microfinance Gateway.

by Jennifer Lee -

MICROCAPITAL STORY: Fundación BBVA para las Microfinanzas Will Acquire Edpyme Crear Tacna

The Fundación BBVA para las Microfinanzas (BBVA Foundation for Microfinance) received permission from Peru’s Superintendent of Banks, Insurance, and AFP (SBS) to acquire the Edpyme Crear Tacna. The Fundación BBVA can purchase more than 10 percent of the microfinance institution (MFI)’s capital stocks.

by Stephen Son -

MICROCAPITAL STORY: Dexia Micro-Credit Fund of Luxembourg Lends $3m to Microfinance Institution FINSOL, $2m to Microfinance Institution FUNDESER, $1.5m to Microfinance Institution Bai Tushum, and $100k to Microfinance Institution Sodruzhestvo

The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) reported that Dexia Micro-Credit Fund, a Luxembourg-based fund, issued loans of USD 3 million to FINSOL, a Honduran microfinance institution (MFI); USD 2 million to FUNDESER, a Nicaraguan MFI; USD 1.5 million to the Bai Tushum Financial Foundation (BTFF), a Kyrgyz MFI; and USD 100,000 to the Fund for SME Support Sodruzhestvo, a Russian MFI.

by Jennifer Lee -

MICROCAPITAL STORY: IDB Makes Donation to Billion Dollar Standard & Poor’s

The Inter-American Development Bank (IDB) will subsidize USD 405,000 of a Standard & Poor’s (S&P) project to develop a globally accepted rating system of microfinance institutions (MFIs). S&P is a rating service and a division of McGraw-Hill Companies. The actual funding will be by the Multilateral Investment Fund (MIF), a fund administered by the IDB to encourage private sector development of micro-enterprise in Latin America and the Caribbean (LAC).

The stated goal and rationale of this project is to increase capital flow to micro-banks. However, with MIF’s public money subsidizing a company with over USD 1 billion in annual profits, such justification is thin. Top micro-banks do not suffer from too little investment, but rather there is now far too much money chasing too few micro-banks.  Has the IDB gotten it exactly wrong?

by Sophie Kim -

MICROCAPITAL STORY: Forbes’ Special Feature on Private Investment in Microfinance Includes Top 50 Microfinance Institutions

Forbes, a American business and financial news magazine, presented the list of top 50 microfinance institutions (MFIs) of 2007 in its special feature on the private investment in the microfinance industry.

by Mary Fu -

WHO’S WHO IN MICROFINANCE: Dr. Jennifer Riria

In the microfinance industry, Dr. Jennifer Riria is internationally known first, as the chief executive officer (CEO) of Kenya Women Finance Trust (KWFT), the largest microfinance institution (MFI) in Kenya, and second, as a board member of Women’s World Banking, a global microfinance network consisting of over 53 MFIs from 30 countries.

by Mary Fu -

MICROCAPITAL STORY: Kenya Women Finance Trust (KWFT) to Transform from Microfinance Institution (MFI) into Commercial Bank

Kenya Women Finance Trust (KWFT) has begun the conversion process into a commercial bank that is expected to be completed by the end of 2008. The conversion follows the footsteps of K-Rep Bank and Equity Bank, former Kenyan microfinance institutions that were transformed into commercial banks in 1999 and 2004, respectively. According to CEO Dr. Jennifer Riria, KWFT hopes to become a “one-stop-shop” financial institution that will offer savings accounts, in addition to loans.

by Mary Fu -

MICROCAPITAL STORY: Microfinance Institution Kenya Women Finance Trust (KWFT) Officially Launches Kinga Ya Jamii, a Last-Expense Insurance Product

The Kenya Women Finance Trust (KWFT) officially launched Kinga Ya Jamii, a last-expense insurance product. Its primary purpose is to enable KWFT’s clients and their families to offset funeral expenses.

by the MicroCapital Team -

MICROFINANCE EVENT: “Microfinance Dialogue: The Next Decade” at Tufts’ Fletcher School

MICROFINANCE DIALOGUE: THE NEXT DECADE

NOVEMBER 2, 2007 – MEDFORD, MASSACHUSETTS, USA

Quite a few top thinkers in the industry will be on hand at the Fletcher School to state their positions and engage in discussion with the audience. Topics are to include:

Microfinance and the Capital Markets – Who Benefits?

What is the impact of commercial financing on microfinance? Who benefits – customers, investors, the local economy or the public at large? What is an appropriate role for policy in mediating microfinance, if any?

Microfinance and Soft Money – What Is It’s Best Use?

by Amy Rennison -

MICROFINANCE EVENT: Financial Research Associates to Host First Microfinance Conference for Institutional Investors

MICROFINANCE FOR THE INSTITUTIONAL INVESTOR; JANUARY 14-15, 2008; NEW YORK, USA

The event, hosted by Financial Research Associates, is designed to help institutional investors understand the world of microfinance and allow them to identify low-risk market-rate returns while alleviating poverty. The conference will review microfinance institutions and capital management in-depth and will cover specific topics such as microfinance rating methodology, securitization techniques and portfolio risk reduction strategies. There will be speakers and keynote presentations from some of the leading microfinance players.

by Steven Craig -

WHO’S WHO IN MICROFINANCE: Gray Ghost Microfinance Fund LLC

The Gray Ghost Microfinance Fund LLC, founded in November 2003 by Robert Pattillo, manages a for-profit investment fund comprised solely of investments in microfinance funds. Headquartered in Atlanta, Georgia, Gray Ghost, a limited liability company, manages USD 75 million in total assets. Essentially, Gray Ghost’s fund is a fund of funds. It invests in microfinance funds that supply start-up and expansion capital to microfinance institutions (MFIs) worldwide. Some of Gray Ghost’s investments include USD 4.9 million in Antares Equity Participation Fund (a fund conceived by Robert Pattillo), USD 4 million in Deutsche Bank’s Global Commercial Microfinance Consortium, USD 2 million in Catalyst Microfinance Investors, and USD 2.6 million in Bellwether Microfinance Fund.

by the MicroCapital Team -

MICROCAPITAL STORY: Commercial Microfinance Ltd. Creates Microfinance Savings Account for Ugandan Youths

Commercial Microfinance Ltd., a Ugandan microfinance institution (MFI), has unveiled a junior savings account for children in Uganda. Interest on the accounts will yield 5 percent per annum. The savings accounts’ conditions allow for withdrawal at any time and no transaction fees.

by the MicroCapital Team -

2007 List of Microbank Ratings Published by the Rating Fund

The following institutions’ rating reports have been added to the Rating Fund Website since beginning of January 2007:

– Fondo 5 de Mayo, Mexico by Micorate åö June 2006

– UCEC Pala, Tchad by PlanetRating - October 2006

– SKDRDP, India by CRISIL - January 2007

– Mahasemam Trust , India by M-CRIL - December 2006

– ProMujer Mexico by Microrate - June 2006

– Insotec, Ecuador by Microfinanza - September 2006

– Fundamic Ecuador by PlanetRating - November 2006

– FDD, Dominican Republic by Fitch Ratings åö October 2006

– FDD, Dominican Republic by Microrateåö October 2006

– FADES Bolivia by PlanetRating - July 2006

– FADES Bolivia by Fitch Ratings- December 2006

– Fundacion Alternativa, Ecuador by Microfinanza - September 2006

– CACSMM, Peru by PlanetRating - December 2006

– Banco PyME BHD, Dominican Republic by Fitch Ratings åö December 2006

You can sign up to receive the above email alert about newly published ratings by sending an email to info@ratingfund.org. The Rating Fund is a fund that subsidies performance ratings of microbanks. The fund is managed by ADA in Luxembourg, a non-profit supporting microfinance worldwide.