MICROCAPITAL STORY: The Rotarian Action Group for Microcredit (RAGM) Promotes Worldwide Rotary Involvement in Microfinance at Last Month’s 2008 Rotary International (RI) Convention by Hosting Phil Smith (Author of A Billion Bootstraps) Christopher Crane (CEO of Opportunity International), and Lynn McMullen (Co-founder of the Global Democratic Citizens Union)

Last month—June 15th through the 18th—Rotary International (RI), a service organization with 1.2 million members in over 32,000 clubs located in more than 200 countries, held its annual convention, which was attended by more than 19,000 Rotarians, participants of Rotary youth programs, and other guests. With a larger emphasis than ever before in the organization’s history, microcredit was promoted as an attractive cause for Rotarians around the world to support by establishing sustainable microfinance projects and partnering with existing microfinance institutions (MFIs). Behind the push is the Rotarian Action Group for Microcredit (RAGM), a voluntary association of Rotarians aiming to educate the general membership, standardize Rotarian/MFI partnerships, and ultimately increase Rotarian involvement in microfinance activities for the long-term.

MICROCAPITAL STORY: Netherlands-based Oikocredit Invests $2.8m in Cambodian Microfinance Institutions Hatha Kaksekar Ltd and AMRET

CGAP (Consultative Group to Assist the Poor) recently reported that Dutch-based Oikocredit made investments in two Cambodian microlenders: a  USD 1.28 million loan to HKL (Hatha Kaksekar Ltd) and a USD 1.55 million equity investment in AMRET.

MICROCAPITAL STORY: European Bank for Reconstruction and Development (EBRD) Doubles Support for Bosnian Microfinance Institution Mikrokreditna Organizacija EKI With Second $9m Loan

The European Bank for Reconstruction and Development (EBRD) is providing a new EUR 6 million (USD 9.1 million) loan to Mikrokreditna organizacija EKI (EKI), the third-largest microfinance institution in Bosnia and Herzegovina (BiH). The loan, which will be on-lent by EKI, is funded by the EUR 75 million (USD 114 million) EBRD Micro, Small and Medium Sized Enterprises Finance Framework for the Western Balkans and Croatia, which aims at facilitating access to finance for smaller business clients.

WHO’S WHO IN MICROFINANCE: MicroCredit Enterprises

MicroCredit Enterprises is a non-profit organization based in Sacramento, California, that leverages private capital to promote micro-enterprises throughout the developing world by issuing loans and guarantees to creditworthy microfinance institutions (MFIs). Founded in 2005, MicroCredit Enterprises’ loan portfolio includes 17 MFIs in 12 countries, impacting 235,000 poor people. The balance of total loans issued is USD 9.3 million and MicroCredit Enterprises’ current loan default rate is 0.00%. The organization has a low operating expense, with approximately 3% of its loan portfolio or USD 300,000 allocated to budgeted expenditures. The low operating expense is possible since MicroCredit Enterprises’ senior management team, with the exception of the Senior Vice President for Portfolio Management, serve the organization on a pro bono basis.

MICROCAPITAL STORY: Citi Foundation and Pakistan Poverty Alleviation Fund Announce 2007 Micro-entrepreneurship Awards Program in Pakistan to Highlight Microfinance

The Pakistan Poverty Alleviation Fund (PPAF), a Pakistani organization dedicated to assisting poor and rural communities in Pakistan, and Citi Foundation, a philanthropic outreach arm of Citigroup, announced they will hold for the third consecutive year an awards program dedicated to micro-entrepreneurship. The program, “Citi-PPAF Microentrepreneurship Awards Programme 2007,” will recognize the efforts made by micro-entrepreneurs to improve the quality of life for their families and their communities. It is designed to demonstrate the impact of microfinance on micro-entrepreneurs and poverty reduction.

PRESS RELEASE: Early Bird Deadline is approaching for the 2007 World Credit Union Conference

Madison, WI—The deadline for Early Bird Registration for the 2007 World Credit Union Conference in Calgary, Canada is May 19, 2007. With engaging keynote speakers and exciting pre and post tours, the conference will provide attendees with an unforgettable credit union experience.The 2007 World Credit Union Conference will be held in Calgary, Alberta, Canada on July 29— August 1. Participants can register for the conference, sign up for tours and reserve accommodations at www.woccu.coop/ ca lgary07. Michael Treacy, author of Double-Digit Growth and The Discipline of Market Leaders, has joined the line up of distinguished keynote speakers. In his most recent work, Mr. Treacy has devised a common sense approach for achieving superior profitable growth. He has transformed businesses of all types around the world by aiding senior managers to tackle their greatest strategic challenges. Other keynote speakers include Stephen Lewis, former United Nations Special Envoy on HIV/AIDS; Grzegorz Bierecki, one of the ten most influential people in Poland and President of the National Association of Co-operative Savings and Credit and Martin Eakes, CEO and co-founder of Self-Help Credit Union.Spaces are still available on the tours surrounding the conference. The pre-conference tour to Banff will enable participants to experience the spectacular natural beauty of the Canadian Rockies. The post-conference tour to Quebec City will provide the venue for participants to step back in time and taste the flavor of Canada’s most historic city. Tours in and around Calgary will offer companions opportunities to explore during the conference days. Visit www.woccu.coop/ca lgary07 for more information about the 2007 World Credit Union Conference. New hotels have been added to provide quality and convenient accommodations for all conference attendees. Hotel space and conference attendance are limited. Early registration is encouraged. Information provided by World Council of Credit Unions, Inc. World Council is the apex trade association and development organization of the international credit union system. It promotes the sustainable growth of credit unions and financial cooperatives across the globe. As instruments of economic and social development, World Council, its regional confederations, and national member organizations in 92 countries with 42,616 member credit unions serve more than 157 million people worldwide. Contact Person: Janette KlaehnOrganization: WOCCUPhone Number: (608) 231-8123E-mail: jklaehn@woccu.orgSource: World Council of Credit Unions (WOCCU)http://www.woccu.org/press/press_rel/pressr.php?pressr_id=1352

Microfinance Networks (wholesale transnational): Defined and Listed

Microfinance “networks” facilitate financial services to the poor by offering support to lower-level partners. The term “network” refers to the main organization and its partner organizations as a whole. The diversity of network structures makes a precise definition difficult, and herein we only define and list what we call “wholesale networks” defined as transnational, not national or regional, partnerships.

Adding to the challenge of a clean definition, some organizations such as ACCION and Credit and Savings for the Hard-Core Poor (CASHPOR) simultaneously exist as individual institutions as well as a network of secondary partners.

Unfortunately, much of the confusion about networks is self-imposed. Donors prefer to give to actual micro-lenders “where the rubber hits the road”, not supporting organizations. Networks at times present the aggregate micro-banking activities of their partners with the implication that they themselves actually provide microfinance services. Another opaque outcome generated by the counter-incentives inherent to donation-driven “development aid”.

Twenty-one second-tier networks are listed below. Fourteen of those are based in North America, one in South America, one in Asia, one in Australia, and four in Europe.

“Networks” can be grouped broadly in four ways: 1) Degree to which they provide technical support, 2) Extent of ownership over partners (0-100%), 3) whether they invest in partners through loans or equity (or both), and 4) amount of donor cash inflow (private or public) to secondary partners (p. 8).

Microfinance networks are either involved only within the microfinance industry and/or in multi-sector development. The World Savings Bank Institute (WSBI) focuses on microfinance and business development services for instance, while Catholic Relief Services “works in microfinance, community health, education, and emergency response among other development sectors.” (p. 4). With the exception of ShoreCap International, a subsidiary of Shore Bank in Chicago, all of the networks listed below are non-profit organizations.

Numerous subcategories further clarify distinctions between networks—this information appears in the article, “What is a Network? The Diversity of Networks in Microfinance Today.” Broadly speaking however, “NGOs, cooperatives, non-bank financial institutions, MFIs, and banks,” may all be part of a network. While some of these organizations were simply strengthened by higher-level partners, many were formed by them. Mennonite Economic Development Associates (MEDA) for example, both supports existing institutions and creates others.

Due to the diverse roles different networks play, microfinance institutions may belong to multiple networks such as SHARE Microfinance, Ltd. of India. Being a member of both Women’s World Banking (WWB) and Credit and Savings for the Hard-Core Poor (CASHPOR) allows SHARE global “exposure to microfinance innovations and new products,” as well as access to technical support. While belonging to several networks enables MFIs greater information and support services, including capital, most networks limit their membership by exclusively backing their own member partner in a particular country.
WHOLESALE TRANSNATIONAL MICROFINANCE NETWORKS:

ACCION, US
Catholic Relief Service (CRS), US
Developpement International Desjardins (DID), Canada
Finca International (FINCA), US
Freedom from Hunger (FFH), US
Mennonite Economic Development Associates (MEDA), Canada
Opportunity International, US
Pro Mujer, US
Save the Children, US
ShoreCap International, US
Unitus, US
Women’s World Banking (WWB), US
World Council of Credit Unions (WOCCU), US
World Vision, US
International Network of Alternative Financial Institutions (INAFI), Costa Rica
Credit and Savings for the Hard-Core Poor (CASHPOR), Malaysia
Banking with the Poor Network (B.W.T.P.), Australia
Ecumenical Church Loan Fund International (ECLOF), Switzerland
PlaNet Finance, France
Microfinance Centre for Eastern Europe and the New Independent States, Poland
World Savings Bank Institute (WSBI), Belgium