by Goda Thangada -

MICROCAPITAL STORY: ACCION International’s CEO Maria Otero To Be United States Under Secretary of Democracy and Global Affairs

The White House has nominated the president and CEO of ACCION International, Ms. Maria Otero, to assume the position of Under Secretary of Democracy and Global Affairs in the US Department of State. Although the Senate Foreign Relations Committee has yet to approve the nomination, Ms. Otero has indicated that she will accept the position should her nomination be successful. Ms. Otero has been profiled in MicroCapital’s Who’s Who in Microfinance series in May 2007. Her position at ACCION International will be filled temporarily by Ms. Catherine Quense, Chief Administrative Officer and Chief Deputy, while a committee searches for Ms. Oteros successor. Ms. Diana Taylor, Vice Chair of the ACCION Board, comments, “Her nomination as Under Secretary comes as no surprise to those of us who know her and her deep commitment to social and economic justice, and we know that she now has an even more effective platform from which to help build better lives for the world’s citizens.” Ms. Otero was born and raised until the age of 12 in La Paz, Bolivia, whereupon she and her family moved to Washington DC. She holds a BA in Literature from the University of Maryland and an MA in International Relations from Johns Hopkins. She has been with ACCION since 1986 and became CEO in 2000. ACCION International is a microfinance organization founded in 1961 and consisting of 27 partner microfinance institutions (MFIs) in 20 countries. The position of Under Secretary of Democracy and Global Affairs was established under Section 161(b) of the Foreign Relations Authorization Act for Fiscal Years 1994 and 1995. In total, there are five Under Secretaries of State in the Department of State, headed by Secretary Hillary Rodham Clinton.

by Ryan Hogarth -

MICROCAPITAL STORY: Challenges to Regulation of Mobile Transaction Services, E-Money, and other Branchless Banking Technologies

In March 2007, when Kenyan cellphone service provider Safaricom launched its mobile payment service M-Pesa (‘M’ for mobile; ‘Pesa’ meaning money in Swahili), it predicted the service would attract 450 thousand customers by January 2008. The service caught on, and fast. When January 2008 rolled around, M-Pesa had more than doubled its goal, registering more than 1 million users in ten months. People began using M-Pesa credits to pay for everything from well water to cab fare. According to Wired magazine, almost a third of Kenya’s population now pays their electricity bills via mobile device. M-Pesa has now registered over 5 million users, and continues to register 10 thousand more each day. As discussed in this MicroCapital article, many banks and microfinance institutions (MFIs), such as Equity Bank in Kenya, have begun to adopt cellphone cash-transfer services as a way to minimize administrative costs and penetrate markets otherwise unreachable by traditional banking. Mobile transaction services, e-money, and other branchless banking technologies have also flourished in a number of developing nations beyond Kenya, most notably Brazil, India, Peru, the Philippines, South Africa, Russia, and Colombia. However, where the rapid growth of branchless banking has sparked the imagination of many, others’ optimism is shadowed by apprehension and concern that inadequate regulation in the nascent industry may place customers’ already vulnerable finances at risk.

by Andrea Chu -

MICROCAPITAL STORY: Expanding Microfinancing in Latin America

In his article, published in British newspaper Financial Times, Jonathan Wheatley reports that, as the global banking system sinks into its worst crisis since the 1930s, there is a resurgence of interest in microfinance among Latin American banks. Several articles and papers have reported on this up and coming trend.

by Ryan Hogarth -

MICROCAPITAL STORY: The Microcredit Summit Campaign Announced that Microcredit Reached More than 106 Million of the World’s Poorest in 2007

The Microcredit Summit Campaign revealed that more than 106 million of the world’s poorest received a microloan in 2007. The finding is a product of the Microcredit Summit Campaign’s annual survey of microfinance institutions (MFIs) around the world. The 106 million are made up of individuals who, at the time of receiving their first loan, were either at the bottom half of those below their nation´s poverty line, or living on less than USD 1 per day (adjusted for purchasing power parity).

by Scott Everett -

TECHNOLOGY FOCUS: Mobile Finance – Indigenous, Ingenious or Both?

Originally reported in PCWorld by Ken Banks.

In Ghana, it’s popularly known as susu. In Cameroon, tontines or chilembe. And in South Africa, stokfel. Today, you’d most likely call it plain-old microfinance, the nearest term we have for it. Age-old indigenous credit schemes have run perfectly well without much outside intervention for generations. Although, in our excitement to implement new technologies and solutions, we sometimes fail to recognize them. Innovations such as mobile banking — great as they may be — are hailed as revolutionary without much consideration for what may have come before or who the original innovators may have been.

by Iyanna Holmes -

MICROCAPITAL STORY: UN Chief Says Bangladesh on Its Way to Becoming a Middle Income Country

UN Secretary-General Ban Ki-moon of South Korea, predicted that Bangladesh will become a middle-income country in the next 10 years on a recent visit to Bangladesh.  Addressing the media at a press conference, he reflected on a visit to Bangladesh 33 years ago and lauded the changes and achievements in economic growth, poverty reduction, family planning, educating girls, and reducing the mortality rate.  

by Iyanna Holmes -

MICROCAPITAL STORY: Freedom From Hunger Experiments With Discounted Health Care to Microcredit Borrowers to Drive Lower Default Rates

Healthy borrowers repay loans.  That is the theory underlying Freedom From Hunger’s Microfinance and Health Protection Program.  Freedom From Hunger, an international development organization that is funded by a USD 5.6 million grant from the Bill and Melinda Gates Foundation, is taking a creative approach to reducing borrower default rates.  The company has found that when loans are not repaid, health care needs are often a principal reason.  Borrowers will use loan proceeds to pay for health care needs instead of for investing in their businesses.  In 2007, the Microfinance and Health Protection Program began offering borrowers discounted doctor visits, health care savings accounts, affordable medicine, and emergency health care loans in order to combat this problem.

by Lori Curtis -

MICROCAPITAL STORY: Gates Foundation Matches Rotary and Caster Foundation to Donate $600,000 to Opportunity International

USD 600,000 was raised by a cooperation between Opportunity International, the Bill and Melinda Gates Foundation, the Caster Foundation, and Rotary Clubs throughout the USA and Canada. The fundraising effort was initiated with an offer by the Gates Foundation to match and double funds raised for Opportunity International, up to a total donation of USD 400,000 by the Foundation. Thirty-six Rotary Clubs in and around San Diego, as well as clubs in Calgary, Canada and The Caster Foundation, joined this initiative to raise a total of USD 600,000 for Opportunity International, a network of partners and institutions that facilitate microfinance, microinsurance and microsavings globally. Bink Cook, co-chair of San Diego Rotary’s Microcredit Committee spoke of Rotary’s motivation to get involved saying that this was, “an ideal opportunity to collaborate in a major program with global impact“. The funds will be distributed by Opportunity International as microloans through their lending facilities in Ghana, where they have 117 thousand active clients and have already loaned USD 98.8 million. Opportunity International currently operates in ten African countries.

by Ryan Benson -

MICROCAPITAL STORY: Bangladesh-based ASA to Allocate Funds from Historic $150m Equity Deal Toward Microlending Outside Bangladesh

ASA International, a holding company managed and partially owned by ASA, one of Bangladesh’s largest NGOs, has announced it will use USD $150 million of equity raised from foreign investors to expand commercial lending outside Bangladesh.

by Anthony Busch -

MICROCAPITAL STORY: The Netherlands Development Finance Company (FMO) Lends $1.1m to Fundación Internacional para la Asistencia Comunitaria de Guatemala (FINCA Guatemala)

The Consultative Group to Assist the Poor (CGAP) reports in its list of recent transactions that the Netherlands Development Finance Company (FMO) financed USD 1,103,100 in loans to Fundación Internacional para la Asistencia Comunitaria de Guatemala (FINCA Guatemala) on January 21, 2008.