Nokia, a Finnish telecommunications company, is partnering with microfinance institutions (MFIs) to allow rural residents in the Indian states of Punjab and Haryana to use microloans to buy mobile phones. The company has already formed partnerships with several microfinance MFIs in the area, including SKS Microfinance, which is based in Hyderabad; Ujjivan, which maintains offices in Bangalore, Delhi, Kolkata and Pune; and Madura Microfinance, headquartered in Adyar. The payment scheme for the use each mobile phone will be as low as INR 100 (USD 2.14) per week.
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MICROCAPITAL BRIEF: Microfinance Institutions Network (MFIN) Aims to Increase Accountability in India with Appointment of Ombudsmen
An article from Business Standard, a business newspaper based in India, reports that the Microfinance Institutions Network (MFIN) of India, a self-regulated network organization of 39 microfinance institutions (MFIs) in India, will appoint four regional ombudsmen in the next three months to encourage transparency in the microfinance sector. While specific duties of the proposed regulators were not provided, MFIN stated that no appointees would be from MFIs.
MICROCAPITAL BRIEF: Microfinance Institution in India, SKS Microfinance, Reports NCDs, Commercial Paper Will Help Cut Lending Rates by 200 Basis Points
In a release from IndiaMicrofinance.com, it is reported that SKS Microfinance, an Indian microfinance institution (MFI) which claimed assets of USD 596 million for 2009, will be able to lower its retail lending rates by 200 basis points to 26.3 percent by lowering its costs of funds through the issuance of non-convertible debentures (NCDs) and commercial paper.
MICROCAPITAL BRIEF: Microfinance Institution Tuba Rai Metin Grows in Timor-Leste with Consulting from BASIX Group of India and Support from the INFUSE Program of the United Nations and Australian Agency for International Development (AusAID)
A press release from the United Nations Development Program (UNDP) reports that the microfinance institution (MFI) Tuba Rai Metin (TRM) is quickly growing in Timor-Leste. TRM, which was started in 2002, has reportedly enlarged its client base by 25 percent since the start of 2010. TRM provides loans and savings services to over 3,000 clients, 100 percent of which are women. According to the MIX Market, the microfinance information clearinghouse, TRM had total assets of USD 753,000, a gross loan portfolio of USD 437,000 and 2,838 borrowers as of 2009.
MICROCAPITAL BRIEF: Bharti AXA General Insurance Predicts 70 Percent Rise in Turnover from Collaboration with Indian Microfinance Institutions Anjali Microfinance and Arohan Financial Services
In a release from BusinessStandard.com, an online publication of business news in India, it was reported that Bharti AXA General Insurance, an Indian insurance provider, predicts its turnover will increase 70 percent in the next fiscal year, 2010-2011 as a result of distributing its products through microfinance institutions (MFIs). While it is cited that more than 55 percent of the company’s premium revenue comes from motor insurance, it predicts expansion in the microinsurance sector will boost overall revenue.
MICROCAPITAL BRIEF: Vishwavir Ahuja Joins Board of Ratnakar Bank, a Commercial Bank in Kolhapur, India
Vishwavir Ahuja, the former CEO of the Indian division of Bank of America, has joined the board of Ratnakar Bank, a community bank based in rural Kolhapur, as an independent director. According to Mr Ahuja, he hopes to transform the “relatively-unknown rural bank into a major player with a focus on inclusive growth.” Some have speculated that Mr Ahuja’s position on the board will lead to a greater influx of funding through unspecified “connections” with investors at Mumbai-based Centrum, a financial services firm established in 1977.
MICROCAPITAL BRIEF: Grameen Capital India Appoints Sanjay Nayar as New Director
Sanjay Nayar, the CEO of Kohlberg Kravis Roberts & Co (KKR) – a global alternative assets manager – has been named to the board of directors of Grameen Capital India, a Mumbai-based social business that promotes growth in the microfinance sector in India. Prior to joining KKR, Mr Nayar was the CEO of Citigroup India and South Asia.
MICROCAPITAL BRIEF: Microloan Default Risk Rises in India as SKS Microfinance Plans Initial Public Offering (IPO)
A trend in initial public offerings (IPOs) by microfinance institutions in India could potentially increase the risk of defaults by microborrowers. SKS Microfinance, an Indian microfinance institution, has recently filed to raise up to USD 250 million in an initial public offering (IPO), as initially reported by MicroCapital on March 9, 2010. This pending IPO is causing concern that an IPO trend in India could trigger a trend in microfinance institutions’ (MFIs’) funding sources, as reported by MicroCapital on June 16, 2010, which could raise the risk of loan defaults by pressuring MFIs to disburse riskier microloans.
MICROCAPITAL BRIEF: Oikocredit Lends $3.14m in Local-currency to Nine Indian Microfinance Institutions
Oikocredit, a microfinance investment fund in the Netherlands with assets of USD 665 million, recently loaned INR 145 million (USD 3.14 million) to nine Indian microfinance institutions (MFIs).
MICROCAPITAL BRIEF: Second Annual Unitus-Hewitt Compensation And Benefits Survey of Indian Microfinance Institutions Demonstrates Salary Stability
The Unitus-Hewitt Compensation And Benefits Survey, released in early June, has demonstrated stability in the microfinance industry during the 2009 economic crisis. The study examined cash and non-cash benefits at 15 microfinance institutions (MFIs) representing 10 million clients across India. The study was jointly executed by Unitus Inc., an international nonprofit providing funding and consulting services to MFIs, and Hewitt Associates, an international human resources consulting firm.
MICROCAPITAL BRIEF: Aditya Birla Finance (ABF) Enters Wholesale Microfinance Sector in India
Aditya Birla Finance (ABF), a non-banking financial company (NBFC) in India, has entered into the microfinance sector and has already closed a bulk financing deal with an unnamed Hyderabad-based microfinance institution (MFI). ABF is currently looking to form financing partnerships with other MFIs throughout the country.
MICROCAPITAL BRIEF: India: Microfinance Industry Predicts $30b in Loan Portfolio and 110m Clients By 2014
In a report from Intellecap, a social sector advisory firm, it is predicted that the Indian microfinance industry will achieve a portfolio of 110 million borrowers and INR 135,000 crore (USD 30 billion) by 2014.
MICROCAPITAL BRIEF: Oikocredit Invests $6.8m in Local-currency Loans in Three Indian Microfinance Institutions
Oikocredit, a microfinance investment fund in the Netherlands with assets of USD 665 million, recently loaned INR 315 million (USD 6.8 million) to three Indian microfinance institutions (MFIs): Cashpor, SMILE and Grameen FSPL (Grameen Koota).
MICROCAPITAL BRIEF: National Bank for Agriculture and Rural Development (NABARD) Plans to Open Rural Credit Bureaus in India
The National Bank for Agriculture and Rural Development (NABARD), a development bank in India that promotes sustainable agriculture and rural development through credit support, institution building and other related services, plans to set up rural credit bureaus in rural districts throughout the country. According to Dr K.G. Karmakar, the managing director of NABARD, “Once implemented, [the credit bureaus] will go a long way in improving the financial position of India’s 480 million marginal farmers.” The proposed bureaus would maintain information on all rural borrowers in order to facilitate credit and information disbursement.
MICROCAPITAL BRIEF: India’s SKS Microfinance IPO Could Trigger Trend in Microlending
SKS Microfinance has recently filed to raise up to USD 250 million in an initial public offering (IPO), as initially reported by MicroCapital on March 9, 2010. The pending IPO, to be offered on the Bombay Stock Exchange and the National Stock Exchange of India, would be the first public offering for an Indian microlender and is resulting in debate about the future of funding microfinance institutions.
MICROCAPITAL BRIEF: Indian Microfinance Institution Ujjivan Financial Services Reduces Interest Rates, Following Lead of Bandhan Financial Services Private Limited
Ujjivan Financial Services, an Indian microfinance institution, announces that it will reduce borrowing rates on new and renewal loans by 190-290 basis points. As a result, new business loans will cost 23 percent per annum and renewal loans will cost 22 percent per annum beginning in July 2010. As MicroCaptial reported on May 4, 2010, Bandhan Financial Services Private Limited, another Indian microfinance institution, reduced its annual rates on loans possibly triggering the Ujjivan reduction.
MICROCAPITAL BRIEF: Microfinance Opportunities (MFO) and The MasterCard Foundation Announce Partnership with Financial Information Networks and Operation (FINO) of India and The Rural Bankers Association of the Philippines (RBAP) for Branchless Banking Program
The MasterCard Foundation, a private foundation with approximately CAD 3 billion (the equivalent of USD 2.9 billion) in assets, and Microfinance Opportunities (MFO), a microenterprise resource center established in 2002, have selected two companies in Asia to participate in their Financial Education for Branchless Banking Program.
MICROCAPITAL BRIEF: International Finance Corporation to Acquire 20% Stake in India-Based Microfinance Institution Swadhaar FinServe (SPFL)
The International Finance Corporation (IFC), a member of the World Bank Group, recently announced plans to acquire a 20 percent stake in Swadhaar FinServe (SPFL), a non banking financial company that caters to India’s urban poor, for USD 2.25 million.