by Bharathi Ram -

MICROCAPITAL STORY: Central Bank of Liberia (CBL) Grants Formal Banking License to Liberia’s First Commercial Microfinance Institution, Access Bank Liberia (ABL); ABL Starts Issuing Loans to the Public

Access Bank Liberia (ABL), the first commercial microfinance institution of Liberia, has become operational and started issuing loans to the public, according to an announcement by the International Finance Corporation (IFC), a member of the World Bank group. ABL, which received a preliminary banking license in July 2008, started operations after it was granted a formal banking license by the Central Bank of Liberia (CBL) on January 21, 2009. According to the announcement by IFC, since receiving the preliminary license, ABL had hired and trained loan officers, tailored all its savings and credit products to cater to the demands of the Liberian market and ensured compliance of all its banking systems with the Liberian law. ABL will focus on microfinance lending in Liberia in addition to providing short and medium-term lending to small and medium enterprises (SMEs) in Liberia. So far, no information on the interest rates to be charged is available yet.

by Ryan Hogarth -

MICROCAPITAL STORY: Ghanian Commissioner Charges Insurance Companies to Reach Low-Income Households through Microfinance

AllAfrica.com reported that Josephine Amaoh, Ghanaian commissioner for insurance, has charged insurance companies to explore ways to penetrate the low-income market by offering more appropriate microinsurance products, and by exploring alternative distribution channels, such as microfinance institutions (MFIs). Ms Amaoh presented a paper on “The Implementation of Micro-insurance: The Role and Perspective of The Supervisory Authority” at a West African Insurance Companies Association (WAICA) education conference in Lagos. She said “one major cause of poverty in Sub Saharan Africa is the fact that low income households and markets do not have the same opportunities to finance investments, accumulate capital, and protect their assets… In order to facilitate economic development and alleviate poverty, the financial systems must be made more inclusive by improving access to savings, credit and insurances services to the poor.”

by Lori Curtis -

MICROCAPITAL STORY: Uganda’s Global Trust Bank Plans Expansion Throughout East Africa

Global Trust Bank, owned by the Industrial and General Insurance (IGI) Plc of Nigeria and the National Insurance Corporation of Uganda (NIC) is contemplating opening branches in Rwanda, Burundi and Southern Sudan but says that expansion throughout Uganda’s rural areas is not part of its plan.  Global Trust Bank has been described as a “new indigenous Ugandan commercial bank” in East African Business week, after it acquired Uganda’s Commercial Microfinance Limited (CMF) in July 2008. IGI of Nigeria made the purchase of CMF in order to start up Global Trust Bank, which began operations in November 2008.  MicroCapital covered the initial acquisition and additional information can be found here.  Global Trust Bank has inherited CMF’s eight branches and six agencies throughout Uganda and recently named Richard Byarugaba as its CEO.

by Lori Curtis -

MICROCAPITAL STORY: Malawian Microfinance Institutions Accused of Profiteering – Blue Financial Services and Izwe Lose Government Backing

The Malawian Civil Servants Trade Union (CSTU) has asked the government to rethink its recent decision to cease guaranteeing loans obtained from microfinance institutions (MFIs) or to increase loan facilities to its employers. The government made the decision in December 2008, stating that MFIs were charging “exorbitant” interest rates increasing poverty among civil servants in the country. Blue Financial Services and Izwe were specifically referenced under this accusation. Finance Minisister Goodall Gondwe made the announcement and is reportedly adamant that the government would no longer guarantee or act as a collections agent for loans obtained from microfinance institutions. It is unclear from the various reports whether this will pertain to all MFIs or just to those deemed to be unfairly exploiting civil servants.

by Iyanna Holmes -

WHO’S WHO IN MICROFINANCE: Neptune Software Plc

Founded in 1999, Neptune Software Plc is a banking software provider.  The UK-based company has over 170 employees and offices in the UK, South Africa, Nigeria, Kenya, Uganda, and India.  Neptune partners with technology leaders such as BEA, Oracle, Sybase, IBM, and Business Objects.  While Neptune also provides financial services software to the broader financial services industry, the company has created a niche with microfinance institutions.  In Nigeria, Neptune has partnered with over 45 successful microfinance institutions.  In 2005, CGAP awarded the company the highest rating, 4 stars, for its operational excellence. 

by Iyanna Holmes -

MICROCAPITAL STORY: US Private Equity Group Emerging Capital Partners Invests $28m in Financial BC SA of Togo, Parent of FINADEV, a Microfinance Institution

Emerging Capital Partners (ECP), an international private equity firm focused on investing in Africa, purchased a USD 28 million stake in Financial BC SA (FBC), a privately held Lomé, Togo-based regional commercial bank.  The investment consists of common shares and convertible notes.  FBC will use the funds to expand its presence through central and western Africa.

by Iyanna Holmes -

MICROCAPITAL STORY: Challenges and Unique Solutions to Providing Microinsurance in West Africa

The products and services of most West African insurance companies target corporate clients and those individuals that are not living in poverty. The infrastructure of most insurance companies is not equipped to provide insurance to the poor. Microinsurance premiums are low, administrative costs are high, and traditional distribution channels are not always effective. Also, because premiums are low, microinsurance is a long term investment from the insurance company’s perspective as opposed to traditional insurance companies which collect larger premiums. All of these factors combined, reports Business Day, a Nigerian business news source, result in scarce microinsurance offerings to West Africa’s poor populations.

by Iyanna Holmes -

MICROCAPITAL STORY: St. John’s University Announces a Student-Run Global Micro-Loan Program

St. John’s University’s Peter J. Tobin College of Business is introducing a student-run Micro-Loan Program that actively engages students in international finance. The initiative is being led by Ph.D. Dr. Linda Sama, St. John’s Associate Dean for Global Initiatives. Dr. Sama says that the program, which is scheduled to launch during the Spring 2009 semester, marks “the next stage in business education on the global level.” The program is also in line with St. John’s mission which includes “using the university’s intellectual and physical resources to search out the causes of poverty and social injustice and to encourage solutions which are adaptable, effective, and concrete.” The program has two goals: to explore the utility of microcredit as a tool for combating poverty in locales where banks are virtually non-existent and to expose students to the challenges of lending and collecting money in the developing world.

by Lori Curtis -

MICROCAPITAL STORY: Indonesia’s MBK Ventura, Egypt’s Al Tadamun, and Grameen Bank’s Nurjahan Begum Recognized at Grameen Foundation 2008 Awards

The achievements of the Grameen Bank‘s Nurjahan Begum, Indonesia’s Mitra Bisnis Keluarga (MBK) Ventura, and Egypt’s Al Tadamun were recognized on November 12, 2008 at the Grameen Foundation’s 2008 Awards in Washington D.C. The awards were held in conjunction with its annual Knowledge Sharing Roundtable discussion, which this year discussed the implications of the global financial crisis on microfinance. Nurjahan Begum received the Susan M. Davis Lifetime Achievement Award for her work in microfinance for over 30 years, including her efforts to organize women in Bangladesh’s poorest villages and leading the fight for the rights of disadvantaged women. MBK Ventura of Indonesia received the Excellence in Microfinance Award for its leadership its efforts to ensure that Indonesia’s poorest citizens receive financial services, and Al Tadamun of Egypt was awarded the Pioneer in Microfinance Award in recognition of its program to provide financial services to Cairo’s poorest women.

by Scott Everett -

MICROCAPITAL STORY: Microfinance Institution ACCION International Launches New Hub in Africa

ACCION International, a microfinance organization founded in 1961, launched a new hub office and training center in Accra, Ghana, with the aim to expand financial services for Africa’s poorest populations. The new center will offer support to East and West African microfinance institutions (MFIs) in the form of education and training to increase capacity. According to the press release, ACCION’s goals are to train 3,000 microfinance practitioners in such disciplines as business planning, risk management, lending and governance; all through its training center network.

by the MicroCapital Team -

MICROCAPITAL STORY: MicroRate Publishes Public Ratings of Microfinance Institutions Conducted Between January and September 2008

Forprofit microfinance rating company MicroRate has announced the completion of the following public microfinance institution ratings between January 2008 and September 2008:

by Iyanna Holmes -

MICROCAPITAL STORY: Equity Bank Wins Best Micro Finance Bank in Africa Award at the African Bankers Awards In Washington DC

Equity Bank, the largest Kenyan bank with 48% of the nation’s bank accounts, has won the Best Micro Finance Bank in Africa award at the African Bankers Awards in Washington DC.  Other nominees for the award were ACCION  Microfinance Bank, Barclays, Development Bank of Mauritius, and Swazibank.  The event, the second of its kind, was hosted by London-based IC Publications, publishers of African Banker magazine and endorsed by the World Bank.  Sponsors included the African Development Bank,  3i Infotech, Ecobank, and the Bank of Industry. 

by Scott Everett -

MICROFINANCE EVENT: African Microfinance Investor Fair in Dakar on October 15-16

AFRICAN MICROFINANCE INVESTOR’S FAIR

OCTOBER 15-16, 2008, HOTEL SOFITEL TERANGA, DAKAR, SENEGAL

African Microfinance Transparency (AMT) has organized an African Microfinance Investor’s Fair in Dakar. The purpose of this fair is to bring together rated African microfinance institutions (MFIs) that are in search of funding sources and investors that are offering funding and other such resources to MFIs, be it in local or foreign currency.

by Ryan Benson -

MICROCAPITAL STORY: Pan-African Microfinance Institution Blue Financial Services (BFS) to Acquire South African Microlender Credit U Holdings for $36m

African commercial microlender Blue Financial Services (BFS) has announced plans to purchase the entire issued share capital of South African microlender Credit U Holdings for the price of RND 278 million (USD 36 million). The purchase will consist of a 50 percent cash and 50 percent share offer to all Credit U shareholders, at a ratio of one BFS share for every 2.25 Credit U shares. Both companies’ shares are traded on the Johannesburg Securities Exchange.