by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: Omidyar Network Establishes Entity In India Called Omidyar Network India Advisors With A View To Forming Closer Ties With India-Based Portfolio Organizations

It was recently reported on the Reuters news wire [1] that Omidyar
Network (Omidyar) [2], a social investment firm, has established a
new entity in India called Omidyar Network India Advisors which will be led by Mr Jayant Sinha. The Indian office will enable Omidyar to increase investments and partner more closely with India-based portfolio organizations. Mr Sinha expects Omidyar’s involvement in India to ‘catalyze economic opportunity and social impact’ in the country through ‘market-based approaches that have the potential to improve millions of lives’.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: India Goes For Agent Banking – Reserve Bank Of India To Encourage Indian Microfinance Institutions To Adopt ‘Business Correspondent’ Model To Improve Outreach And Relax Requirements On Transaction Reporting

It was recently reported in India’s Economic Times [1] that the central bank, the Reserve Bank of India (RBI) [2] may widen the scope of the ‘Business Correspondent’ model for Indian MFIs following receipt of preliminary feedback from some Indian banks. Under the Business Correspondent model, banks are entitled to engage intermediaries to disburse ‘small value credits’, recover principal and interest payments, collect ‘small value deposits’, sell microinsurance or pension products and receive or deliver ‘small value remittances’ according to information on the RBI website [3]. The intermediaries engaged as Business Correspondents must be ‘well established’ and enjoy a good reputation locally. The idea is for Business Correspondents to improve an MFIs outreach without compromising the quality of services provided to microfinance clients. The RBI has now proposed to ‘unveil new norms for Business Correspondents’ in a way that would relax certain requirements and widen the geographical coverage of many MFIs. The RBI’s aim is to encourage more ‘banks with scattered branches particularly, private and foreign banks’ to adopt the Business Correspondent model. Examples of intermediaries that can be engaged as Business Correspondents include ‘NGOs, farmers’ clubs, cooperatives, community based organisations, IT enabled rural outlets of corporate entities, post offices [and] insurance agents’.

by Stefanie Rubin -

MICROCAPITAL.ORG STORY: SKS Microfinance Plans for India’s First Microfinance Institution’s (MFI) Initial Public Offering (IPO), Managed by Citigroup, Credit Suisse and Kotak Mahindra Capital

According to an article in the Financial Times, Hyderabad-based SKS Microfinance, India´s largest microfinance institution (MFI), is taking steps toward becoming the first microfinance institution (MFI) to be listed on Indian stock exchanges. The initial public offering (IPO) could come as early as the start of 2010. Investment firms Citigroup, Credit Suisse and Indian-based Kotak Mahindra Capital will manage the USD 200 to 250 million listing [1].

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: India-based Credit Rating Agency Crisil Observes That Percentage Of Bad Loans In Indian Microfinance Institutions May Triple As Microborrowers Feel The Impact Of The Global Economic Crisis

In an article entitled ‘MFI’s bad loans may triple: Crisil’ on India’s Business Standard online news portal [1], it was stated that the percentage of bad assets of MFIS’ is expected to triple to 1.5 percent from 0.5 percent by March 2010, as compared to the levels of bad assets in March 2009.This was the conclusion of India-based credit rating agency, Crisil. The agency attributed the increased levels of deteriorating assets to the global economic crisis which has had an adverse impact on microborrowers’ ability to repay their loans. Nonetheless, Crisil’s managing director and CEO, Ms Roopa Kudva stated that the deterioration in asset quality was still not at the levels seen in 2007 and that MFIs’ asset quality was generally healthier than those of other participants in India’s financial sector.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: Founder And Officer Of India-Based SKS Microfinance Comment On Prospects For Microfinance In China In A Wall Street Journal Report

A recent article entitled ‘Microfinancing China’ in the Wall Street Journal [1] by Mr Vikram Akula and Mr Tarun Khanna discuss the scope for microfinance in China and explores why the concept of microcredit has a ‘notably minimal footprint’ in a mammoth economy such as China. Mr. Akula is founder and chairperson of India-based MFI, SKS Microfinance [2]. Mr. Khanna, the author of the book ‘Billions of Entrepreneurs’ [3] is Jorge Paulo Lemann Professor at Harvard Business School and serves on SKS Microfinance’s board of directors. The view taken by Mr Akula and Mr Khanna is that ‘it will take hard work and reform to grow microfinance in China’ but that millions of poor people in the world’s third largest economy could derive benefits from microloans.

by Radhika Chandrasekhar -

MICROFINANCE EVENT: Mobiles and Money India, Business Events Asia Pte. Ltd., December 8-10, 2009, Trident Nariman Point, Mumbai, India

Event Name: Mobiles & Money India

Event Location: Trident Nariman Point, Mumbai

Event Description: This is a three-day event that discusses the developing mobile banking sector, growth in India’s financial services and telecommunication sectors, and the providing of access of financial services to poorer segments of the population.

by Diya Chopra -

MICROCAPITAL EVENT: Women’s World Banking (WWB) Center for Microfinance Leadership & University of Pennsylvania’s Wharton School of Business Center for Leadership and Change Management to Hold Workshop in Bangalore, India, January 2010

by Radhika Chandrasekhar -

MICROFINANCE EVENT: Third International Conference on Micro Finance, January 22-24 2010, Pondicherry University, Pondicherry, India

Event Name: Third International Conference on Micro Finance

Location: Pondicherry University, Kalapet, Pondicherry – 605 014 India

Event Description: This event is a conference that aims to collaborate with National and International Research centers, and involve economists, socialists, administrators, policy makers, and NGOs, to discuss strategies and policies to eradicate poverty in India and the world through microfinance. Participants may submit contributions of original research work, which has not been published or submitted for publication elsewhere to be published, reviewed, and discussed in the conference. [1]

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

by Christopher Maggio -

MICROCAPITAL.ORG STORY: Bandhan Gets Rs 250-cr (USD 51.9) Million Credit Line From The Government-Backed Small Industries Development Bank of India

Bandhan, a seven-year-old microfinance institution (MFI) based in Kolkata, India has received a credit line worth over USD 51.9 million from the Small Industries Development Bank of India (Sidbi), a government-backed bank focused on investing in the “Micro, Small and Medium Enterprises Sector” (MSME) of India [1,2,3]. This comes after Sidbi extended credit worth over USD 20.7 million to Bandhan last fiscal year [3].

by Zoran Stanisljevic -

MICROCAPITAL EVENT: Institutional and Technological Environment for Microfinance Conference, January 7-8, 2010, New Delhi, India

MICROCAPITAL EVENT: Institutional and Technological Environment for Microfinance Conference, January 7-8, 2010, New Delhi, India

Event Name: Institutional and Technological Environment for Microfinance Conference

Date: January 7-8, 2010

Location: India Habitat Center, New Delhi, India

See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events

by Stefanie Rubin -

MICROCAPITAL.ORG STORY: Lok Capital Invests US $1.5 M in Asirvad Microfinance Private Ltd of India

Venture fund Lok Capital LLC has closed a US $1.5 million investment deal with Indian Chennai-based Asirvad Microfinance Private Ltd, giving it a 24% stake in the company [1].  Launched in 2001 with support from the Rockefeller Foundation, Maritius-based Lok Capital Group comprises Lok Capital LLC, a venture fund which invests in commercially-oriented microfinance institutions in India; Lok Advisory Services (LAS), an Indian-based team which advices the Fund; and the Lok Foundation, a not-for-profit entity providing grant financing to MFIs that receive investments from Lok Capital LLC [2].  Lok Capital LLC investors include the IFC, CDC Group, KfW, FMO, Accion International, responsAbility and Développement international Desjardins.  The fund has a total of US $22 million in committed capital and an average investment size ranges from US $0.5 million to US $2 million [3].

by Zoran Stanisljevic -

MICROCAPITAL.ORG STORY: Venture Capital and Private Equity Firms Invest Millions in India, but is there Risk in Microfinance Funding?

According to Arun Natarajan, CEO of Venture Intelligence (a provider of analysis and information on private equity (PE), Venture Capital (VC) and Mergers and Acquisition deals (M&A) in India), Venture Capital firms invested USD 117 million in over 27 deals in India during the six months ending June 2009 [1]. Microfinance Institutions (MFIs) raised roughly USD 68 million in India from venture capital (VC) and private equity (PE) firms in May through July 2009 [2]. While this increase in capital bodes well for MFIs, it brings forth a necessity for greater level of due diligence. According to Deepti Chauhary of Livemint, (an Indian provider of global, financial and economic headline news), such high cash inflows may bring new risk to MFIs such as over-indebtedness and malpractices in pre-loan disbursal [2].  Does this pose a barrier for MFIs to obtain future funding from outside investors?