by Yanni Hao -

MICROFINANCE PAPER WRAP-UP: Microfinance: Ready For its Big Leap? By John Engen

The cover story of the February, 2009 issue of US Banker was entitled, “Microfinance: Ready for its Big Leap?” In it, author John Engen lays out his expectations that a hybrid funding approach will arrive in microfinance sector – one that meshes government, non-profit, and business ethos in pursuit of a “double bottom line” that measures success both with respect to social benefits and financial returns. However, Mr. Engen argues that to attract more funding from private investors, MFIs need further adjustments in both their business practices and ideologies. While such adjustments may be controversial and draw criticism at present, in the long term the changes should induce competition in the sector, and so the theory goes, be beneficial. The real question then is: are MFIs ready for such a big leap? The full text is available at:  

http://www.americanbanker.com/usb_article.html?id=20090126JLCSNV6Y&pagenum=1&numpages=3

by the MicroCapital Team -

MICROCAPITAL STORY: New Microfinance Foreign Exchange Risk Management Group, Cygma, Believes Credit Crunch Provides Business Opportunity

Cygma, the new microfinance foreign exchange (FX) risk management group, believes that the current financial situation is driving people in the microfinance industry to use foreign currency hedging facilities. The organisation will be launching its FX hedging products for illiquid and difficult-to-hedge emerging markets currencies in the first quarter of next year. These will be executed directly by the firm without reliance on third parties, supported by its USD 50 million capital reserve fund.

by the MicroCapital Team -

GUEST EDITORIAL: Ties to Capital Markets Challenge Microfinance Institutions

Once relatively insulated from the world’s financial system, the microfinance industry is finding itself more closely tied to the capital markets than ever before. As a result, it is far from being immune to the current financial crisis, and some microfinance institutions (MFIs) are beginning to see their cost of borrowing go up as a consequence of the global credit crunch.

by Greg Casey -

MICROFINANCE EVENT: Global Summit on Microfinance as an Alternate Asset Class for Institutional Investors

GLOBAL SUMMIT ON MICROFINANCE AS AN ALTERNATIVE ASSET CLASS FOR INSTITUTIONAL INVESTORS

OCTOBER 29-30, MILLENIUM KNIGHTSBRIDGE HOTEL, LONDON, ENGLAND

The conference will focus on the opportunities and challenges for microfinance investments as the industry becomes larger and converges with mainstream financial institutions. Specific topics will include the current state of the microfinance sector, the risks and rewards for institutional investors involved in microfinance, an evaluation of rating metrics currently employed, lessons and opportunities taken from other asset classes, good governance in microfinance institutions (MFIs), and developing a universal framework for evaluating social returns. A complete agenda can be found of the conference website.

by Jennifer Lee -

PAPER WRAP-UP: Subprime Lending: Lessons for the Microfinance Industry by Cecelia Beirne

This 4-page paper discusses the subprime credit market collapse and the comparable forces that could apply to microfinance. Written by Cecelia Beirne, a portfolio manager at global microfinance intermediary MicroVest Capital Management, the paper concludes with recommendations for the microfinance industry. One can find the full version here.

by Anthony Busch -

PAPER WRAP-UP: Capital Markets: A Long-Term Solution to Financial Freedom, Gil Crawford and Lauren Clark

Co-authored by Gil Crawford, CEO of MicroVest, a Washington, DC-based private microfinance investment firm, and Lauren Clark, the Communications Manager for MicroVest, released July 2007 as Volume 10-Number 1 of Microenterprise Development Review, a publication of the Inter-American Development Bank (IDB), 11 pages, available at http://www.microvestfund.com/docs/microenter_dev_%207-16-07.pdf

by Mary Fu -

MICROCAPITAL STORY: Calvert Foundation Lends $500,000 to Mongolian Microfinance Institution XacBank

In another deal coming to us courtesy of Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse, Calvert Foundation, a nonprofit community investment vehicle, recently invested USD 500,000 in loans in XacBank, a leading microfinance institution (MFI) in Mongolia.

by Melissa Duscha -

MICROCAPITAL STORY: International Finance Corporation (IFC) Makes a $3m Equity Investment in Mongolian Microfinance Institution XacBank

The International Finance Corporation (IFC) has signed a partnership agreement with XacBank, one of Mongolia’s leading microfinance institutions. On January 16, 2008, the IFC invested USD 3 million for ten percent of XacBank’s outstanding shares and plans to invest a total of USD 15 million in the next three years. The IFC will have a representative seated on the Board of Directors to consult in the expansion of XacBank’s services throughout the region.

by Amy Rennison -

MICROFINANCE EVENT: Financial Research Associates to Host First Microfinance Conference for Institutional Investors

MICROFINANCE FOR THE INSTITUTIONAL INVESTOR; JANUARY 14-15, 2008; NEW YORK, USA

The event, hosted by Financial Research Associates, is designed to help institutional investors understand the world of microfinance and allow them to identify low-risk market-rate returns while alleviating poverty. The conference will review microfinance institutions and capital management in-depth and will cover specific topics such as microfinance rating methodology, securitization techniques and portfolio risk reduction strategies. There will be speakers and keynote presentations from some of the leading microfinance players.

by the MicroCapital Team -

MICROCAPITAL STORY: Belgian Investment Firm Incofin Provides USD 1 Million to Nicaraguan Microfinance Institution Fundación José Nieborowski through Impulse Microfinance Investment Fund

This story comes courtesy from the Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse. The Impulse Microfinance Investment Fund (Impulse), managed by Incofin, a Belgian social investment company, has directed a USD 1 million loan to Fundación José Nieborowski, a Nicaraguan microfinance institution (MFI). The loan investment contributes to the MFI’s gross loan portfolio of USD 20.2 million, increasing its size by roughly 5 percent. Impulse is now the fourth investment vehicle to financially back Fundación José Nieborowski, joining the ranks of MicroVest One, a US-based limited partnership, Oikocredit, a Dutch investment firm, and the Oxfam Novib Fund, a Netherlands philanthropic investment fund.