SKS Microfinance Limited, a for-profit microfinance institution (MFI) headquartered in Hyderabad, India, recently partnered with IBM MobileFirst, the mobile division of US-based information technology company International Business Machines (IBM), in an effort to improve staff productivity in acquiring customers, completing loan disbursements and collecting repayments [1][2].
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MICROCAPITAL BRIEF: India’s Micro Units Development and Refinance Agency (MUDRA) Bank Loans $9.3m to Microfinance Institutions (MFIs) Arohan, Belstar, Equitas, Margdarshak, Sonata
The Micro Units Development and Refinance Agency (MUDRA) Bank, an Indian public-sector financial institution that provides subsidized loans to microfinance institutions (MFIs) and non-banking financial institutions, recently announced that it had disbursed loans totalling INR 620 million (approximately USD 9.3 million) to MFIs in India.
MICROCAPITAL BRIEF: Mutual Funds in India Invest $157m in Secured Debentures of Microfinance Institutions (MFIs) Equitas, Janalakshmi, SKS, Ujjivan
Several mutual funds based in India, including Industrial Credit and Investment Corporation of India (ICICI) Prudential Mutual Fund, Housing Development Finance Corporation (HDFC) Mutual Fund, Kotak Mutual Fund, Reliance Mutual Fund and State Bank of India (SBI) Mutual Fund, recently invested in secured debentures issued by several Indian microfinance institutions (MFIs).
MICROFINANCE PUBLICATION ROUND-UP: Morocco’s Microfinance Market; Trends in Funding Financial Inclusion; Growth Projections in Islamic Microfinance
“Ending the Microfinance Crisis in Morocco: Acting early, acting right;” published by the International Finance Corporation in partnership with the Canadian Department of Foreign Affairs, Trade, and Development; the Danish International Development Agency; Japan; Switzerland’s State Secretariat for Economic Affairs; and UKaid; October 2014; available at http://www.ifc.org/wps/wcm/connect/5e1e5a0047850bdba0d4f5299ede9589/IFC+Morocco+MicroFinance+Crisis+report.English.pdf?MOD=AJPERES
MICROCAPITAL BRIEF: Standard Chartered Bank (SCB) Loans $6m to Indian Microfinance Institution (MFI) Sonata Finance
The Indian unit of UK-based commercial financial institution Standard Chartered Bank (SCB) recently notified MicroCapital that it has disbursed a loan of INR 370 million (USD 5.8 million) to Sonata Finance Private Limited, an Indian microfinance institution (MFI) that serves India’s northern states.
MICROCAPITAL BRIEF: Equitas Finance Borrows $16m in Non-Convertible Debentures (NCDs) from Franklin Templeton Mutual Funds
Equitas Finance Private Limited, subsidiary of Indian microlender Equitas Holdings Private Limited, has raised INR 1 billion (USD 16 million) from Franklin Templeton Mutual Funds, a US-based global investment firm.
SPECIAL FEATURE: Are Microfinance Institutions and Investors Removed from Business Reality?
This opinion piece was contributed by David MacDougall, a consultant based in the US city of New York.
Microfinance inspires optimism. Investors – especially private equity investors – anticipate handsome returns; aid agencies see strong social impact; and microfinance institution (MFI) managers are certain they can grow themselves out of every tight situation. While microfinance can play an important role in development, most MFIs nevertheless are relatively simple financial institutions that need to be grounded in sound market and business principles rather than pie-in-the-sky expectations. These “Business 101” principles, which may sound like common sense truisms, in my experience, have not trickled down to many MFIs. In over 10 years of examining the viability of MFI business models as an analyst and risk manager, I have seen decision makers fail again and again to do reality checks. What’s still urgently needed is sound market analysis and professional risk management.
MICROCAPITAL BRIEF: Utkarsh Micro Finance, Advans SA Land $24m in Equity from CDC, Lok Capital, Aavishkaar Goodwell India, International Finance Corporation, Norwegian Microfinance Initiative
The Commonwealth Development Corporation (CDC), a development finance institution owned by the UK government, has announced that it has made an equity investment of USD 11 million in Utkarsh, a northern Indian microfinance institution (MFI) [1].
MICROCAPITAL BRIEF: CDC, Creation Investments, DEG, International Finance Corporation (IFC), FMO Acquire 40% Equity Stake in India’s Equitas for $51.4m
The Commonwealth Development Corporation (CDC), which is owned by the UK government; Creation Investments Capital Management (Creation Investments), a US-based alternative investment management company; Deutsche Investitions-und Entwicklungsgesellschaft GmbH (DEG), a German development finance institution offering long-term project and company financing; the International Finance Corporation (IFC), the private-investment arm of the World Bank Group; and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), a Dutch development bank, recently announced that they will invest a total of INR 325 cores (USD 51.4 million) to acquire 40 percent of the shares of Equitas Holdings, an Indian microfinance lender.
MICROCAPITAL BRIEF: Morgan Stanley Offers Balanced, Equity “Investing with Impact” Portfolios
Morgan Stanley, a US-based international financial services corporation, recently created two “Investing with Impact” portfolios as part of its goal to draw USD 10 billion in client assets towards “sustainable” investing products.
MICROCAPITAL BRIEF: Citi Foundation Donates $2m to 7 Initiatives for Financial Education, Capacity Building in India
The Citi Foundation, the charitable arm of US-based financial services provider Citigroup that promotes financial inclusion and other initiatives, recently announced that it has issued the first disbursement from its “Innovation Grant Program”[1] with the aim of increasing its impact in India.
MICROCAPITAL BRIEF: India’s PNB Housing Finance Borrows $50m from International Finance Corporation (IFC) for Mortgages for Low-Income Families
PNB Housing Finance Limited (“PNB Housing”), a subsidiary of the India-based, government-controlled Punjab National Bank (PNB), recently accepted a loan of USD 50 million from the International Finance Corporation (IFC), the private-investment arm of the US-based World Bank Group.
SPECIAL REPORT: European Microfinance Platform (e-MFP) Announces Finalists for Fifth European Microfinance Award for Environmental Products: ESAF Investments of India, Kompanion of Kyrgyzstan, XacBank of Mongolia
The European Microfinance Platform (e-MFP), a Luxembourg-based network of approximately 130 microfinance organizations and individuals, has announced that there are three finalists for the Fifth European Microfinance Award, which is themed “Microfinance and the Environment” for 2014[1].
MICROFINANCE PAPER WRAP-UP: “Integrated Health and Microfinance in India, Volume II: The Way Forward;” by Somen Saha, D.S.K. Rao; published by Microcredit Summit Campaign, Freedom from Hunger
“Integrated Health and Microfinance in India, Volume II: The Way Forward;” by Somen Saha and D.S.K. Rao; published by the Microcredit Summit Campaign and Freedom from Hunger; 2014; 36 pages; available at http://microcreditsummit.org/uploads/resource/document/ffh_indiareport_2014_web_58274.pdf
This paper builds on a report entitled “Integrated Health and Microfinance in India: Harnessing the Strengths of Two Sectors to Improve Health and Alleviate Poverty”, which was written in 2012 by a group of authors that includes those who wrote “Volume Two.”
MICROCAPITAL BRIEF: Reserve Bank of India (RBI) to Encourage Banks to Deploy Rural Automatic Teller Machines (ATMs), Use Unclaimed Funds for Financial Education
The Reserve Bank of India (RBI), the country’s central banking authority, reportedly has initiated a program under which banks are requested to install an unspecified number of automatic teller machines (ATMs) in rural areas that will dispense bank notes in relatively small denominations.
MICROCAPITAL BRIEF: India’s ESAF Microfinance and Investment Issues $7.8m In Non-Convertible Debentures (NCDs) to Triodos
Evangelical Social Action Forum (ESAF) Microfinance and Investment Private Limited (EMFIL), a non-banking financial institution (NBFC) based in the Indian state of Kerala, reportedly has raised INR 475 million (USD 7.8 million) by issuing non-convertible debentures (NCDs) to Triodos Investment Management, a subsidiary of Netherlands-based for-profit Triodos Bank [1].
MICROCAPITAL BRIEF: Elevar Equity, Omidyar Network, Saama Capital, WestBridge Capital Invest $27m in Equity in India’s Vistaar Finance for Lending to Micro-, Small, Medium-sized Enterprises (MSMEs)
Elevar Equity, which invests in “disconnected communities” from offices in India and the US; Omidyar Network, a US-based investor in “socially responsible” organizations; Saama Capital, an India-focused venture capital fund registered in Mauritius; and WestBridge Capital, an India-based investment company with offices in India, Mauritius and the United States, reportedly have collectively invested INR 1.6 billion (USD 27 million) in Bangalore-based non-banking finance company Vistaar Finance (Vistaar).
MICROCAPITAL BRIEF: Credit Rating Information Services of India Limited (CRISIL) Upgrades Rating of Evangelical Social Action Forum (ESAF) Microfinance
Credit Rating Information Services of India Limited (CRISIL), an Indian ratings, research, risk and policy advisory company, has elevated the rating of Evangelical Social Action Forum (ESAF) Microfinance, a microfinance institution (MFI) based in the Indian state of Kerala, to “mfr2.” [1][2]