Microfinance institutions (MFIs) in Nigeria want to bypass commercial banks to access government money in the form of a ‘meso’ credit scheme designed by the National Poverty Eradication Programme (NAPEP) – a government agency responsible for coordinating and monitoring all poverty eradication activities nationwide – to provide loans of between NGN 500,000 (USD 3,300) and NGN 50 million (USD 331,000) for agricultural processing in rural areas. The current regulations mandate that the meso credit funds be distributed to commercial banks for on-lending to qualified microfinance banks at “competitive rates.”
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MICROCAPITAL BRIEF: Three Directors of Impact Microfinance Bank Limited Arrested for Fraud in Nigeria
Three directors of Impact Microfinance Bank Limited, a microfinance institution established in 2008 with headquarters in Lagos, have been arrested for fraud. The three men – 49 year-old Innocent Akpan, 45 year-old David Obieke and 45 year-old Joseph Nwabuwanne – were arrested after several depositors complained that they could not access their funds. The suspects allegedly mismanaged the depositors’ money and subsequently could not honor clients’ deposits.
MICROCAPITAL BRIEF: African Development Bank, Four Other International Finance Institutions Launch $600m African Capitalization Fund
The African Development Bank (AfDB) and four development finance institutions recently launched an African Capitalization Fund (the “Fund”), which will be structured as a private equity fund. The other financial institutions involved are the European Investment Bank, the International Finance Corporation (IFC), the OPEC Fund for International Development (OFID) and Abu Dhabi Fund for Development (ADFD). The Fund will be managed by the IFC’s Asset Management Company and will invest in private sector commercial banks.
MICROCAPITAL BRIEF: Bank Respublika, a Private Commercial Bank in Azerbaijan, Reduces Interest Rates to Expand Lending for Small and Medium-Sized Enterprises
Bank Respublika, a private commercial bank in Azerbaijan, has reduced interest rates in order to increase lending flow for small and medium-sized enterprises. According to an unnamed bank official, “High levels of liquidity allow the bank to offer the above loan products on unrestricted long-term basis to entities engaged in entrepreneurial activity.” As of April 1, 2010, Bank Respublika held total capital of approximately AZN 56.1 million (USD 9.7 million) and total assets of AZN 334.5 million (USD 415.5 million).
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.
MICROCAPITAL BRIEF: World Bank Approves $300m Loan to Small Industries Development Bank of India (SIDBI) and $107m to Indian Government to Improve Statistics
The World Bank has approved a USD 300 million loan from the Scaling Up Sustainable and Responsible Microfinance Project to the Small Industries Development Bank of India (SIDBI) and a USD 107 million loan from the Statistical Strengthening Loan Program to the national government of India [1].
MICROCAPITAL BRIEF: KfW Entwicklungsbank (KfW) and Norwegian Microfinance Initiative (NMI) Commit Total of $11.6m to Goodwell West Africa to be Invested in Microfinance Sector in Ghana and Nigeria
Goodwell West Africa, a branch of Goodwell Investments, a business development company based in the Netherlands, has received commitments of EUR 8 million (USD 9.7 million) from KfW Entwicklungsbank (KfW), a German development bank, and EUR 1.6 million (USD 1.9 million) from Norwegian Microfinance Initiative (NMI), a strategic partnership between the Norwegian public and private sectors that invests in and provides support for microfinance institutions (MFIs) in developing countries. The funds will be invested in established MFIs as well as emerging MFIs in Ghana and Nigeria.
MICROCAPITAL BRIEF: Faulu Kenya, a Microfinance Bank Based in Nairobi, Signs Partnership Deal with PesaPoint, a Private Provider of ATM Services
Faulu Kenya, a microfinance bank based in Nairobi, recently signed a partnership deal with PesaPoint, a private company that provides automated teller machine (ATM) services, that will allow its customers to withdraw cash and access previously approved loans from ATMs across Kenya. By expanding service availability through such partnerships, Faulu Kenya plans to expand its client base to 1.5 million from the current 200,000 customers over the next two years according to John Mwara, the bank’s chief executive officer.
MICROCAPITAL BRIEF: Guyana Bank for Trade and Industry Limited (GBTI) Launches Women of Worth (WOW) Program to Help Single Mothers Access Microloans
Guyana Bank for Trade and Industry Limited (GBTI), a commercial bank in Guyana, has launched the Women of Worth (WOW) program, which aims to help single mothers start small businesses. GBTI has committed GYD 500 million (USD 2.4 million) to help single mothers establish, expand or upgrade their small businesses.
MICROCAPITAL BRIEF: IBM Launches New Center For Provision of Microfinance Services in Peru with Investment of $20m
Jaime Garcia Echecopar, a general director for IBM, a multinational computer, technology and IT consulting corporation, announced the launch of a new microfinance project in Peru. IBM plans to invest USD 20 million over the next five years to develop its first processing center for microfinance institutions. The center will be able to manage the information relating to 2 million loans and deposits of various microfinance institutions (MFIs). These institutions will be able to use the internet to access their customer’s information and thus will not have to face extensive new investments in IT systems.
MICROCAPITAL BRIEF: Daiwa Securities Group to Issue Bonds in Japanese Market to Support Operations of European Bank for Reconstruction and Development (EBRD)
Daiwa Securities Group, a Japanese securities broker reporting JPY 17.1 trillion (USD 186 billion) in assets as of March 2010, will be issuing bonds to Japanese retail and institutional investors to support the operations of the European Bank for Reconstruction and Development (EBRD), an international developmental finance institution focusing on Eastern Europe and Central Asia and headquartered in London [1].
MICROCAPITAL BRIEF: World Bank Approves $200m Loan to Small Industries Development Bank of India (SIDBI) For Microfinance Institutions (MFIs) in India
The World Bank’s Board of Executive Directors has approved a loan of USD 200 million to be given to the Small Industries Development Bank of India (SIDBI) for lending to microfinance institutions (MFIs) in India.
SPECIAL REPORT: Interview with Dirk Reinhard, Vice Chairman of the Munich Re Foundation and Member of the Executive Committee of the Microinsurance Network
Thank you to the Microinsurance Network for permission to reprint its recent interview with Dirk Reinhard, instigator of the International Microinsurance Conferences:
In light of the upcoming 6th International Microinsurance Conference taking place between 9-11 November in Manila, Philippines, Dirk Reinhard, Vice Chairman of the Munich Re Foundation and member of the Executive Committee of the Microinsurance Network, answers a few questions regarding the past, present and future of this pioneering conference.
Microinsurance Network: How did the first International Microinsurance Conference come about in Munich? What were the aims of this conference and who were behind it?
Dirk Reinhard: Munich Re – which founded the Munich Re Foundation in April 2005 – concerns itself with the great challenges facing the world today – population growth, globalisation, diminishing resources, environmental pollution and climate change.
MICROCAPITAL BRIEF: responsAbility Mikrofinanz-Fonds Disperses Total of $3.2m to Microfinance Banks Inecobank of Armenia, AFK of Kosovo, Lazika Capital of Georgia and Coomuldesa of Colombia
The responsAbility Mikrofinanz-Fonds, a microfinance investment vehicle (MIV) founded in 2007, recently reported to MicroCapital that it has executed debt investments totaling USD 3.2 million in four microfinance banks. The largest amount, USD 1.5 million, went to Inecobank, an Armenian bank founded in 1996 with a gross loan portfolio of USD 91.7 million [1]. The MIV reports total assets of USD 108.5 million as of 2009, and is one of four funds operated by responsAbility, the others being responsAbility Base of the Pyramid, responsAbility Global Microfinance Fund and responsAbility Microfinance Leaders Fund.
MICROCAPITAL BRIEF: responsAbility Global Microfinance Fund and responsAbility Microfinance Leaders Fund Disperse Total of $750k to Indian Microfinance Investment Vehicles Indian Financial Inclusion Fund and LOK Capital Fund
responsAbility Microfinance Leaders Fund and responsAbility Global Microfinance Fund have executed respective equity investments of USD 411,000 and USD 339,000 in MIVs that invest primarily in Indian microfinance institutions (MFIs) according to a report submitted to MicroCapital.
MICROCAPITAL BRIEF: responsAbility Global Microfinance Fund Invests total of $4.6m in Microfinance Banks Inencobank of Armenia, Lazika Capital of Georgia, Aregak of Armenia and Centurion of Russia
The responsAbility Global Microfinance Fund, based in Switzerland founded in 2003, has executed debt investments totaling USD 4.6 million in four microfinance banks. The MIV reports total assets of USD 358 million as of 2009, and is one of four funds operated by responsAbility, the others being responsAbility Base of the Pyramid, responsAbility Mikrofinanz-Fonds and responsAbility Microfinance Leaders Fund.
MICROCAPITAL BRIEF: Rwandan Microfinance Institution Urwego Opportunity Bank (UOB) Reports Lending Fosters Social Reconciliation
Radio Netherlands Worldwide recently reported that microfinance in Rwanda is “booming” and the Netherlands is contributing to this “success” [1]. One of the potential effects of the rise of microfinance in Rwanda is social reconciliation. Faustin Zihiga, the Chief Operating Officer of Urwego Opportunity Bank (UOB) of Rwanda, the largest microfinance bank in Rwanda among those reporting to the Microfinance Information Exchange (MIX Market), suggests that in group-lending programs, survivors of the genocide mix in the same groups as perpetrators of the genocide. They begin to associate themselves by their group, not by their ethnic background. According to Zihiga, the social change is often even more visible than the economic change that microfinance brings about [3].
MICROCAPITAL BRIEF: LeapFrog Investments Microinsurance Fund Raises Additional $25m in Commitments from New Investors Including J.P. Morgan and TIAA-CREF
LeapFrog Investments, an international for-profit microinsurance fund, recently announced its final close raising USD 25 million for a total fund size of USD 137 million for investments in Africa and Asia.