by Laura Anderson -

MICROCAPITAL STORY: Private Equity Fund Inflow to Indian Microfinance Sector Grows 242% in Fiscal Year 2008-2009

Venture Intelligence, a Chennai-based company that tracks investments deals, reports that there were 11 private equity investments worth USD 178 million into the Indian microfinance sector in the fiscal year ended March 2009, a 242 percent increase versus the three deals worth USD 52 million in the 2008 fiscal year.  According to the report on mydigitalfc.com, private equity investments into the Indian microfinance sector began in January 2007.

by Bharathi Ram -

WHO’S WHO IN MICROFINANCE: Ela Ramesh Bhatt, Founder of the Self-Employed Women’s Association (SEWA) in India

Dr. Ela Ramesh Bhatt is the founder of the Self-Employed Women’s Association (SEWA), a development organization based in India dedicated to the economic empowerment of the poorest and most oppressed women in India. A lawyer by training, Dr. Bhatt is widely respected among the international labor, cooperative, women, and micro-finance movements and is also one of the founders of Women’s World Banking, the New York based global network of microfinance providers and banks dedicated to ‘expanding the economic assets, participation and power of poor women’ by providing them access to finance, knowledge and markets.

by Laura Anderson -

MICROCAPITAL STORY: Indian Microfinance Institutions Madura Microfinance and Grama Vidiyal Report Good Credit Growth in Fiscal Year 2009

Despite the credit crunch Indian MFIs Grama Vidiyal, and Madura Microfinance reported strong credit growth as Indian banks eased credit in order to meet their priority sector targets.  Grama Vidiyal’s disbursements grew 81.2 percent to USD 74.6 million from USD 41.2 million in the prior year.  Madura’s disbursements grew 33 percent to USD 25.3 million from USD 18.9 million in the previous year.

by Zoran Stanisljevic -

MICROCAPITAL STORY: SKS Microfinance, Share Microfin, and Equitas Microfinance Collaborate with Yes Bank to Securitize a Series of Micro-loans in India that Cumulatively Amount to USD 38.3 Million.

According to S. Dilli Raj, CFO of SKS Microfinance, the first securitized deal by an Indian MFI has received the highest rating (P1+SO; very strong safety) by CRISIL (A Standard & Poor`s company).  CRISIL assigned a very strong safety review based on an analysis of over 1 million loans that were extended by SKS Microfinance Private Limited.  Also, the series of recent transactions concluded allows YES Bank to purchase 14,850 micro loans that have been extended to unbanked and minority families as identified by the Reserve Bank of India (RBI) as “weaker sections”  The transactions covers roughly 400,000 micro loan borrowers (average loan size USD 178 dollars) and spans across three microfinance institutions (MFIs). 

by Laura Anderson -

MICROCAPITAL STORY: Indian Microfinance Institution Bandhan Sells Agricultural Loans Worth USD 35.4 Million to Punjab National Bank and Other Commercial Banks

Bandhan, an Indian microfinance institution, has sold Rs 180 crore (USD 35.4 million) worth of farm loans to several Indian commercial banks including Punjab National Bank (PNB), IndusInd Bank, Development Credit Bank (DCB), and Kotak Mahindra Bank, according to a report in the Economic Times.

by Bharathi Ram -

MICROCAPITAL EVENT: Microfinance Connect to Conduct Training Program on ‘Market Research for Microfinance Managers’: April 15-17, 2009 in Hyderabad, India

Market Research for Microfinance Managers

April 15-17, 2009, Hyderabad, India

Microfinance Connect, in association with Sambodhi Research and Communications, is conducting a training program on ‘Market Research for Microfinance Managers’ from Apr 15-17, 2009 at Hyderabad, India. The need for the training stems from the fact that market research, which is a generally widely accepted and employed science to collect and analyze relevant data about customers/ competitors and markets, has found limited usage in Microfinance. The supply side potential for microfinance is immense with a large population out of reach of formal financial systems and this makes it tougher for organizations to transition from supply driven to demand driven growth. Hence, there is a need to sensitize and capacitate microfinance practitioners towards understanding the market in greater detail and appreciating specific needs of customers. Thus, according to the organizers, the main aim of the training is to address this need and to create more use for market research in the microfinance industry.

by Laura Anderson -

MICROCAPITAL STORY: SKS Microfinance, Madura Micro Finance and Grama Vidiyal to Offer Home Loans in India

According to a report in The Times of India, three Indian MFIs will begin offering home loan products to the rural poor.  SKS Microfinance, Madura Micro Finance and Grama Vidiyal all plan to start rolling out home loans and home improvement loans to borrowers with good repayment records.  According to Tara Thiagarajan, Chairman of Madura Micro Finance, the low cost construction model used by the rural poor has prompted the MFIs to offer the loans.  Most people in Indian villages own plots and construct their own homes using indigenous materials.

by Zoran Stanisljevic -

MICROCAPITAL STORY: India’s microfinance sector softens while Indian MFIs Turn to Securitizing Loans to Raise Funds

As the microfinance sector in India begins to unwind, more microfinance institutions in the country are increasingly looking at securitization as a method for off-balance sheet financing for capital relief.  The intention is to free up capital and reduce borrowing costs.  According to Dilli Raj, Chief Financial Officer of SKS Microfinance, “securitization is a win-win for both MFIs and banks/investors.”

by Bharathi Ram -

MICROCAPITAL EVENT: Wharton School and the Center for Insurance and Risk Management (CIRM) to Conduct Training Program on Scaling MicroInsurance in Developing Countries from April 20- 26, 2009 in Chennai, India

Training Program: Scaling MicroInsurance in Developing Countries

April 20-26, 2009, Chennai, India

The Center for Insurance and Risk Management (CIRM) of the Institute for Financial Management and Research (IFMR) in Chennai, in collaboration with the Wharton School of the University of Pennsylvania, is offering a training program titled ‘Scaling Microinsurance in Developing Countries’ from April 20- 26, 2009 in Chennai, India. The main objective of the training program is to aid organizations providing microinsurance services in developing countries to design insurance contracts and to underwrite and price micro-insurance products. According to the organizers, the need for such training stems from the fact the growth of microinsurance services has not been as substantial as compared to microfinance, despite the high demand for microinsurance. The program is directed at insurers, re-insurers, large community agencies, technical support agencies, brokers etc of developing countries.

by Bharathi Ram -

MICROCAPITAL EVENT: Sa-Dhan to host National Conference on Creating a Microfinance Ecosystem in New Delhi, India

National Conference on Creating a Microfinance Ecosystem: Challenges and Balanced Growth

March 31, 2009, New Delhi, India

Sa-Dhan, an association of community development financial institutions in India, is organizing the National Microfinance Conference 2009 focusing on the theme ‘Microfinance Ecosystem: Equilibrium between Growth and Effectiveness’. The day long event will be held at the Ashok Hotel in New Delhi, India on March 31, 2009. The conference is an effort to help facilitate the growth process of Sa-Dhan’s member organizations and other government agencies in India through collective learning opportunities, focusing on the means to overcome issues plaguing the microfinance sector in India. Issues include the commercialization of microfinance institutions (MFIs), governance, risk management, provision of holistic microfinance services (like savings, microinsurance, livelihood, etc), resource mobilization and credit crunch and cost of services.

by Ryan Hogarth -

MICROCAPITAL STORY: Indian SKS Microfinance Issues Bonds and Commercial Notes, and Announces a $963.6m Borrowing Plan to Finance Rapid Growth

Hyderabad-based SKS Microfinance announced that it aims to raise one-tenth of its USD 963.6 million borrowing plan for the next fiscal year through USD 96.4 million worth of securitization deals with financial institutions. The announcement was made shortly after SKS sold USD 4.8 million non-convertible debentures (NCD) with YES Bank and generated another USD 4.8 million through the issuance of commercial paper (CP). Last month, SKS solidified a USD 38.5 million securitization deal with India’s second largest bank, the Industrial Credit and Investment Corporation of India (ICICI). These deals come as SKS strives to finance a loan portfolio that is growing at one of the fastest rates among microfinance institutions (MFIs) in the world.

by Bharathi Ram -

MICROCAPITAL STORY: SKS Microfinance in India Plans to Launch Operations in China

SKS Microfinance, the largest microfinance provider in India in terms of assets, is planning to launch operations in China, in a move to expand its reach beyond India. According to a press release on The Economic Times, SKS reckons this would be the ideal time to enter the Chinese market. The export driven Chinese economy has been impacted by the global meltdown and several vocationally-trained rural employees in China have lost jobs. SKS plans to give credit to these unemployed groups in China and help them start their own ventures. In this regard, the release quoted the chief executive officer and managing director of SKS Microfinance, Mr. Suresh Gurumani as saying that SKS was looking to expand in China primarily because it was a ‘large country with a significant population that was poor’. Mr. Gurumani also stated that the expansion was a move to share SKS’ knowledge in the field of microfinance to benefit ‘a larger section of people’. SKS’ foray into China would make it the first overseas expansion for an Indian microfinance institution (MFI).

by Bharathi Ram -

MICROCAPITAL EVENT: Financing the Poor – Moving Beyond Inclusion: First Annual Global Conclave of Microfinance Connect to be held in New Delhi, India on April 29, 2009

First Annual Global Conclave of Microfinance Connect

April 29, 2009, New Delhi, India

Microfinance Connect will conduct its first annual global conclave in New Delhi, India on April 29, 2009. The day long event will focus on the theme: ‘Financing the Poor – Moving Beyond Inclusion’. The basis and theme of the event is based on the argument that microfinance as a tool for reducing poverty needs a shift in focus from just ‘inclusion’ to a more holistic framework that monitors and addresses the ‘outcomes and impact’ of microfinance products and services. The attempt of the conference is to channel stakeholder attention to these key issues and to provide a global platform to showcase endeavors/ accomplishments towards understanding and enhancing the outcome and impact of microfinance.

MicroFinance Connect invites banks and financial institutions, Microfinance Institutions (MFIs), apex bodies and networks, advocacy and support institutions, researchers and students to participate in this event. No information on the registration fee is available.

by Yanni Hao -

MICROCAPITAL STORY: CDC Group Invests $30m in Microfinance Funds: India Financial Inclusion Fund and Catalyst Microfinance Investors

CDC Group, the British government-backed, private equity fund of funds with net assets of 4 billion USD, has invested into two microfinance funds to the tune of 15 million USD: the India Financial Inclusion Fund, managed by Caspian Capital Partners, and the Catalyst Microfinance Investors, managed by Catalyst Microfinance Investment Company. By investing in MFIs, the fund aims to provide low-income persons access to a wide range of financial services, including credit, savings, and fund transfers.