Event Name: Mobile Money Transfer (MMT) APAC Conference & Expo, December 8-9, 2009, Manila, Philippines
Date: December 8-9, 2009
Type: Conference
Location: Manila, Philippines
See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events
The International Banking Systems publication (IBS), an online journal that provides information on banking systems and operations, have produced a detailed supplement on the role of technological systems in microfinance [1]. An article within the supplement entitled ‘Analysis: Microfinance Stakeholders – Guiding hands’ [2] explores how major stakeholders shape the market for microfinance information systems (MIS). The thrust of the article is that there is an important difference between the microfinance and commercial banking sectors when it comes to information systems and that MFIs depend heavily on key stakeholders such as the Bill and Melinda Gates Foundation [3], CGAP [4], the IFC [5] and GTZ [6] for guidance and direction in making technology decisions. The conclusion arrived at is that ‘directly or indirectly, it is these stakeholders that influence purchasing decisions by MFIs, on the business case for investment, the process of selection, and which products to choose’ in respect of MIS.
The International Finance Corporation (IFC), the investment arm of the World Bank, has invested in Joint Stock Company (JSC) Bank CenterCredit, “the fifth largest bank in Kazakhstan in terms of total assets,” with the intention of expanding credit access for small and medium enterprises (SMEs) [1,2,3]. The IFC has taken a 12.5 percent equity stake in the bank as well as providing a USD 85 million subordinated loan [3]. A subordinated loan is of higher risk to the creditor because of its low priority in terms of repayment in the event of default. Additionally, Kookmin Bank, the largest bank in South Korea in terms of assets, will increase its equity stake in JSC Bank CenterCredit from 30.5 percent to 40.1 percent [3]. This comes after JSC Bank CenterCredit received a USD 45 million 5-year term loan from the IFC in January of 2009, and has been participating in the IFC leasing finance program in which the bank rents assets from the IFC since 2005 [4].
Source: Triodos Bank.
By International Finance Corporation, published by World Bank, September 2009, 31 pages, available at:
http://siteresources.worldbank.org/FINANCIALSECTOR/Resources/282044-1252…
The International Finance Corporation has recently published a report on payments and securities settlement systems, remittances, credit reporting and secured transactions and collateral registries, with recommendation for reform to create greater efficiency and reliability for the system, while reducing costs and increasing access to financial services.
The report notes that financial infrastructure touches at least every 5th person in emerging markets. While credit bureaus cover 390 million people with remittances of over 700 million and payment systems at 1 billion, the IFC belives that a new more efficient financial infrastructure allows for cost reduction of up to 75 percent or more in transactions costs for credit evaluations, collateralizing loans, remittances and payments. Improvements in financial infrastructure have the potential to enable access to financial services for half the population in emerging markets in the next 10 years.
The Netherlands Development Finance Company (FMO) was founded by the Dutch government in 1970 as a means to stimulate sustainable growth in developing economies through private sector investment. FMO funds financial institutions or companies in developing countries by investing in housing, energy, and financial private sector projects in emerging markets.
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].
Microfinance Event: Azerbaijan Microfinance Association Investors Fair in Baku, Azerbaijan, October 7, 2009
Event Name: Azerbaijan Microfinance Association Investors Fair
Location: Baku, Azerbaijan
Date: October 7, 2009
Event Description: The conference will focus on MFI governance strategy, financial risk management, client protection, opportunities to learn about innovative products, and a chance to access capital investors [1].
See Our Comprehensive Event Calendar Here: http://microfinanceassociation.ning.com/events
Cost: AMFA Members: AZN 200 (USD 248)
non-AMFA Members: AZN 250 (USD 310)
International: USD 200
Summary of Event: The day will start with remarks from members of the Azerbaijan Microfinance Association, the Azerbaijani government, and business representatives. There will then be three panels on governance, risk, and client protection, respectively. Lastly, the Investors Fair will be a roundtable to discuss critical microfinance issues [2].
United States Senator Bob Menendez of the state of New Jersey, U.S. recently announced plans to invest in the Latin American and Caribbean (LAC) microfinance sector. The U.S. administration will launch a Microfinance Growth Fund (MGF) with the following organizations: the Overseas Private Investment Corporation (OPIC), an independent U.S. government agency which assists with investments in developing countries; the Multilateral Investment Fund (MIF), an autonomous fund administered by the Inter-American Development Bank (IDB); and the Inter-American Investment Corporation (IIC), an affiliate of the IDB which supports private sector and capital market development in LAC countries.
BlueOrchard [1], a commercial microfinance investment intermediary based in Switzerland, has, through its Private Equity fund, invested Rs 500 million (the equivalent of over USD 10.2 million) in the equity of Asmitha Microfin Limited [2], a Microfinance Institution (MFI) based in Hyderabad, India. This was announced in a press release [3] available on the Asmitha website. Microcapital covered the relationship between these two organizations in October of 2008 when BlueOrchard made an initial equity investment in Asmitha of USD 5.3 million intended to “expand [the MFI’s] capital base and bolster its borrowing capacity” [4]. According to Dr. Vidya Sravanthi, Chairperson and Managing Director of Asmitha, the MFI hopes to use the newest investment to “[expand] its operations deeper into the Indian rural markets and offering its services to many more of the under-served poor in these regions” as well as move toward “growth targets” set by Blue Orchard [3].
Advans Ghana and Advans Cameroun, two microfinance institutions (MFIs) operating under Advans SA Sicar (Advans SA), recently reported capital increases of EUR 1 million and EUR 2.3 million respectively [1]. Advans SA is managed by Horus Development Finance, a French consulting firm that provides technical assistance to microfinance institutions in developing countries. It owns and frequently partners with Advans SA on projects. Financial data on Horus is not available on MIX Market or on the firm’s website. Co-investors on Advans SA include: Agence Française de Développement (AFD), European Investment Bank (EIB), Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden N.V. (FMO), International Finance Corporation (IFC) and KfW Entwicklungsbank (KfW) [2].
In an article entitled ‘The Next Step for Microfinance: Taking Deposits’ in a recent issue of Time magazine [1], writer Ms Barbara Kiviat highlights the importance of deposit taking in the field of microfinance or what has been referred to by some development experts as the “forgotten half of rural finance.” Ms Kiviat, a staff writer for Time magazine, reiterates the point that whilst microloans are important, the service that a lot of the poor need ‘more than business loans, is a safe place to save their money’.
In a report by Mr Mustaqim Adamrah in the Jakarta Post entitled ‘Govt, Bank Indonesia seek lower rates for micro loans’ [1], it was stated that the Indonesian government and the central bank of Indonesia, Bank Indonesia [2], will work together to bring down interest rates charged by banks to small businesses to around 13 percent under its microcredit program or ‘KUR’. This move was seen as necessary to help Indonesia’s micro, small and medium enterprises. The article notes that Bank Indonesia recently cut its key base interest rate to 6.5 percent last December. It is not known whether the decision to reduce interest rates under the KUR program is related to this development. The details set out in the Jakarta Post article have yet to be confirmed by other public reports or sources at this stage.
Source: World Bank Crisis Talk Blog.
Source: Asia Times Online.
In a report on the Reuters website entitled ‘Balkan loan guarantors struggle to pay others’ debt’ by reporter Daria Sito-Sucic [1], it was stated that guarantors in the Balkan states are increasingly being pursued by lenders to pay up on loans to defaulting borrowers. The article notes that it was common for borrowers to secure guarantees from family and friends in order to rebuild their lives in the immediate aftermath of the war from 1992 to 1995. Mr Sito-Sucic notes that people readily guaranteed loans for friends and relatives after the collapse of Yugoslavia ‘unaware that their backing was no longer a mere formality as during socialist times’. In the past, jobs were more or less secure until the age of retirement and the local currency did not suffer frequent redenomination as it has in post-war times. Now, the impact of the global economic crisis is affecting small businesses and the financial sector in the Balkan region.
XacBank and Horus Noomadic Solutions, a mobile banking platform, has announced the launch of AMAR/mobile banking services for microfinance in Mongolia. AMAR is enabled by Noomadic. According to Noomadic, the launch of AMAR will enable XacBank’s clients to conduct cash-based transaction and payments by using their mobile phones through a network of agents and merchants. AMAR services can be used with all 4 mobile operators in Mongolia (G-Mobile, Mobicom, Skytel and Unitel) [1]. No additional information regarding how the network will function or its scope is provided.
The Netherlands Development Finance Company (FMO) has opened a USD 5 million credit line to the Belarusian Bank for Small Business (BBSB) to primarily help develop the bank’s micro-lending program for small and medium-sized business. The loan is also expected to help in the acquisition of necessary instruments for the bank’s infrastructure development [1]. According to a news report published in the Belarusian news and information agency BelTA, the agreement to open a credit line was signed in Minsk and the line is open for five years with a two year delay in payment. No further information on the credit facility is currently available.