K-Rep Bank, a commercial bank that directly targets low income clients in Kenya, received a Kshs 174.8 million (USD 2.2 million) investment from the African Development Bank (AfDB) during May 2009. This financial support will also include technical assistance related to capacity building. K-Rep Bank provides various banking services and specializes in loans to low income, small and micro entrepreneurs. K-rep plans to create 10,000 new jobs by 2011 of which 55 percent would involve women entrepreneurs.
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MICROCAPITAL STORY: European Development Finance Institutions Part 2: KfW Entwicklungsbank Remains One of the Largest Global Investors in Microfinance
KfW Entwicklungsbank (KfW), a development bank that finances investments on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), has made significant contributions to the microfinance sector in recent years. Between January 2007 and April 2009, KfW has invested at least USD 250 million in microfinance services around the world, with its outstanding commitments to the sector likely making that number even higher.
NEWS WIRE: Cambodia: Microfinance Bank ACLEDA Becomes Rich by Lending to Poor
Source: PRI
MICROCAPITAL STORY: Key Indonesia Microfinance Player Bank Danamon Raises USD 362m In Capital
In April, Bank Danamon, Indonesia’s fifth largest lender, completed a USD 362 million stock offering, the largest ever bank stock offering in Indonesia. Citigroup Global Markets Singapore and Morgan Stanley Asia were joint standby purchasers on the deal. Danamon has a very active microfinance division called Danamon Simpan Pinjam (DSP). Although Danamon experienced 30.2 percent drop in year over year first-quarter net profit in 2009, its Capital Adequacy Rating (CAR) increased to 22 percent from 15.4 percent due to the stock offering. In an interview with The Asian Banker, Danamon’s President Director and former Citigroup executive, Sebastian Paredes, stated, “After this capitalisation, Bank Danamon is probably going to be one of the highest capitalised banks in the world.”
MICROCAPITAL STORY: International Finance Corporation Rwanda CEDP Leasing Program Calls for More Leasing to SMEs by Financial Institutions at Workshop Organized by Rwandan Association of Micro Finance Institutions in Collaboration with Rwanda Development Board
The International Finance Corporation (IFC), a member of the World Bank Group that provides investments and advisory services to build the private sector in developing countries, has called upon financial institutions to embrace micro leasing for Small and Medium Enterprises (SMEs) during a micro leasing awareness workshop at the Laico Hotel in Rwanda. The workshop was organized by the Association of Micro Finance Institutions (AMIR) in collaboration with the IFC’s Rwanda CEDP Leasing Development Program and the Rwanda Development Board (RDB).
MICROCAPITAL STORY: Bhartiya Samruddhi Finance Ltd, a Unit of BASIX Group, Raises USD 9.87m in Capital
A recent press release from Intellectual Capital Advisory Services (Intellecap) reports that Bhartiya Samruddhi Finance Ltd (BSFL), a microfinance institution (MFI) based in Hyderabad, India, has received USD 9.87 million in Series-B funding from several investors including Lok Capital LLC, Aavishkaar Goodwell India Microfinance Development Company and Small Industries Development Bank of India (SIDBI). Intellecap, a finance consultancy firm, was BSFL’s advisor on the deal. BSFL’s old investors, including IFC, Shorecap International Ltd, and ICICI Bank, commenced their exit by making a secondary sale of USD 4 million to the new investors. According to Aavishkaar Goodwell, USD 500 million in private equity over the next five years is necessary to facilitate the growth of MFIs in India. BSFL was set up in 1997 by Bhartiya Samruddhi Investments and Consulting Services (BASICS), the holding company of the BASIX group. BASICS currently owns 49.5 percent of BSFL, with investors holding the remaining amount. According to Mr. Vijay Mahajan, the Chairman and CEO of BSFL, “This is a big milestone for us as investors have reposed faith in the BASIX integrated livelihood promotion model over cookie-cutter micro-credit. We are all set to now address our goal of reaching 10 million poor households by 2014.” Donald Peck, the co-founder of Lok Capital, remarked, “We are delighted to be able to support the further growth of BSFL as it embarks on the next stage of roll-out of its unique agriculture and skills focused business models.”
MICROCAPITAL STORY: Government of Sudan Issues Directives Requiring Banks to Allocate 12 Percent of Portfolio to Microfinance
According to the Sudan Vision Daily, The Central Bank of Sudan(CBOS) has issued a circular note detailing directives regarding microfinance to Sudanese Banks. A copy of the circular was not available for this report. As part of its 2009 Central Bank Policy the CBOS has encouraged the development of microfinance aimed at social needs such as housing and agriculture, as well as the deepening of Islamic banking.
MICROCAPITAL STORY: Yemen’s Social Fund for Development (SFD) to Serve 100,000 Entrepreneurs Through Microfinance Programs
The Social Fund for Development (SFD), an agency established by the government of Yemen to implement social and economic development programs, announced a strategic plan to reach 100,000 micro and small entrepreneurs (MSEs) by 2012. The SFD is supporting microfinance programs in Yemen in the belief that MSEs will help to alleviate poverty and reduce unemployment in the country.
MICROCAPTIAL STORY: Fitch Ratings Confirms Long Term Rating of BB+ for AccessBank in Azerbaijan
Fitch Ratings has confirmed the long-term issuer default rating of ‘BB+’ with a Stable Outlook, short-term issuer default rating of ‘B’, and individual rating of ‘D/E’ for AccessBank of Azerbaijan, a for-profit microfinance institution.
MICROCAPITAL STORY: European Investment Bank (EIB), Gates Foundation, and Dutch Development Agency to Provide Technical Assistance Grants to AfriCap Microfinance Fund and FinTech Africa
The European Investment Bank (EIB) announced it is providing a EUR 2 million (USD 2.6 million) grant to support the AfriCap Microfinance Fund through FinTech Africa, to fund capacity building for early-stage and greenfield microfinance institutions across Africa. In addition to the EIB grant, the Bill & Melinda Gates Foundation will contribute a USD 5 million grant to FinTech Africa, the non-profit organization that manages AfriCap’s technical services facility, and the Dutch development agency, FMO, will provide a USD 0.75 million grant.
MICROCAPITAL STORY: Kenya’s K-Rep Bank Brings in New Manager as a Response to $4.4m Loss in 2008
K-Rep Bank, a Kenyan commercial bank that targets the microfinance sector, appointed Gerard Monteiro as the new Chief Operations Advisor after reporting a Sh 349 million (USD 4.4 million) loss for 2008. It is hoped that Mr. Monteiro, a 33-year veteran of the banking and microfinance sectors, will help to reverse the five-year low-profitability trend K-Rep Bank has faced.
PRESS RELEASE: Luxembourg: New Independent Company INNPACT Offers Specialized Consulting of Microfinance Investment Vehicles and Other Sustainable Businesses
Source: Innpact
MICROCAPITAL EVENT: Investments in Microfinance 2009: Conference on Surviving the Liquidity Crisis and Ensuring Sustainable Growth to be held in London, United Kingdom from July 7-8, 2009
Investments in Microfinance 2009: Surviving the Liquidity Crisis and Ensuring Sustainable Growth
July 7-8, 2009, London, United Kingdom
HansonWade Ltd., a London based research firm will host Investment in Microfinance 2009, a two-day conference event in London on the 7th and 8th of July, 2009. The event is focused specifically on the theme ‘Surviving the Liquidity Crisis and Ensuring Sustainable Growth’ and will explore how key microfinance institutions (MFIs) and funds are changing their strategies to ensure survival amidst the financial crisis. Participants at the event include institutional investors, portfolio managers, equity investors, consultants, asset managers, philanthropic investors and socially responsible investors. Key organizations participating in this event include the Deutsche Bank, JP Morgan, CitiGroup, Ford Foundation, Rockefeller Foundation, SKS Microfinance, Blue Orchard, IFC, KFW and Women’s World Banking among others. The event will be held at the Hilton Easton Hotel in London.
MICROFINANCE EVENT: Women Advancing Microfinance NY Present Women’s World Banking’s new publication Panel Discussion New York, April 16th
Transforming the Landscape of Leadership in Microfinance: Maintaining the Focus on Women
April 16, from 6:00-8:00 p.m.
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.
MICROCAPITAL STORY: Cambodian Microfinance Lenders See Number of Non-Performing Loans Rising Above 1 Percent in 2009
According to a report in the Phnom Penh Post, Cambodian microfinance institutions predict that as the economic crisis spreads, their level of non-performing loans (NPLs) will grow. “Our major concern now is that nonperforming loans will go up,” said Bun Mony, a member of the board of the Cambodian Microfinance Association (CMA) and chairman of Sathapana Limited, a Cambodian MFI with 37,000 clients. “We forecast that NPLs will increase to 1 percent or higher this year due to the economic downturn that is affecting our clients’ incomes.” According to Bun Mony, the NPL rate at his institution was only 0.16 percent at the same time last year. Even as the global economy slows, Bun Mony still expects his overall loan portfolio to grow. Sathapana lent USD 37.5 million last year and expects that to rise to USD 44.5 million in 2009.
MICROCAPITAL EVENT: Belgrade to Host Twelfth Annual MFC Conference of Microfinance Institutions Jointly Organized with Microfinance Development Fund Serbia, Co-Sponsored by responsAbility and Blue Orchard
12th MFC Conference of Microfinance Institutions – Global Crisis: Threat or Opportunity for Microfinance?
MAY 25-27, 2009, The Continental Hotel, Belgrade, Serbia
MICROCAPITAL STORY: Economic Downturn Forces the Cambodian Microfinance Sector to Scale down Recruitment Plans
The rate of job creation and recruitment in the Cambodian microfinance sector is expected to drop sharply this year, according to microfinance industry experts in the region. A press release on the Cambodian based newspaper Phnom Penh Post states that the current global crisis has forced the fast-expanding microfinance institutions (MFIs) in the region to scale down their recruitment plans. The release quotes Mr. Bun Mony, Chairman of the Cambodian MFI Sathapana Limited and member of the Cambodian Microfinance Association (CMA), as saying that the sector-wide employment growth in the region is expected to be only around 5 to 10 percent this year. As per available estimates, this year’s growth forecast is far lower than the past few years which had registered growths of nearly 30 percent.