The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) has approved a USD 3.95 million grant for a program promoting the use of technologies by microfinance institutions (MFIs) in Latin America and the Caribbean (LAC). The program, set to begin early next year, will cost a total of USD 10 million. MFIs in the region are invited to submit proposals, whereupon selected MFI proposals with the most “innovation and capacity to achieve measurable results” will receive support to develop and implement a technology strategy [1].
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MICROCAPITAL.ORG STORY: Inter-American Development Bank (IDB), Overseas Private Investment Corporation (OPIC), Inter-American Investment Corporation (IIC), BlueOrchard and Other Investors Establish Microenterprise Growth Facility to Loan $250m to Latin America and Caribbean MFIs
In April, MicroCapital reported that President Obama, in response to the global financial crisis, announced the launch of a Microfinance Growth Fund for the Western Hemisphere to provide lending to small businesses in the region [1]. In response to this announcement, the following organizations have signed an agreement establishing the Microenterprise Growth Facility (MIGROF), a public-private partnership intended to provide USD 250 million in lending to microfinance institutions (MFIs) in Latin America and the Caribbean (LAC): BlueOrchard Finance S.A., a Swiss microfinance investment management company, which has been appointed to exclusively manage the facility; The Inter-American Development Bank (IDB), a development financial institution; the Overseas Private Investment Corporation (OPIC), an independent U.S. government agency which aims to facilitate investment in developing countries; the Inter-American Investment Corporation (IIC), an affiliate of the IDB which supports private sector and capital market development in LAC countries; and the Corporación Andina de Fomento (CAF), a multilateral financial institution which supports sustainable development in LAC countries [2].
MICROCAPITAL.ORG STORY: Peru Ranks First in 2009 Microscope Microfinance Index, A Global Index on Business Environment for Microfinance Developed by the Economist Intelligence Unit (EIU), Released by the Inter-American Development Bank (IDB), the Corporación Andina de Fomento (CAF), the International Finance Corporation (IFC), and the EIU
Peru has been named the best country for microfinance in terms of business climate by the 2009 Microscope microfinance ranking from the Economist Intelligence Unit (EIU), the research arm of the Economist Magazine that provides “country, industry and management analysis” [1,2,3]. The 2009 Microscope was published jointly by the Inter-American Development Bank (IDB), the “main source of multilateral financing” in Latin America and the Caribbean, the Corporación Andina de Fomento (CAF) the primary source of multilateral financing in the Andean region, the International Finance Corporation (IFC), the investment arm of the World Bank, and the EIU [4,5,6]. Last year, Peru was named the best country for microfinance in Latin America and the Caribbean. This was covered by Microcapital in October of 2008 [7,8,9]. This year, the rankings were made globally and Peru still topped the list of 55 countries [1].
PRESS RELEASE: IDB, CAF, OPIC, BlueOrchard, ACCION, FONIDI, FMO Sign on to $250m Latin American Microfinance Fund
Source: Inter-American Development Bank.
MICROCAPITAL.ORG STORY: Inter-American Development Bank (IDB) Approves USD 7 Million Loan for Salvadorian Housing Fund Fondo Nacional de Vivienda Popular’s (FONAVIPO)
The Inter-American Development Bank (IDB), a development financial institution (DFI), has approved a USD 7 million loan for the Fondo Nacional de Vivienda Popular (National Fund for Housing a.k.a. FONAVIPO) in El Salvador. The program was established to assist low-income individuals and families in acquiring homes. The IDB has invested USD 70 million in housing for low income families in El Salvador since 2001 [1].
NEWS WIRE: India: Microfinance Institution Bandhan to Borrow $51m from Small Industries Development Bank of India (SIDBI)
Source: The Economic Times.
MICROCAPITAL STORY: The International Finance Corporation (IFC) in Washington, DC and European Investment Bank (EIB) in Luxembourg Create the Global Emerging Markets (GEMs) Risk Database Consortium with the European Bank for Reconstruction and Development (EBRD), African Development Bank (AfDB), and Inter-American Development to Join (IDB)
The International Finance Corporation (IFC), a member of the World Bank Group, and the European Investment Bank (EIB), the long-term lending bank for the European Union (EU), have agreed to create a Global Emerging Markets Risk Database Consortium. Other international financial institutions (IFIs) that will be joining the Consortium include the European Bank for Reconstruction and Development (EBRD), the African Development Bank (AfDB), and the Inter-American Development Bank (IDB). The Consortium is to pool data on individual institutions and strengthen risk-management practices among multilateral banks.
MICROCAPITAL STORY: Islamic Development Bank (IDB) Grants $10m Loan to the Development and Employment Fund (DEF) of Jordan
The Islamic Development Bank (IDB) has extended a USD 10 million soft loan to the Development and Employment Fund (DEF) in Jordan to develop microfinance in the country. The IDB consists of 56 countries that are all members of the Organization of the Islamic Conference and contribute to the bank’s capital. In addition to facilitating trade among member countries, the IDB grants loans and provides funding for social and economic development projects in member countries. Because the financial operations of the IDB are intended to be consistent with Shariah law, the IDB also provides technical assistance and training in Shariah banking practices. For more information on the how Shariah law affects banking practices in general and microfinance in particular, see this MicroCapital Paper Wrap-Up. The IDB was founded at the Conference of Finance Ministers of Muslim Countries in Jeddah in December 1973 and commenced operations in October 1975. The DEF is a public government fund that commenced operations in 1991 with the objective of promoting independent employment and developing the small business sector. Initially under the government’s Industrial Development Bank, the DEF has been independently managed since 1992.
MICROCAPITAL STORY: IDB and Fundación Telefónica Present Report on Mobile Communications and Access to Financial Services in Latin America and the Caribbean
The Inter-American Development Bank (IDB) and Fundación Telefónica have recently presented a report on mobile communications and access to financial services in Latin America. The report is a result of a dialogue between public and private sector leaders, carried out through a series of workshops organized by the Multilateral Investment Fund (MIF) – a division of the IDB – and Fundación Telefónica. The report analyses the level of development of mobile technologies and financial services in eight countries throughout Latin America and the Carribean. A copy of the report was still unavailable at the time of this release.
MICROCAPITAL STORY: Inter-American Development Bank (IDB) and Corporación Financiera de Desarrollo (Cofide) Put USD 20 Million Towards Financial Facility Aimed at Low-Income Housing
The Inter-American Development Bank (IDB), a Latin America focused microfinance institution (MFI), and Corporación Financiera de Desarrollo (Cofide), a government-run development bank created in 1992, have developed a financing facility, which would allow Peruvian MFIs to support the country’s low-income housing market. Peru’s low-income housing deficit currently stands between 1.7 million and 2.1 million units. Both IDB and Cofide have allocated USD 10 million to supporting the program, which could potentially help six to ten micro-lenders and finance thousands of home loans.
MICROCAPITAL STORY: IDBI Fortis Life Insurance Launches Group Microinsurance Plan; Samhita Community Development Services (SCDS) Become the First Policyholders
IDBI Fortis Life Insurance Co. Ltd., a relatively new Indian private life insurance company, has launched a new Group Microinsurance Plan. The plan provides affordable life insurance coverage to groups such as microfinance institutions (MFIs), self help groups (SHGs), and non-governmental organizations (NGOs). The plan insures the lives of the group members as well as provides protection from loan liabilities in the case of death of the primary earner of the family.
MICROCAPITAL STORY: Small Industries Development Bank of India (SIDBI) to Give $61.7m to MFIs
The Small Industries Development Bank of India (SIDBI) intends to lend Rs 300 crore, USD 61.7 million, to microfinance institutions in Orissa, India, by the end of 2010. To date, SIDBI has disbursed Rs 250 crore, or USD 51.4 million to MFIs in Orissa. The terms of the financing were not disclosed. Currently Rs 100 crore is outstanding to 20 Orissa MFIs. The bank plans to increase this number by 50 new MFIs over the next two years.
MICROCAPITAL STORY: India’s IDBI Bank Ltd. Increases Credit to MFIs While Orissa State Government Calls for Banks and MFIs to Meet Lending Targets
India’s state-owned Industrial Development Bank of India Limited (IDBI) has announced measures to increase the amount of credit to the microfinance industry. According to the Trading Market, the IDBI has reduced the interest rates for microenterprises, increased working capital limits, reduced the margin payment and provided softer loan terms for micro, small and medium sized enterprises (MSMEs). Loans for microenterprises have been reduced by 100 basis points from interest rates on November 30, 2008. It is also planning to grant need-based “ad hoc” working capital demand loans to MSMEs repayable in one year, as well as providing “adequate” increases in working capital limits to MSMEs.
PRESS RELEASE: IDB Fund Provides Emergency Liquidity Facility for Microfinance Institutions
Source: Inter-American Development Bank
PRESS RELEASE: IDB Group Supports Guatemalan Bank’s Expansion into Microfinance
PRESS RELEASE: IDB Group supports Guatemalan bank’s expansion into microfinance
MICROCAPITAL STORY: Cisco, SIDBI and TREC-STEP Partner to Create ICT Entrepreneurship Pilot Project in Tamil Nadu, India
A unique information and communications technology (ICT) entrepreneurship development programme will be launched in the Tamil Nadu state in the South-eastern part of India. The project will be run through a partnership between Cisco Systems, the Small Industries Development Bank of India (SIDBI) and Tiruchirappalli Regional Engineering College-Science and Technology Entrepreneurs Park (TREC-STEP). Each partner will play an active role in the pilot programme, with SIDBI providing finance to small ICT businesses in India which will be run by former and current Cisco Networking Academy students. Cisco will subsidize the interest repayment and guarantee fees on the loans and TREC-STEP will provide customized training and mentoring to participants.
MICROCAPITAL STORY: India’s Ujjivan Increases Equity With Investments By Unitus Equity Fund, Bellwether Microfinance Fund, Michael and Susan Dell Foundation, Sequoia Capital, Lok Capital, India Financial Inclusion Fund and SIDBI
Ujjivan Financial Services, a Bangalore-based microfinance institution (MFI), has completed the fourth round of equity infusion by raising Rs 940 million (USD 18.7 million) making it the fourth highest capitalised MFI in India with total paid up capital and reserves standing at over Rs 1.08 billion (USD 21.5 million) The increase in capital was largely invested by existing shareholders including Unitus Equity Fund (UEF) managed by Elevar Equity L.L.C., Bellwether Microfinance Fund, Michael & Susan Dell Foundation, A.W. Holdings and individual investors including promoter & CEO Samit Ghosh. The five new investors in this private placement transaction will include: Sequoia Capital, Lok Capital, Unitus Equity Fund II, India Financial Inclusion Fund and SIDBI.