Event Name: Webinar: Data Driven Social Performance Management
Event Dates: English-language webinars will be held on May 26, 2015, at 7:00 AM Eastern US Time and May 27, 2015, at noon Eastern US Time. A Spanish-language version of the webinar will be held on May 28, 2015 at noon Eastern US Time.
Advans SA, a Luxembourg-based venture capital company, has announced the launching of operations by its ninth affiliated microfinance institution, Advans Tunisie.
The Sanad Fund for MSME (micro-, small and medium-sized enterprise), a Germany-based provider of “medium- and long-term” and equity financing in the Middle East and North Africa, recently agreed to loan the equivalent of USD 5 million in local currency to Enda Inter-Arabe, to help it expand its lending into additional underserved areas of Tunisia.
The Sanad Fund for MSME (micro-, small and medium-sized enterprise), a Germany-based fund providing medium- and long-term debt and equity financing in the Middle East and North Africa, recently disbursed a senior loan of USD 3 million to Al-Amal Microfinance Bank (AMB), a nonprofit minority-held by the government of Yemen, to support micro- and small enterprises (MSE) in the country.
This opinion piece was contributed by David MacDougall, a consultant based in the US city of New York.
Microfinance inspires optimism. Investors – especially private equity investors – anticipate handsome returns; aid agencies see strong social impact; and microfinance institution (MFI) managers are certain they can grow themselves out of every tight situation. While microfinance can play an important role in development, most MFIs nevertheless are relatively simple financial institutions that need to be grounded in sound market and business principles rather than pie-in-the-sky expectations. These “Business 101” principles, which may sound like common sense truisms, in my experience, have not trickled down to many MFIs. In over 10 years of examining the viability of MFI business models as an analyst and risk manager, I have seen decision makers fail again and again to do reality checks. What’s still urgently needed is sound market analysis and professional risk management.
The Deutsche Investitions- und Entwicklungsgesellschaft GmbH (DEG), a German development finance institution offering long-term project and company financing, and the European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, have announced that the two institutions will collectively loan the equivalent of USD 10 million to Bai Tushum Bank (BTB), a provider of microfinance services in the Kyrgyz Republic.
Développement international Desjardins (DID), a Canadian nonprofit providing technical support and investment for the community finance sector in emerging economies, has announced that it will establish four new entrepreneur financial centers (EFCs) in Africa and Latin America.
Event Name: Services for the Poor: Lessons and Implications of the Latest Research on Credit
Event Date: February 27, 2015
Event Location: Preston Auditorium, World Bank Headquarters, Washington DC
Cost: The event is free of charge, however advance registration is necessary.
Summary of Event: This conference will present the findings from randomized evaluations that evaluate the impacts of microfinance in Bosnia and Herzegovina, Ethiopia, India, Mexico, Mongolia and Morocco. Attendees also will explore tools intended to increase the outreach and impact of financial services for low-income people.
The International Finance Corporation (IFC), a member of the US-based World Bank Group that offers financial services to businesses and governments in developing countries with the aim of increasing economic growth, recently raised its stake in Bandhan Financial Services, an India-based microfinance institution (MFI) that offers loans for health emergencies and microenterprise, with an investment of INR 5.8 billion (USD 94.4 million).
The Sanad Fund for MSME (micro-, small and medium-sized enterprises), a Germany-based fund providing loans in the Middle East and North Africa, recently provided a senior loan of USD 20 million to Amen Bank, a Tunisia-based private commercial bank.
The European Bank for Reconstruction and Development (EBRD), a multilateral financial institution headquartered in England, recently extended loans to Finansbank, a commercial bank in Turkey that is a subsidiary of the National Bank of Greece Group, and Bank CenterCredit (BCC), a Kazakhstan-based joint stock company.
The European Investment Bank (EIB), the Luxembourg-based long-term lending bank of the European Union (EU), recently approved two financing agreements with a total value of EUR 21 million (USD 25.2 million).
“Multiple borrowing was endemic,” in Bangladesh as of 2008, says Shameran Abed, the director of microfinance at Bangladesh-based Brac International, “but we didn’t know if this was bad, although we knew it was a risk.” Mr Abed was speaking this morning at the opening plenary of the last day of European Microfinance Week, which is organized by the Luxembourgish NGO European Microfinance Platform (e-MFP). In the past, he explained, the members of borrowing groups were good at letting Brac staff know who was a good credit risk. As the market was getting saturated, “Groups became less cohesive, so we couldn’t totally rely on them to tell us if individuals were becoming overindebted.”
Today, the University Meets Microfinance Action Group of the European Microfinance Platform (e-MFP) is presenting awards of EUR 500 (USD 620) each to students Hayyan Alia for “A Modified Household Economic Portfolio Model for Assessing Impact of Microfinance Using Diaries” and Eike Haas for his paper titled “Do Agent-assisted Banking Beyond Branches Channels Decrease Costs in Downscaling? A Qualitative and Quantitative Review.” The group also met earlier in the day as part of the series of Action Group meetings held during the first day of European Microfinance Week, which is hosted by e-MFP, a 130-member NGO located in Luxembourg.
The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral financial institution, along with the European Union Delegation to Turkey, the Turkish Employment Agency and the Ministry of Labour and Social Security of the Republic of Turkey recently launched the “Finance and Advice to Women in Business” program, an initiative that aims to strengthen and increase the role of women in the Turkish economy.
MicroCapital: Please describe one of the key issues to be covered this year at European Microfinance Week.
Christoph Pausch: The question of over-indebtedness is still the major risk for the sector, as identified in the most recent Banana Skins survey. We had a very successful plenary last year exploring the issue from a research perspective. This year, we’re taking a very different approach by bringing CEOs of leading microfinance institutions (MFIs) from three countries – Bangladesh, Morocco, and Mexico – to discuss how they’ve been dealing with the issue. Each of these countries has had a different experience, with Bangladesh having successfully averted a potential crisis by slowing market growth (as described in an excellent paper by Stuart Rutherford and Greg Chen). Morocco was one of the original “microfinance crisis” countries during 2008 and 2009, and the MFIs there have had an interesting experience in resolving the problems from that period. Finally, Mexico is a major market with serious concerns regarding over-indebtedness, and MFIs there are working to avert a potential crisis.
The European Investment Bank (EIB), the Luxembourg-based long-term lending bank of the European Union (EU); the Banque Tuniso-Koweitienne [Tunisian-Kuwaiti Bank] (BTK), a financial institution founded by the governments of Tunisia and Kuwait; and the Tunis Entrepreneurship Network (TEN), an association that assists entrepreneurs and small businesses in Tunisia, reportedly have announced a draft agreement to finance micro-, small and medium-sized enterprises (MSMEs) in Tunisia.
The European Bank for Reconstruction and Development (EBRD), a UK-based development bank that operates in eastern Europe, central Asia and northern Africa, has loaned USD 5 million to DemirBank, a commercial bank in Azerbaijan that focuses on lending to small and medium-sized enterprises (SMEs), with the intention of promoting projects that reduce energy use in the country.