IFMR Capital, a private India-based company that aims to provide liquidity and debt capital to financial institutions that serve poor people, recently securitized a “multi-originator” portfolio of 49,881 loans with a total value of INR 511 million (USD 10.5 million).
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MICROCAPITAL BRIEF: MicroRate’s “The State of Microfinance Investments 2011” Indicates Resilience During Economic Downturn
MicroRate, a US-based microfinance rating agency, recently announced the release of its sixth annual survey of microfinance investment vehicles (MIVs), “The State of Microfinance Investments 2011.”
MICROCAPITAL BRIEF: MicroRate Latin America Approved as Microfinance Rating Agency in Peru, Celebrates 14th Anniversary
MicroRate Latin America, the Lima-based arm of the evaluator of microfinance institutions (MFIs), recently announced that it has been approved as a rating agency by Peru’s Superintendency of Banking, Insurance and Pension Fund Managers (SBS), which reportedly makes it the only regulated rating agency in Peru that specializes in microfinance.
MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) to Loan $3m in Local Currency Somoni to Microfinance Provider Imon International of Tajikistan to Support Small Businesses
The European Bank for Reconstruction and Development (EBRD), an international financial institution headquartered in London, recently announced that it has committed to loan the equivalent of USD 3 million in the local currency, somoni, to Imon International LLC, a microfinance provider in Tajikistan [1]. The loan marks the expansion of EBRD’s Local Currency Lending Programme in Early Transition Countries (ETC) to Tajikistan for the first time. The ETC Initiative aims to stimulate economic activity in the countries served by EBRD that are deemed to face the most significant economic challenges. With this 4-year loan, EBRD aims to allow the Tajik borrowers, including small enterprises, microfinance institutions and small banks, avoid taking on exchange-rate risks, which can force borrowers to repay much more than expected if exchange-rates change significantly.
MICROCAPITAL BRIEF: Wholesale Lenders Agree to Restructure $1b in Debt for Indian Microfinance Institutions (MFIs) Spandana Sphoorty, Asmitha, Future, Share, Trident
Following two months of negotiations, unnamed wholesale commercial lenders have agreed to restructure debt worth INR 5,000 crores (USD 1 billion) for five Indian microfinance institutions (MFIs): Spandana Sphoorty Financial Limited, Asmitha Microfin Limited, Future Financial Services Limited, Share Microfin Limited and Trident Microfin Private Limited.
MICROCAPITAL BRIEF: SKS Microfinance Reconsidering Business Strategy to Rebuild Reputation
SKS Microfinance, a microfinance institution (MFI) that serves groups of impoverished women in India, is reportedly considering new business growth avenues in an attempt to increase revenue and improve its reputation. Along with collateral-free loans, four new products would be offered: loans using gold as collateral, housing loans, loans to buy mobile phones and loans to local grocery stores in a supply arrangement with the cash-and-carry chain, Metro. “The pilot projects have been yielding very encouraging results,” says Vikram Akula, chairperson and founder of SKS Microfinance.
MICROCAPITAL BRIEF: Mexican Microfinance Institution (MFI) Financiera Independencia Places Certificados Bursatiles (Notes) Worth $128m
Financiera Independencia, a Mexican microfinance institution (MFI), has announced the successful placement of unsecured certificados bursatiles (notes) with an aggregate principal value of MXN 1.5 billion (USD 128 million).
MICROCAPITAL BRIEF: Credit Rating and Information Services of India Limited (CRISIL) Predicts Reserve Bank of India Guidelines Will Spur Bank Lending to Microfinance Institutions (MFIs), Trigger Consolidation
The Indian rating agency Credit Rating and Information Services of India Limited (CRISIL) has announced that it expects, “Growth prospects for microfinance institutions (MFIs) will remain subdued over the medium term,” due to microfinance guidelines issued earlier this month by the Reserve Bank of India (RBI), the nation’s central banking authority.
MICROCAPITAL BRIEF: Women’s World Banking (WWB) CEO Mary Ellen Iskenderian Anticipates Risks from “Over-Regulation” of Indian Microfinance Sector
In an email interview published on the website of Indian newspaper Mint, Mary Ellen Iskenderian, President and CEO of Women’s World Banking (WWB), a US-based advisor to and network of microfinance institutions (MFIs), offered an assessment of the Indian microfinance sector and the potential results of new and proposed regulation.
MICROCAPITAL WRAP-UP: Measuring Changes in Client Lives through Microfinance: Contributions of Different Approaches; By Mayada El-Zoghbi and Meritxell Martinez; Published by CGAP (Consultative Group to Assist the Poor)
By Mayada El-Zoghbi and Meritxell Martinez; published by CGAP (Consultative Group to Assist the Poor); May 2011; 4 pages; available at http://www.cgap.org/gm/document-1.9.50966/MeasuringBenefits_Brief.pdf
MICROCAPITAL BRIEF: Planet Rating Recognized as Microfinance Rating Agency by Philippine Central Bank, Bangko Sentral ng Pilipinas (BSP)
Planet Rating, a microfinance rating agency and member of the France-based PlaNet Finance Group, has been recognized by Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, as a microfinance institution (MFI) rating agency. This recognition follows the company’s establishment of a regional office in Manila in 2009.
MICROFINANCE PAPER WRAP-UP: Microfinance in India – A Crisis at the Bottom of the Pyramid; Published by Legatum Ventures
Published by Legatum Ventures; May 2011; 11 pages; available at http://www.legatum.org/attachments/MicrofinanceCrisis.pdf
MICROCAPITAL BRIEF: 17 Websites Now Allow Individuals to Commit as Little as USD 20 as Microfinance Loans
There are now at least 17 websites offering the opportunity for individuals to direct as little as USD 20 to microborrowers in both rich and poor countries, including: Babyloan, Good Return, Kiva, MicroPlace, MyElen.com, MYC4, Veecus, Xetic.org, 51Give, Rang De, Wokai, DhanaX, p2p Microfinance, Zidisha, Inuka, Acceder and OptInNow. Most of these websites post information on potential borrowers that can be viewed by lenders, but most channel funds to microlenders that may use the money to lend to any of their clients. In most cases, these investments do not yield any returns to investors. Others such as MicroPlace, MYC4, MyElen.com, p2p Microfinance, DhanaX and Zidisha pay an interest to their investors. Still others do not allow the “lender” to withdraw funds at any time, instead using the donation to capitalize lending pools.
MICROFINANCE PAPER WRAP-UP: Making Insurance Markets Work for the Poor: Microinsurance Policy, Regulation and Supervision – India Case Study; by Sanjay Sinha and Swetan Sagar; Published by CGAP (Consultative Group to Assist the Poor) Working Group on Microinsurance
By Sanjay Sinha and Swetan Sagar; published by CGAP (Consultative Group to Assist the Poor) Working Group on Microinsurance; January 2009; 127 pages; available at http://www.microinsurancenetwork.org/file/8_India_Impact_RSP_2009.pdf
MICROCAPITAL BRIEF: Microfinance Institution AccessBank of Azerbaijan Receives ‘BB+’ Rating from Fitch
Fitch Ratings, a global rating agency headquartered in New York and London, recently confirmed its ratings for AccessBank, a financial institution in Azerbaijan. AccessBank’s long-term foreign-currency Issuer Default Rating (IDR) was confirmed at ‘BB+’ with ‘Outlook Stable’, its short-term IDR was confirmed at ‘B’ and its Individual Rating was confirmed at ‘D’, all of which are at the ‘sovereign ceiling’ which is generally the highest available in a given country.
MICROCAPITAL BRIEF: Book From Asian Development Bank (ADB)—Rural Finance in Poverty-Stricken Areas in the People’s Republic of China—Suggests Reform of China’s Microfinance Industry
A new book from Asian Development Bank (ADB)—Rural Finance in Poverty-Stricken Areas in the People’s Republic of China—pushes for reforms in China’s rural finance industry, including its microfinance industry, that it argues would help small businesses and alleviate poverty.
MICROCAPITAL BRIEF: The Rating Initiative Presents the Microfinance Rating Market Review 2010
The Rating Initiative, a program implemented to support and encourage the use of financial and social ratings in the microfinance sector, has released the “Microfinance Rating Market Review 2010”.
MICROCAPITAL BRIEF: Indian Rating Agencies, ICRA and Credit Rating and Information Services of India Limited (CRISIL), Predict Microfinance Institution (MFI) Consolidation Would Result From Reserve Bank of India (RBI) Proposals
According to Indian rating agencies Credit Rating and Information Services of India Limited (CRISIL) and ICRA Limited (formerly Investment Information and Credit Rating Agency of India), a recent proposal by the Reserve Bank of India (RBI), India’s central banking authority, to regulate the country’s microfinance industry will result in slower growth and smaller profits for microfinance institutions (MFIs) that will lead to a consolidation in the sector.