As world leaders haggle over emissions cuts and financial obligations to promote technology transfer to developing nations, a vanguard of microfinance institutions (MFIs) have silently financed purchases of clean energy technologies such as solar panels, biogas digesters, micro hydro dams and clean energy cook stoves in some of the poorest regions of the world. The prevalence of small-scale clean technologies could contribute to the displacement of rapidly expanding coal powered electricity grids to rural areas. Furthermore, it could replace dirty fuels – firewood, animal dung and charcoal – which have significant consequences for human health.
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MICROCAPITAL BRIEF: Microfinance Researcher at Massachusetts Institute of Technology (MIT) Receives Top Economics Prize
Esther Duflo, a contributor to the field of microfinance research, has been awarded the John Bates Clark Medal [1]. The award, which is generally considered to be one of the most prestigious prizes in the field, is given to an economist in the US under the age of forty who is judged to have made the most significant contribution to economic thought and knowledge.
MICROCAPITAL BRIEF: Microfinance Insights Releases Report, “Is Information and Communication Technology Fueling the Growth of Microfinance?”
Microfinance Insights, a publication produced by the social-sector advisory firm Intellecap, recently released a survey report titled, “Is Information and Communication Technology Fueling the Growth of Microfinance?”
MICROCAPITAL BRIEF: United Kingdom’s Department for International Development (DFID) to Provide $12.1m to CGAP (Consultative Group to Assist the Poor) Technology Program to Promote Mobile Banking for the Low-Income Sector
The United Kingdom’s Department for International Development (DFID) will provide GBP 8 million, the equivalent of over USD 12.1 million, to the CGAP (Consultative Group to Assist the Poor) Technology Program.
MICROCAPITAL BRIEF: Equity Bank, UAP Insurance Limited, and the International Livestock Research Institute (ILRI) to Launch Program that Incorporates Satellite Technology to Provide Drought Insurance for Livestock Herders
Equity Bank, a commercial bank based in Kenya; UAP Insurance Limited, an East African insurance provider based in Kenya; and the International Livestock Research Institute (ILRI), an independent institute based in Kenya, will launch a program that allows herders to purchase insurance for cows, goats, sheep or camels in case of starvation during a drought [1,2,3].
MICROFINANCE EVENT: Africa Information and Communications Technology Exhibition & Conference (AITEC) Banking & Mobile Money – West Africa, Lagos, Nigeria; May 11 – May 12, 2010
Event Name: AITEC Banking & Mobile Money West Africa, 2010
Event Description: The theme of this two-day conference is “Innovating to Survive and Thrive in Hard Times.” It will focus on improving upon practices of technological service provision by suppliers and bankers to better reflect customer preferences. The conference invites bank customers to try out new technologies in an exhibition. In discussion panels, microfinance banks will share their experiences in mobile banking, and regulators, bankers and mobile operators will share their experiences in mobile banking regulation strategies.
MICROCAPITAL BRIEF: UnityKapital Assurance Plc of Nigeria Announces Information Technology Development, Expansion into Microinsurance
UnityKapital Assurance Plc, a Nigerian insurance company with a recorded NGN 518 million (USD 3.47 million) profit after tax in 2008, has announced the deployment of a comprehensive information technology (IT) system and an expansion into newer areas of insurance, including Islamic insurance and microinsurance.
MICROCAPITAL BRIEF: Technology Provider Gradatim of India Enjoys $3m Equity Investment from NEA-IndoUS Ventures
Gradatim, an international provider of technology services to microfinance institutions and insurers, has raised USD 3 million in Series A equity funding from NEA-IndoUS Ventures, a venture capital firm that invests in India.
MICROCAPITAL BRIEF: ‘Bank of the Philippines Islands Globe Savings Bank’ (BanKo) Begins Microfinance Pilot Testing Using Mobile Money Technology (MMT) with Intention of Becoming a Branchless Bank
Bank of the Philippines Islands Globe Savings Bank (BanKo), a thrift bank that is expected to become a branchless microfinance bank in the Philippines, has begun pilot testing retail microlending, deposit-taking, and microinsurance using mobile money technology (MMT) [1]. The bank is owned by Bank of the Philippines Islands (BPI), a private commercial bank in the Phillipines; Globe Telecommunications Inc., a telecommunications company based in the Philippines; and Ayala Corp., a holding company with a varied portfolio including BPI’s outstanding stock [1,2,3,4]. BanKo is expected to open its head office in January of 2010 and begin lending to borrowers from the BPI microfinance unit’s client base of 170,000 borrowers [1]. At this point, BanKo is also expected to offer wholesale microlending to clients such as microfinance institutions (MFIs) [1]. Additionally, BanKo will open “regional centers,” not to be confused with branches, in order to establish relationships with MFIs, rural banks, and non-bank financial institutions [1].
MICROCAPITAL BRIEF: Indian Microfinance Technology Provider ‘Financial Information Networks and Operation’ (FINO) Receives $15m in Equity Capital from HSBC Private Equity, Intel Capital, and the International Finance Corporation (IFC)
Financial Information Networks and Operation (FINO), an Indian company that provides technological products to microfinance institutions (MFIs), banks, and insurance companies, has received a INR 70 crore infusion, the equivalent of over USD 15 million, in private equity funding from HSBC Private Equity, the equity investment arm of the Hong Kong bank; Intel Capital, the investment arm of the American semiconductor producer; and the International Finance Corporation (IFC), the investment arm of the World Bank [1,2,3,4,5]. Details of how much was invested by each organization were not made available. Rishi Gupta, Chief Financial Officer of FINO, has stated the capital will be used to help “meet the demand” for various products including servers and biometric cards that store transaction records [1]. The transaction was advised by Avendus Capital, an investment bank based in India [1,6]. In an apparently separate transaction, HSBC and Intel have purchased the stake of FINO formerly owned by Legatum, an investment group based in Dubai [1,7]. Legatum originally bought this stake in 2007 for USD 4.5 million, as reported by MicroCapital [1,8]. According to Mr. Gupta, HSBC and Intel purchased the stake for a “far higher,” though unspecified, price [1]. The percentage stake that HSBC and Intel now have is also unspecified.
MICROCAPITAL.ORG STORY: The Inter-American Development Bank’s (IDB) Multilateral Investment Fund (MIF) Provides $4m Grant for Microfinance Technology Projects in Latin America and Caribbean
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].
MICROCAPITAL.ORG STORY: International Banking Systems Online Journal Publishes Supplement On The Role of Technology In Microfinance And Highlights Importance Of Risk Management Systems
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 ‘Technology for Microfinance – Trends driving the technology’ [2], the authors discuss the growing importance of risk management systems in MFIs. These systems are significant as they allow MFIs to address critical issues such as over-indebtedness, a problem which has become acute for some MFIs in the current financial turmoil, and report to their investors promptly.
NEWS WIRE: Thailand: Yunus Centre at the Asian Institute of Technology to Focus on Non-conventional Ways to Address Poverty
Source: Channel NewsAsia.
MICROCAPITAL STORY: Grameen Foundation’s Microfinance Open Source Technology, Mifos, Wins Sun Microsystem’s 2009 Duke’s Choice Award
Grameen Foundation, a global non-profit organization based in Washington, DC, was awarded the 2009 Duke’s Choice Award from Sun Microsystems for its open source technology, Mifos. Mifos won under the category, “Best Java Technology for the Open Source Community.” An open source software program means the source code is accessible and the software is freely redistributable. Grameen Foundation was established in 1986 and has assets totaling USD 25.0 million as stated in its 2008 annual report. Sun Microsystems is a technology company founded in 1982 and based in Silicon Valley, California with assets worth USD 14.3 billion according to its 2008 annual report. Grameen states that this is the first Duke’s Choice Award for both Grameen Foundation and a microfinance-focused technology initiative.
PAPER WRAP-UP: 2008 Microfinance Technology Survey, by the Consultative Group to Assist the Poor (CGAP)
A joint initiative of the Consultative Group to Assist the Poor (CGAP) and the EU/ACP Microfinance Program, published by Consultative Group to Assist the Poor (CGAP), March 2009, CGAP Technology Survey, 15 pages, available at:
http://www.cgap.org/gm/document-1.9.34552/2008%20Microfinance%20Technology%20Survey.pdf
MICROCAPITAL STORY: M-Banking 2009 Conference in Nairobi Showcases Promise to Enhance Kenya’s Banking Regulations Towards Microfinance Institutions and Mobile Banking Technology
Speaking at a conference on mobile banking, Kenyan Finance Minister Uhuru Kenyatta announced proposed amendments to the Banking Act that would enable commercial banks to partner with non-banking agencies, such as microfinance institutions (MFIs), to reach Kenyans who could not previously access financial services. The Central Bank of Kenya (CBK) is also pushing for further policy guidelines that will enhance the regulatory framework of branchless banking and increase access to internet banking and mobile money transfer services.
MICROCAPITAL PAPER WRAP-UP: Insurance, Credit, and Technology Adoption: Field Experimental Evidence From Malawi, by Xavier Gine and Dean Yang
Written by Xavier Gine and Dean Yang. Published by the Journal of Development Economics, Volume 89, Pgs 1-11, 2009. Available at: http://siteresources.worldbank.org/INTFR/Resources/GineYang-InsuranceMalawi.pdf (35 pgs)
In “Insurance, Credit and Technology Adoption: Field Experimental Evidence From Malawi,” Xavier Gine and Dean Yang determine whether farmers who are insured against production risk have a greater demand for loans in order to invest in new hybrid seed technology than farmers who are uninsured against the failure of the hybrid seeds. This study examines maize and groundnut farmers in Malawi , where the major source of crop failure is the level of rainfall. All the farmers were offered loans to purchase high-yield hybrid maize seeds or improved groundnut seeds. Farmers in 16 areas were also required to purchase weather insurance that would forgive the loan should there be insufficient rainfall. The uninsured loan did contain an implicit limited liability constraint that allowed the lender to seize a portion of the yield rather than the collateral presented by the borrower in case of low yield. 33 percent of farmers offered the uninsured loan accepted the loan. The farmers who were required to buy insurance were 39.4 percent less likely to accept a loan to purchase hybrid seeds.
NEWS WIRE: Kenya: Increase in Technology and Communication Causes Central Bank of Kenya to Push New Banking Rules
Source: Daily Nation