by Mary Fu -

MICROCAPITAL STORY: SKS Microfinance Expands into Kerala, India with Two Branches

SKS Microfinance Private Limited, an Indian microfinance institution (MFI), launched operations in Kerala, marking it as the fifteen state in which SKS is active. According to SKS Chief Operating Officer M.R. Rao, Kerala has been targeted on SKS’ growth map for a while because of the demographics of its inhabitants, who are largely dependent on fishery and handicrafts as primary sources of income in a state where 360,000 of 1,900,000 total poor households are headed by women.

by Mary Fu -

MICROCAPITAL STORY: Indian Grameen Services (IGS) to Expand Microfinance Services into Poorest Regions of India

Indian Grameen Services (IGS), the research and development arm of BASIX, a financial and technical services group based in Hyderabad, India plans to expand its business operations into Bihar, Jharkhand, Chattisgard, Uttaranchal, Uttar Pradesh and parts of Rajasthan, all of which rank among the poorest parts of India. Please note that neither IGS nor BASIX is affiliated with Grameen Bank.

by Elizabeth Nelson -

MICROCAPITAL STORY: State-owned Indian Bank of Baroda (BoB) Partners with Centre for Micro Finance (CMF) for Microfinance Initiative in Dungarpur

As part of its initiative to reach the unbanked Indian population with microfinance, state-owned Bank of Baroda (BoB) has signed a memorandum of understanding (MoU) with the Centre for Micro Finance (CMF), a microfinance research institute. As of March 2007, the Bank of Baroda had 38,000 employees and 2,700 branches in 21 countries. It had USD 36.4 billion (INR 143,146 crore or 1.43 trillion) in total assets and a return on assets (ROA) of 0.72 percent.

by Elizabeth Nelson -

MICROCAPITAL STORY: Indian Bank to Open Four New “Microstate” Microfinance Branches

Indian Bank, one of the largest public sector banks in India, recently announced its plans to open four additional branches exclusively for microloans across India by the end of 2007. These “Microstate” branches will be opened in Bhubaneswar, New Delhi, Pune and Bangalore and will augment the 12 existing Microstate branches which have already credit-linked approximately 230,000 self help groups (SHGs) to USD 388 million (INR 1545.48 crore). In addition to providing credit to the urban poor, the Microstate banks provide non-credit services such as training, counseling and marketing assistance.

by the MicroCapital Team -

MICROCAPITAL STORY: Indian Politician Sharad Joshi Questions Track Record of NABARD and Microfinance in General

Sharad Joshi, founder of Shetkari Sanghatana (Farmers Movement) and Member of Rajya Sabha (the upper house of the Indian Parliament), questions the recent emphasis on microfinance by the Indian government. He contends that microfinance has not been a great success in India and that increasing government encouragement of microfinance is not justified. His words follow:

by Elizabeth Nelson -

MICROCAPITAL STORY: Opportunity International Australia Raises $30m to Supply One Million Indian Entrepreneurs with Microfinance

Opportunity International Australia, part of the global non-profit microfinance network Opportunity International, has raised USD 30 million from Australian donors in the last 12 months. The organization will use the funds to supply loans and business services to micro-entrepreneurs across India.

by Amy Rennison -

MICROCAPITAL STORY: 3 Million More Rural People to Benefit from Smartcard Technology That Enables Microfinance in India

The Government of Andhra Pradesh in India has proposed to roll out Smartcard technology to a further 3 million rural people in 8 districts in the state, giving them access to a bank account for the first time. The Smartcard technology provides access to banking facilities for low-income groups in areas without existing financial services infrastructure.

by the MicroCapital Team -

NEWS WIRE: Brazil & India: Microfinance Is Both a Lifeline For Millions And a Valuable Asset Class

Source: Financial Times.

Original article available here.

SÃO PAULO and NEW DELHI, November 14 – When the Progesar Foundation microfinance office offered to lend her 4,000 pesos at an interest rate of 5 per cent per month, Nilda Peralta could hardly believe her luck. “It seemed there was a trick because the rate they were charging was so low,” says the 57-year-old Argentine shopkeeper. “If I had borrowed from the money lenders I would have had to pay 28 per cent.”

by Elizabeth Nelson -

MICROCAPITAL STORY: Microfinance Investor Netherlands Development Finance Company (FMO) to Establish $125m Fund to Support Small and Medium-sized Enterprises (SMEs) in India

The Netherlands Development Finance Company (FMO), a development bank founded by the Dutch government and business community in 1970, plans to establish a USD 125 million fund in India which will finance family-owned small and medium-sized enterprises (SMEs). The proposed Banyan Tree Fund will receive a USD 25 million contribution from FMO. The bank is in talks with Indian investors and other international development finance institutions to fund the balance amount.

by Elizabeth Nelson -

PAPER WRAP-UP: Sustainability of Self-Help Groups in India: Two Analyses

By Jennifer Isern and Robert Peck Christen, et al, published by the Consultative Group to Assist the Poor (CGAP), Occasional Paper No. 12, August 2007, 48 pages, available at http://www.microfinancegateway.org/files/43637_file_OccasionalPaper_12.pdf

The paper reports the findings of two separate studies: one which analyzes the financial sustainability of self-help groups (SHGs) in India and the other which examines whether or not the SHG model can be successfully replicated in other areas of the world.

The two analyses draw several significant conclusions, including:
1) Many well-run SHGs are achieving financial sustainability,
2) SHGs reach very poor and marginalized clients, and
3) Well-executed SHGs have very high repayment (over 95 percent in some cases) of external loans they receive from commercial banks.

by Amy Rennison -

MICROCAPITAL STORY: The Institute for Financial Management and Research (IFMR) Trust to Launch USD 40 million Fund for Start-Up Microfinance Institutions in India

The Institute for Financial Management and Research (IFMR) Trust of India is to establish a USD 40 million investment vehicle called the Microfinance Classic Fund to provide funding to early-stage microfinance institutions (MFIs). A group of investors including ICICI Bank, India’s second-largest bank with total assets of USD 79 billion, is supporting the IFMR Trust with the initiative. The fund will have both domestic and offshore fund status and it will be registered overseas to facilitate investments from international institutions.