Unitus, a non-profit consultancy and venture capital firm, has announced three new microfinance institutions (MFIs) in India which it will bring under its wing as partners. By doing so Unitus will provide consultancy advice and financial support, aiming to accelerate the growth of each organisation, and by 2010 expects them to collectively serve more than 650,000 clients; a combined growth of nearly 1000%. Unitus partners are selected for their operational strength, growth strategies and leadership vision. Geof Davis, president and CEO of Unitus, has said that Adhikar, the Institute of Integrated Resource Management (IIRM), and Vardan Trust have all been chosen as they “embrace our philosophy of rapid, high impact growth.”
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MICROCAPITAL STORY: Indian Microfinance Firm Sandana Partners up with Global Money Transfer Company Western Union
Western Union, a global leader in money transfer services, has confirmed a partnership with Sandana, a microfinance institution housed in the city of
MICROCAPITAL STORY:SHARE Microfin Ltd. Receives Historically Largest Indian Microfinance Equity Investment from Legatum and Aavishkaar Goodwell
Private firms Legatum and Aavishkaar Goodwell have agreed to a joint equity investment of USD 27 mm in the capital shareholdings of SHARE Microfin Limited (SML), a microfinance institution (MFI) of India. With a USD 25 mm share of the equity investment, Legatum gains the majority interest of SML, while Aavishkaar Goodwell acquires a minority interest in the MFI with USD 2 mm. The equity investment reaches a record high for Indian SMLs, becoming the largest equity investment of capital ever received by an Indian MFI. SML speculates that the new finances will provide an additional five million loans across five years.
Continue reading “MICROCAPITAL STORY:SHARE Microfin Ltd. Receives Historically Largest Indian Microfinance Equity Investment from Legatum and Aavishkaar Goodwell”
MICROCAPITAL STORY: Who’s Who in Microcapital: ICICI Bank, India
ICICI Bank is a subsidiary of the Industrial Credit and Investment Corporation of India Limited (ICICI Ltd), a development financial institution established in 1955 by the World Bank, the Government of India, and representatives of Indian industry. ICICI Bank was promoted in 1994 as the banking division of ICICI Ltd and is now the second largest bank in India. In March 2007 the bank reported total assets of USD 79bn and currently has 950 branches in India as well as a presence in 18 different countries. The company operates in corporate finance, commercial banking, investment banking and asset management among other areas, in addition to microfinance. Continue reading “MICROCAPITAL STORY: Who’s Who in Microcapital: ICICI Bank, India”
MICROCAPITAL STORY: SKS Microfinance, India, and Citibank Announce USD 44mm Financing Programme with Support from Grameen Foundation
Indian microfinance institution (MFI) SKS Microfinance, has announced a USD 44mm (Rupees 1.8bn) financing partnership with Citibank, part of the Citigroup global financial services organisation. Citibank India will purchase loans which SKS will continue to originate and service, sharing the credit risk of the transaction. Grameen Foundation will also be an integral part of the risk sharing structure as it will provide a limited (but as of yet unstated) guarantee to SKS as part of its Growth Guarantee initiative launched in 2005. SKS has been a Grameen Foundation partner since 2002.
ABN-AMRO Reports Strong First Quarter Growth in India and its Microfinance Operations
ABN-AMRO bank, based in the Netherlands, has recently reported strong growth in its Indian operations, including the microfinance sector. For the year ending March 31st 2006 the bank’s total profit in India grew 23.7% to 2.4bn rupees (EUR 42.9mm). For the first part of 2007 (January – March) ABN-AMRO said their Indian operations had their best quarter ever, as the balance sheet grew 52.9% to Rs. 235.4bn (EUR 4.2bn) and revenue increased by 48%.
Microfinance Innovation Competition Run by Intellecap and Aavishkaar Goodwell India Declares Vijaya Switha of Chitrika as Winner with Runners Up from Rickshaw Bank and DhanaX
Winners of the 2007 Srijan Microfinance business Plan Competition Award, based in India, were recently announced. The awards are organised by Intellecap, a consultancy firm which works in business innovation, capacity development, and investment initiatives in the development sector, and the Aavishkaar Goodwell India Microfinance Development Company (AGI), which runs microfinance venture capital funds. The top 3 awards include cash prizes of 150,000 rupees (USD 3,600), Rs. 100,000 (USD 2,400) and Rs. 50,000 (USD 1,200) as well as mentoring support from Intellecap for the new initiatives. The organisers say the competition intends to recognise new ideas and encourage innovative thinking and entrepreneurial spirit in the sector.
Indian Microfinance Institution Cashpor Receives a USD 1.16 mn Loan from HDFC Bank and a USD 111,500 Guarantee from the Grameen Foundation
Cashpor, an Indian microfinance institution (MFI), received a USD 1.16 mn line of credit from HDFC Bank, also based in
Continue reading “Indian Microfinance Institution Cashpor Receives a USD 1.16 mn Loan from HDFC Bank and a USD 111,500 Guarantee from the Grameen Foundation”
International Finance Company (IFC) Invests USD 5 mn in Indian Financial Information & Operations Limited (FINO) India
The private sector arm of the World Bank Group, the International Finance Company (IFC), agreed to invest up to USD 5 mn in India’s Financial Information Network & Operations Limited (FINO), a technology service provider that helps banks reach underserved rural banking markets. The USD 5 mn investment is broken down into two USD 2.5 mn halves. The half of the investment consists of common equity with the second as convertible preferred shares. The investment will support mobile banking solutions to enable rural banks, cooperatives and microfinance institutions (MFIs) to provide costs effective financial services in rural India.
Despite Global Job Cuts Citigroup Hiring Microbankers in India
Despite reports that they are planning job cuts in relatively expensive locations across the globe such as New York, London and Hong Kong, Citigroup Inc, the US based financial services organisation, is planning to open more branches and expand its workforce throughout India, especially in the microfinance area. The news follows the addition of more than 4000 staff in India over the past year, bringing Citigroup’s total employees there to 22,000.
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Sequoia Capital Leads USD 11.5mm Investment in SKS Microfinance based in India
Sequoia Capital, a private equity fund founded in 1972 and based in California, will lead an USD 11.5mm investment into SKS (Swayam Krishi Sangam) Microfinance, a microfinance institution (MFI) based in India. Other stakeholders in the investment include Unitus, a USD 23mm US equity fund established in 2000 to provide funding and consultancy to MFI’s.
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The Industrial Credit and Investment Corporation of India (ICICI) Begins Offering Microfinance to Prostitutes as Alternative
The Industrial Credit and Investment Corporation of India (ICICI Bank), India’s second largest bank, is planning on offering microfinance services to sex-workers as a way to provide sustainable opportunities to change professions. ICICI Bank plans on launching the program in Kolkata through a relationship with Durbar Mahila Samwanaya Samitee, a local NGO serving 65,000 sex-workers.
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Is Anyone Home? India Looks to Bring Bureaucracy and Conflict of Interest to Microfinance by Putting the National Bank for Rural and Agricultural Development in Charge of Microfinance Regulation
The Union Cabinet of India cleared a bill, against substantial opposition, that will empower the National Bank for Rural and Agricultural Development (NABARD) to regulate the Indian microfinance sector. Only microfinance institutes (MFIs) operating in the form of trusts, societies and cooperatives will be controlled by NABARD, excluding non-bank financial institutions. This will require all such MFIs to register under the Microfinance Development Council (MDC), which will be a NABARD entity. The MDC will allow MFIs to raise savings only after getting specific approvals from the council. The creation of the MDC will also require the creation of a microfinance ombudsman as an appointed position.
Through Foundation, Insurer Munich Re Hosts Leading Microinsurance Conference in Mumbai India November 13-15, 2007
The huge insurer Munich Re is making a strong play to host the industry standard conference for microinsurance. Below, please see the invitation to submit session proposals for the conference to be held November 2007 in Mumbai, India. Last year’s conference was in Cape Town (please see MicroCapital story). The Munich Re Foundation is the major promoter of the conference. The following is a quotation from the event’s promotional materials:
Heavyweight Indian Bank Housing Development Finance Corporation (HDFC) Begins Microfinance Operations
The Housing Development Finance Corporation Bank (HDFC) of India, a private banking corporation dedicated to meeting the growing need for affordable housing, launched its first branch devoted to providing funding to self help microfinance groups, thus making its official entrance into the microfinance industry and expanding its commercial lending portfolio.
Mohammed Yunus of Grameen Bank Uses Influence to Encourage the Indian Congress to Open a Nonprofit Microcredit Institution
Mohammed Yunus, head of Grameen Bank and 2006 Nobel Peace Prize recipient, attended a two-day international conference in New Delhi, India on Mahatma Gandhi’s Satyagraha (nonviolence movement) centenary with Sonia Gandhi, India’s chief of Congress. In a conversation between the two, Mr. Yunus expressed his desire to promote microfinance institutions for women in India and for the Indian Congress to head it. Ms. Gandhi has not officially agreed, but party insiders report a positive reaction.
Banks in India Struggling to Achieve Acceptable Default Rates on Microfinance Loans
Banks in India are experiencing extremely high default rates, upwards of 40%, on their micro-loans in rural areas of the country says a recent Business Standard report from Mumbai. This news comes at a time when smaller microfinance institutions (MFIs) and non-governmental organizations (NGOs) are lending money with repayment defaults as low as 10%. The article did not mention any specific banks; it simply made the general distinction between “banks” and “non-governmental agencies.” Neither the article nor the authorities that were quoted quantified or substantiated their claims, and further information is publicly unavailable to support or refute their assertions.
Article Reports on Current Trend for Microfinance Institutions in India to Pursue NBFC Licenses
To summarize a recent article about the atmosphere of the microfinance sector in India:
An increasing number of microfinance institutions (MFIs) are seeking non-banking financial company (NBFC) status from the Reserve Bank of India (RBI) to get wide access to funding, including bank finance. In the last couple of months, the central bank has granted fresh licenses to around 10 such organizations. MFIs such as Biswa in the East, Grameen Koota in Bangalore, Bandhan in West Bengal have already received NBFC licences from the RBI, while start-up institutions like Ujivan in Bangalore and Opportunity International in Chennai have also been granted approvals.