James Mwangi, CEO of Kenya-based Equity Bank, recently announced that the bank will use the proceeds from the sale of 25 percent ownership (valued at KES 11 billion or USD 175.7 million) of the bank to investment group Helios EB to expand its operations to other countries in East Africa. The bank plans to open subsidiaries in Uganda, Tanzania and Rwanda by August 2008. The bank believes this expansion will allow it to compete against the dominant players in the region: multinationals such as Barclays and Standard Chartered, as well as local Kenya Commercial Bank. Mr. Mwangi stated that he is confident that the expansion will allow the bank to double its customer base over the next five years.
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MICROCAPITAL SPECIAL FEATURE: 2007 Equity Investments in Small and Medium Sized Microbanks, Part 3 of 3
December 10, MicroCapital.org featured Part 2 of a series on 2007 Equity Investments in Small and Medium Sized Microbanks. Previously, detailed information was provided on institutions with less than USD 100 million in assets. Here, in Part 3, we provide detailed financial and outreach information on microbanks with total assets greater than USD 100 million and less than USD 200 million. The institutions are presented in ascending order based on asset size.
MICROCAPITAL STORY: Micro Finance Bank of Azerbaijan Receives First Private Investor Loan in Manat Currency (AZN)
The Micro Finance Bank of Azerbaijan (MFBA), a central Asian and eastern European microfinance institution (MFI) in Azerbaijan, received a loan of AZN 4.2 million (USD 4.95 million) from the SNS Institutional Microfinance Fund, a Dutch investment fund. It is the first loan from an international private-sector financial institution denominated in Azerbaijan’s local currency, the Manat. The loan will be used to lend to small businesses in Azerbaijan.
MICROCAPITAL SPECIAL FEATURE: 2007 Equity Investments in Small and Medium Sized Microbanks, Part 2 of 3
On December 5, MicroCapital.org featured Part 1 of a series on 2007 Equity Investments in Small and Medium Sized Microbanks. Here, in Part 2, we provide detailed financial and outreach information on microbank’s with total assets under USD 100 million. The institutions are presented in ascending order based on asset size.
MICROCAPITAL STORY: Rural Impulse Fund Lends $300k to Latin America Microfinance Institution Fundación ESPOIR
The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse, reported the Rural Impulse Fund, an investment fund managed by Icofin, based in Antwerp, Belgium, issued a loan of USD 300,000 to Fundación ESPOIR, a Latin America microfinance institution (MFI).
PAPER WRAP-UP: Microfinance Market Survey in the West Bank and Gaza Strip
Published by International Finance Corporation (IFC) in cooperation with the Palestinian Network of Small and Micro Finance (PNMSF). Conducted by PlaNet Finance. Copyright 2007, 79 pages, available for download at http://www.microfinancegateway.org/content/article/detail/44378
The goal of this report is to gauge the demand for microfinance among Palestinian micro entrepreneurs. The report finds that, overall, Palestinian entrepreneurs lack access to financial services, and, if given the opportunity, many would utilize microcredit in order to expand existing businesses, generate working capital, launch new businesses and finance assets. The report estimates the likely market potential at approximately USD 157 million, but notes that it could be as high as USD 280 million.
MICROCAPITAL STORY: Want the Latest Word on Microinsurance? Need Health and Weather Insurance? Microfinance Gateway (MFG) Hosts New Papers
A large number of papers are posted on The Microfinance Gateway Library each month. Here we suggest a few of the best:
MICROCAPITAL STORY: Rural Impulse Fund Lends $500k to Nicaraguan Microfinance Institution PRESTANIC
The Microfinance Capital Markets Newsletter of the Consultative Group to Assist the Poor (CGAP) and the MIX, the microfinance information clearinghouse, reported the Rural Impulse Fund, an investment fund managed by Incofin, based in Antwerp, Belgium, issued a loan of USD 500,000 to PRESTANIC, a rural Latin America microfinance institution (MFI).
MICROCAPITAL STORY: MicroCapital talks to Shari Berenbach, Executive Director of the Calvert Foundation, About the Foundation’s Relationship with MicroPlace and how it Became the First Issuer to Sell Investments on the Site
The Calvert Foundation has always been at the cutting edge of social community investing, so it was no surprise to find out that it was the first issuer to market securities on the new retail microfinance web-brokerage service owned by eBay, MicroPlace. Through MicroPlace it is marketing 15 microfinance institutions to which everyday investors can make loans by investing in Calvert Community Investment Notes.
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.”
PAPER WRAP-UP: Microfinance Investment Vehicles (CGAP Brief), by Xavier Reille and Ousa Sananikone
By Xavier Reille and Ousa Sananikone, published by Consultative Group to Assist the Poor (CGAP), April 2007, 2 pages, available on the Microfinance Gateway at http://www.microfinancegateway.org/content/article/detail/40677
The paper, a Consultative Group to Assist the Poor (CGAP) brief, by Xavier Reille and Ousa Sananikone, highlights the growth of foreign capital investment in microfinance, specifically the proliferation and impact of private investment funds. The authors begin by describing two primary players in microfinance investment, international financial institutions (IFIs), which provide seed capital to start-up microfinance institutions (MFIs), and private investment funds know as microfinance investment vehicles (MIVs). IFIs are investment arms of public development agencies. For example, the International Finance Corporation (IFC), a member of the World Bank Group, is considered an IFI. The Netherlands Development Finance company (FMO) is also an IFI. MIVs, on the other hand, draw funds from the private sector. BlueOrchard, an MIV, manages funds that deliver capital from private investors directly to MFIs through loans and other structures. MIVs are, in essence, financial intermediaries that act as distribution channels of private monies.
MICROCAPITAL STORY: PBS Program “NOW” Asks “Who’s Making Money from Microcredit?”
The Public Broadcasting Service (PBS) program, “NOW,” covered a story in September 2007 on microfinance entitled “Who’s Making Money from Microcredit?” The twenty minute segment explores the financial success of Mexican microfinance institution (MFI) Compartamos and its April 2007 initial public offering (IPO) that generated over USD 400 million for investors. Supporters of the Compartamos IPO hail the transaction as an achievement that signifies the emergence of the microfinance industry in mainstream financial markets. However, critics accuse the microfinance lender of exploiting the poor in an effort to reap profits.
MICROCAPITAL STORY: Micro Finance Bank of Azerbaijan (MFBA) Plans to Expand Reach from Microfinance to Mortgage Credit Market
The Micro Finance Bank of Azerbaijan (MFBA), a commercial bank that was established in 2002 to provide financial services to privately-owned micro and small enterprises (MSEs) in Azerbaijan, plans to appear in the domestic mortgage lending market. The bank does not currently participate in the state mortgage lending program, but is taking steps to launch its own mortgage program. AMFB board member Anar Hasanov said that the bank has met all the preconditions for financing mortgage operations as an independent commercial entity. The issue is currently under consideration by MFBA shareholders. No program conditions have yet been outlined.
MICROCAPITAL STORY: PNG Microfinance Ltd (PML) Launches Microfinance Radio Programme in Papua New Guinea
PNG Microfinance Ltd (PML), one of the main microfinance institutions (MFI) in Papua New Guinea (PNG), has begun to air a weekly radio programme to inform the public on its activities, in particular the types of financial services it provides and how they can be accessed. It will feature a format of interviews with management and staff and will be aired every Wednesday, from 7pm-8pm, on FM100 from the capital, Port Moresby.
MICROCAPITAL STORY: Morocco and Millennium Challenge Corporation (MCC) sign $697.5m Compact, JAIDA and Other Microfinance Programs to Receive $46.2m
Morocco and the Millennium Challenge Corporation (MCC), a US government corporation designed to reduce poverty in the world’s poorest countries, have signed a five-year USD 697.5 million Millennium Challenge Compact to encourage sustainable economic growth in the Kingdom of Morocco. The compact, which officially began August 9th, is the largest of its kind to date. MCC will supply USD 118 million per year for five years to various initiatives spanning multiple sectors in the country. As part of the compact, USD 46.2 million will be given to the Financial Services Project, a program intended to increase the supply and decrease the costs of financial services, particularly for microfinance institutions.
MICROCAPITAL STORY: Ethical Corporation Hosts Sustainable Finance Summit 2007 in London, Promotes Microfinance as Promising and Profitable Market
The Sustainable Finance Summit 2007 took place in London yesterday and today (September 18-19). The event was hosted by Ethical Corporation, an independent publisher, conference organizer, and outspoken advocate of responsible business practices worldwide. One of the topics covered at the summit was “Tapping into the £300 billion microfinance market.” Day one of the conference, Head of Global Microfinance at Citigroup, Robert Annibale presented a case study on Citigroup Global Microfinance’s joint venture with Compartamos, a partnership that won the FT Sustainable Deal of the Year award 2006.
MICROCAPITAL STORY: International Finance Corporation makes USD 70 Million Investment in Central American Microfinance Operator, Grupo Mundial
The International Finance Corporation (IFC), a member of the World Bank dedicated to private sector development, has invested USD70 million in the financial conglomerate Grupo Mundial. The investment comprises a USD 30million equity investment for about a 7 percent stake in the group and a USD 40million long term loan facility.
MICROCAPITAL STORY: Micro Finance Bank of Azerbaijan (MFBA) Issues Bonds Worth USD 11.4m Through Developing World Market’s (DWM) Management to Finance Microfinance Operations
Micro Finance Bank of Azerbaijan (MFBA), a central Asian and eastern European microfinance institution (MFI), has issued USD 11.4 million in bonds to international capital investors. Developing World Markets (DWM), a US-based asset management firm, sponsored and arranged the investment deal, which took place in Luxembourg, through a specially created investment vehicle titled MFBA Bond I. The debt accrued by MFBA through the bond issuance has been categorized as senior debt, with a five-year term for repayment. MFBA will use the loaned capital to finance micro loans for Azeri small businesses.