On October 20, 2009, Vikram Akula of SKS Microfinance in India, Elizabeth Littlefield of CGAP at The World Bank and Kurt Koenigsfest of BancoSol in Bolivia spoke during a panel discussion on how to instill consumer protection principles within the microfinance industry. Elisabeth Rhyne, managing director of the Center for Financial Inclusion at ACCION International, made introductory remarks and Robin Ratcliffe, Director of the SMART Campaign, moderated the discussion.[1]
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MICROCAPITAL.ORG STORY: Finance Minister of Bangladesh Says Climate Change is Major Factor Impeding Economic Growth for Low-Income Citizens
At a conference on extreme poverty in Bangladesh, the Finance Minister of Bangladesh, Mr. Abul Maal Abdul Muhith, announced that “global climate change poses the greatest challenge today in our poverty mitigation efforts.” He added that microcredit is not the prime tool for poverty alleviation, but that it can “very well be an aid to mitigating poverty” [1, 2].
MICROCAPITAL.ORG STORY: Observations In The Philippine Star and The Manila Times On Rural Microfinance Institutions In The Philippines – The Philippines Central Bank Bangko Sentral ng Pilipinas Moves To Allow Rural Banks to Sell Microinsurance And Consolidation May Benefit A Minority Of Rural Microfinance Institutions That Are Undercapitalized
It was recently reported on the online news portal of The Philippine Star [1] that the Philippine central bank, Bangko Sentral ng Pilipinas (BSP) [2], is taking steps to allow rural banks and other community-based banks to sell simple microinsurance products. BSP officer-in-charge Mr Nestor Espenilla Jr informed members of the Rural Bankers Association of the Philippines [3] that a formula allowing rural banks to sell simple insurance products to cover mortgage redemption, the protection of farm equipment and services vehicles as well as health insurance would soon be presented to the Monetary Board [4] in the Philippines for approval.
At the moment, foreign and commercial banks can sell insurance products of their affiliates as long as they hold a minimum 5 percent stake in the insurance affiliate. Unlike such banks, rural financial institutions often lack the resources to invest in insurance companies.
MICROCAPITAL.ORG STORY: Wharton Business School Online Portal Acknowledges The Need For Innovation In The Microinsurance Sector And Highlights The Existing Barriers To A Wider Acceptance Of Microinsurance Products Based On Observations By UK-Based Microinsurance Research Centre, Munich Re Foundation And The ILO’s Microinsurance Innovation Facility
A recent article on the ‘Knowledge@Wharton’ online portal entitled ‘Microinsurance: A safety net with too many holes’ [1] contains a detailed discussion of existing challenges facing the microinsurance market. The article notes that there has been some recent innovation in the microinsurance sector, a market that has experienced relatively slow growth compared to the microfinance sector in general. The authors note that innovation is to be welcomed and a Bangladeshi pilot microinsurance programme is cited as an example.
PRESS RELEASE: BlueOrchard to Manage $250m Microfinance Facility Previously Announced by US President Barack Obama
Source: BlueOrchard.
PRESS RELEASE: IDB, CAF, OPIC, BlueOrchard, ACCION, FONIDI, FMO Sign on to $250m Latin American Microfinance Fund
Source: Inter-American Development Bank.
NEWS WIRE: United States: Time Magazine Asks Why Poor People Decline Insurance
Source: Time.
MICROCAPITAL.ORG STORY: Lok Capital Invests US $1.5 M in Asirvad Microfinance Private Ltd of India
Venture fund Lok Capital LLC has closed a US $1.5 million investment deal with Indian Chennai-based Asirvad Microfinance Private Ltd, giving it a 24% stake in the company [1]. Launched in 2001 with support from the Rockefeller Foundation, Maritius-based Lok Capital Group comprises Lok Capital LLC, a venture fund which invests in commercially-oriented microfinance institutions in India; Lok Advisory Services (LAS), an Indian-based team which advices the Fund; and the Lok Foundation, a not-for-profit entity providing grant financing to MFIs that receive investments from Lok Capital LLC [2]. Lok Capital LLC investors include the IFC, CDC Group, KfW, FMO, Accion International, responsAbility and Développement international Desjardins. The fund has a total of US $22 million in committed capital and an average investment size ranges from US $0.5 million to US $2 million [3].
PRESS RELEASE: ACCION Announces Michael Schlein Will Be New President and CEO
Source: ACCION International.
MICROCAPITAL.ORG STORY: India-Based IFMR Trust ‘Debunks’ Myths About The Poor And Financial Services In The Wall Street Journal
In an article entitled ‘Debunking Myths About The Poor And Financial Services’ in the Wall Street Journal [1], Mr Suyash Rai, a Senior Manager with IFMR Trust [2], and Ms Sona Varma, Senior Advisor with IFMR Trust, attempt to address what they perceive to be ‘a number of popularly held misconceptions about role of finance in the lives of the poor’. IFMR Trust is a private trust with the mission of ensuring complete access to financial services for individuals and enterprises in India. It does not supply data to the MIX Market portal, an online database that houses financial and other information on MFIs around the world [11].
MICROCAPITAL.ORG STORY: CGAP Blogger Analyses Ongoing Problem Of Poor Repayment And Multiple Lending By Microfinance Institutions In Indian State Of Karnataka
In a CGAP blog entitled ‘Multiple borrowing or multiple lending – who is to blame for debt fatigue?’ [1] Mr N Srinivasan explores the microloan repayment problem that has affected some districts in the Indian state of Karnataka. The issue has been covered in a previous article on the Wall Street Journal, which became of the subject of a recent Microcapital.Org Story [2].
MICROCAPITAL STORY: The Economist Magazine Reviews Studies Of The Impact Of Microfinance By The Poverty Action Lab
A recent report in The Economist magazine reviews two papers which focus on the social impact of microfinance. The papers are “The Miracle of Microfinance? Evidence from a Randomised Evaluation” by Abhijit Banerjee, Esther Duflo, Rachel Glennerster and Cynthia Kinnan and published by CGAP (which has been covered in a previous Microcapital Paper Wrap-Up), and “Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila” by Dean Karlan and Jonathan Zinman and published by the Poverty Action Lab, a centre within the Economics Department of the Massachusetts Institute of Technology whose aim is to reduce poverty by ensuring that policy is based on scientific evidence.
MICROCAPITAL STORY: Client Protection In Microfinance – Observations by ACCION and Prizma Mikro From A Hanson Wade Conference On Microfinance Investments
At a recent conference on ‘Investments In Microfinance’ which was held in London and organized by Hanson Wade, a panel discussion was dedicated to the issue of client protection. The panel was led by Ms. Elisabeth Rhyne, Managing Director at the ACCION Centre for Financial Inclusion and Mr. Kenan Crnkic, General Director of Prizma Mikro, an MFI headquartered in Sarajevo. According to its profile on the MIX Market portal, a database which collects financial and other information about MFIs across the globe, Prizma is a non-bank financial institution and was established in 1997. Its total assets as at 31 December 2008 is USD 52,445,597 and it has a Debt To Equity ratio of 297.89 percent. Its Return On Equity is 8.17 percent and its Return On Assets is 2.28 percent. Prizma has 55,820 active borrowers as at 31 December 2008.
MICROCAPITAL STORY: MFX Solutions Inc. (MFX) in Washington D.C., USA Launches Hedging Operations Dedicated to Microfinance Institutions (MFIs)
MFX Solutions Inc. (MFX), a new company based in Washington D.C. in the United States dedicated to providing microfinance currency risk solutions announced the launch of its hedging operations recently, according to a press release on the electronic news and information portal PR NewsWire. With the launch, MFX, in keeping with its mission to ‘make sure that existing flows of microfinance lending are not disrupted by currency devaluation’, will focus on making modern hedging instruments accessible to microfinance lenders in developing countries. As per information available on their website, MFX will focus on ‘high-risk markets in Africa and elsewhere where hedging can have a transformative effect’. Additionally, MFX will also create education programs in the form of easy-to-use web-based tools designed to help MFI managers analyze the risks they face under different economic scenarios. (PR Newswire is headquartered in New York, USA and is a subsidiary of the London based global business media company United Business MediaPlc).
MICROCAPITAL STORY: Former U.S. President Bill Clinton Announces Program for Fifth Annual Meeting of the Clinton Global Initiative (CGI) Including Focus on Investment in Microfinance and Microinsurance
The Fifth Annual Meeting of the Clinton Global Initiative (CGI) will be held September 22-25, 2009 in New York City. GGI is introducing four new Action Areas this year, including the Financing a Sustainable Future program. Under this Action Area, participants will discuss and make “Commitments to Action” on impact investing in micro, small and medium enterprises, housing in developing countries, climate adaptations, and microinsurance.
MICROCAPITAL STORY: ACCION Microfinance Bank Limited of Nigeria Has Reached Total Assets of USD 9.1 Million
The ACCION Microfinance Bank Limited (AmfB) of Nigeria which was incorporated in May 2006 and granted an operating license by the Central Bank of Nigeria in April 2007 [1], announced that it has reached a benchmark in serving over 10,000 customers with USD 10.1 million worth of loans disbursed [2]. A further look at its financials reveals other key numbers.
MICROCAPITAL STORY: New book entitled “Microfinance for Bankers and Investors, Understanding the Opportunities and Challenges of the Market at the Bottom of the Pyramid” by Elisabeth Rhyne released by McGraw-Hill
Publishing company McGraw-Hill Professional has released “Microfinance for Bankers and Investors” by Elisabeth Ryne, managing director of the Center for Financial Inclusion at ACCION International. The book explores the challenges of profitably delivering credit, savings, insurance, and remittance services tailored to serve the so-called bottom of the pyramid (BOP), the four billion people in the world who live on less than USD 3,000 per year. The book offers sixteen in-depth case studies, on ventures by companies such as Citibank, Visa, and Sequoia Capital, exploring successful solutions in product design, last-mile delivery to remote villages and urban slums, and technological innovations that reduce costs and provide new means of payment and remittance to populations previously tied to a cash economy.
MICROCAPITAL STORY: Microfinance Investors Back The Leapfrog Financial Inclusion Fund To Raise USD 44 Million For Microinsurance
The LeapFrog Financial Inclusion Fund recently announced that it has raised USD 44 million. This was reported on several news portals including Bloomberg, the Corporate Social Responsibility Newswire, the Press Portal website and CNBC. The fund has been billed as the world’s first investment fund that is focused on microinsurance. The fund aims to invest in or partner with businesses that offer insurance products and financial services to low-income communities throughout Africa and Asia, including India, Pakistan, South Africa and Uganda.