by Sally Levy -

MICROCAPITAL.ORG STORY: Centenary Bank of Uganda to Increase Microfinance Lending within Agriculture Sector

For discussion of this topic click here: http://microfinanceassociation.ning.com/forum/topics/rural-microfinance

Centenary Bank of Uganda, a commercial bank with a focus on rural microfinance, has announced that it will increase its loans to farmers, further increasing its agricultural lending [1, 2]. The loans will enable farmers to buy tractors and other machinery up to a maximum of UGX 200 million (USD 95,000) [1]. Farmers owning 100 acres of land will be targeted. Recently the government declared in its 2009-10 budget that a UGX 30 billion (USD 14.2 million) loan guarantee will be made available to banks that extend loans to the agricultural sector this financial year [1]. The government believes this investment will help Uganda recover from the global recession as the agricultural sector employs 85 percent of the labor force. Centenary Bank will also seek to access part of the UGX 88 billion (EUR 30 million) credit facility that the European Investment Bank (EIB) is extending to several Ugandan commercial banks [1].  

by Bharathi Ram -

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).

by Chinq Yee Chong -

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.

by the MicroCapital Team -

CGAP Microfinance Dealbook: May 2009 Transactions

The CGAP Microfinance Dealbook publicizes microfinance capital market transactions in an effort to bring greater transparency to the industry. This information is made freely available as a public service. Parties to microfinance transactions are encouraged to submit their deals to this effort. The following deals were collected for May 2009:

by Goda Thangada -

MICROCAPITAL STORY: Bellwether Microfinance Fund Invests $480K in Equitas Micro Finance India

In May 2009, Bellwether Microfinance Fund, a private equity fund based in Hyderabad, India, reported a USD 479,600 equity investment in Equitas Micro Finance India, a Chennai based microfinance institution (MFI), to the CGAP Microfinance Dealbook, the monthly report on microfinance market transactions. The deal was denominated in local currency. MicroCapital has reported on a May 2009 USD 3.7 million investment by MicroVentures in Equitas as well as a securitization worth USD 3.0 million in March 2009.

by Jaclyn Berfond -

MICROCAPITAL STORY: Triodos Bank Invests USD 900,000 in Microfinance Institutions in May

Triodos Bank has reported to the CGAP Microfinance Dealbook investments totaling approximately USD 900,000 this month.  The bank has invested 834,000 in IMON International in Tajikistan through the Triodos-Doen Foundation, and has loaned 61,000 to BICC in Honduras through the Hivos-Triodos Fund.

by Jaclyn Berfond -

MICROCAPITAL STORY: Pioneer in Microfinance Investing, Triodos Bank, Wins 2009 Sustainable Banking Award by Financial Times (FT) and International Finance Corporation (IFC); MicroEnsure and Root Capital Also Take Prizes

The Financial Times (FT) and the International Finance Corporation (IFC) announced the winners of the 2009 Sustainable Banking Awards. Triodos Bank of the Netherlands was named Sustainable Bank of the Year. Other microfinance programs were recognized, with MicroEnsure winning the award for Achievement in Basic Needs Financing, and Root Capital taking the Achievement in Banking at the Bottom of the Pyramid award.

by the MicroCapital Team -

CGAP Microfinance Dealbook: April 2009 Transactions

The CGAP Microfinance Dealbook publicizes microfinance capital market transactions in an effort to bring greater transparency to the industry. This information is made freely available as a public service. Parties to microfinance transactions are encouraged to submit their deals to this effort. The following deals were collected for April 2009:

by Jaclyn Berfond -

MICROCAPITAL STORY: European Development Finance Institutions Part 3: The Netherlands Development Finance Company (FMO) Invests Over USD 160 million in Microfinance in Last Two Years

The Netherlands Development Finance Company (FMO), founded by the Dutch government in 1970 to support the private sector in developing countries, invests in microfinance as a way to stimulate sustainable economic growth. Between January 2007 and March 2009, FMO has invested at least USD 160 million in microfinance services around the world.

by Sally Levy -

MICROCAPITAL STORY: K-Rep Bank of Kenya Receives $2.2m Microfinance Investment from the African Development Bank (AfDB)

K-Rep Bank, a commercial bank that directly targets low income clients in Kenya, received a Kshs 174.8 million (USD 2.2 million) investment from the African Development Bank (AfDB) during May 2009. This financial support will also include technical assistance related to capacity building. K-Rep Bank provides various banking services and specializes in loans to low income, small and micro entrepreneurs. K-rep plans to create 10,000 new jobs by 2011 of which 55 percent would involve women entrepreneurs.

by Sally Levy -

MICROCAPITAL STORY: International Finance Corporation (IFC) Worldwide Microfinance Investment Deals March and April 2009 of $51m and EURO 7m

The International Finance Corporation (IFC), a member of the World Bank Group, provides investments and advisory services to build the private sector in developing countries.  It made the following microfinance investment deals in March and April 2009 of USD 51m and EURO 7m.

by Bharathi Ram -

MICROCAPITAL STORY: BRAC of Bangladesh Launches $62m East Africa Microfinance Fund

Bangladesh Rural Advancement Committee (BRAC), an International Development Organization founded in Bangladesh announced the launch of the BRAC Africa Loan Fund to provide microfinance loans to poor borrowers in Tanzania, Uganda and Southern Sudan. In a press release found on PRNewswire, BRAC announced that it has raised USD 62.6 million of capital towards the loan fund. The release stated that the Africa Loan Fund would provide long-term, local currency funding that would enable BRAC to scale up its microfinance operations to reach over 700,000 borrowers through over 200 branches across the three East African countries.

by Lori Curtis -

MICROCAPITAL STORY: Kenya’s K-Rep Bank Records Loss in Profits, Receives New Capital from IFC, African Development Bank, Shorecap International, Triodos, FMO, K-Rep Group

K-Rep Bank CEO Kimanthi Mutua attributed a recorded loss in profit totalling Sh 209 million (USD 2.6 million) to post-election violence and massive investment in the bank’s information and communication technology (ICT) infrastructure. The Daily Nation reported that Kenya’s K-Rep Bank reported a loss in profit according to an unaudited financial report ending September 30, 2008. The majority of K-Rep clients are low-income entrepreneurs located in neighbourhoods that were badly affected by the post-election violence. Shareholders have injected an additional Sh 1 billion (USD 12.7 million), which will be used to diversify and create new products to increase the bank’s market share and further develop ICT infrastructure, such as Temenos 24. In September 2007 K-Rep Bank reported profits of Sh146 million (USD 1.86 million).

by Jeffrey Erfe -

MICROCAPITAL STORY: Thirty-Five Organizations Sign Client Protection Principles to Ensure Fair Treatment and Financial Protection of Low-Income Microfinance Clients

In late October, 35 microfinance institutions (MFIs) and investment funds signed the Client Protection Principles (CPP), a list of pro-consumer principles and mandates that aims to become an industry-wide standard for ensuring the fair treatment and financial protection of low-income microfinance clients.  The CPP are part of a larger campaign launched in September of 2008 at the annual meeting of the Clinton Global Initiative, a conglomeration of governments and public and private organizations dedicated to sustainable development, with the goal of incorporating at least half of the world’s 500 largest MFIs within the next three years. According to Consultative Group to Assist the Poor (CGAP), there is little evidence of client abuse in the microfinance sector.  

by Lori Curtis -

MICROCAPITAL STORY: Australia’s Christian Super to Invest in Triodos Bank and JPMorgan Microfinance

Christian Super, an Australian Christian-based superannuation (pension) fund, has announced that it will invest an undisclosed amount in two separate microfinance funds run by JP Morgan and Triodos Investment Management. The fund, worth AUS 450 million (US 304 million) is reportedly interested in investing in JP Morgan’s Microinvest II Fund and Triodos Investment Management’s Triodos-Doen, Hivos-Triodos Fund, and Triodos Fair Share Fund. Christian Super CEO Peter Murphy spoke to Australia’s Financial Standard saying that these investments present an excellent opportunity for the super fund as it will provide a good risk diversification tool. He also said that Christian Super has been interested in investing in microfinance for 12 months but that the microfinance market was lacking the sophistication level required for super funds.

by Scott Everett -

MICROCAPITAL STORY: Microfinance Institution ACCION International Launches New Hub in Africa

ACCION International, a microfinance organization founded in 1961, launched a new hub office and training center in Accra, Ghana, with the aim to expand financial services for Africa’s poorest populations. The new center will offer support to East and West African microfinance institutions (MFIs) in the form of education and training to increase capacity. According to the press release, ACCION’s goals are to train 3,000 microfinance practitioners in such disciplines as business planning, risk management, lending and governance; all through its training center network.