by the MicroCapital Team -

MICROCAPITAL BRIEF: CGAP (Consultative Group to Assist the Poor) Publishes “Microfinance Now” Podcasts: Interviews with Vijay Mahajan of BASIX, Bob Annibale of Citi, Anne Hastings of Fonkoze and Others

CGAP (Consultative Group to Assist the Poor) has published a series of audio interviews in “podcast” form on its media center website. Interviewees include:

by the MicroCapital Team -

MICROCAPITAL BRIEF: US President Obama Nominates CGAP CEO Elizabeth Littlefield for Overseas Private Investment Corporation (OPIC) Presidency

President Barack Obama has announced that he will nominate Elizabeth Littlefield to become President of the Overseas Private Investment Corporation (OPIC). Ms Littlefield is currently a Director of the World Bank and the CEO of CGAP (Consultative Group to Assist the Poor), a multi-donor organization created to help build a the microfinance industry. Ms. Littlefield previously worked with JP Morgan, where she was the Managing Director of the Emerging Markets Capital Markets Division. She has served on the executive board of Women’s World Banking, Profund, Africa International Financial Holding, the Mastercard Foundation, the Calvert Foundation, and E&Co. Littlefield is a graduate of Brown University and also attended Ecole Nationale de Sciences Politiques in Paris.

by Hio Kyeng Lee -

WHO’S WHO IN MICROFINANCE: Supervisory Tools for Regulators and MFIs at the CGAP Reference Library

Regulators and microfinance institutions (MFIs) have resources available to them in order to implement the supervision of microfinance activities within their purview. The Consultative Group to Assist the Poor (CGAP), located at the Worldbank Group, has a reference library which lists supervisory tools geared towards the regulation of microfinance activity. This article will focus on a few examples of the supervisory resources available to regulators and MFIs through the reference library at CGAP. In addition to the examples discussed below, the reference library brings together a wealth of information regarding current practices in microfinance regulation and supervision, how-to guidelines and a discussion of the broader issues affecting microfinance regulation.[3] For additional microfinance resources at CGAP, Microcapital.org has previously reported on other resources available on the CGAP website in an article titled, “WHO’S WHO IN MICROFINANCE: The Microfinance Gateway (www.microfinancegateway.org), Provided by World Bank’s Consultative Group to Assist the Poor (CGAP).”[1]

by Diya Chopra -

MICROCAPITAL.ORG STORY: International Association of Insurance Supervisors (IAIS), Consultative Group to Assist the Poor (CGAP), World Bank, International Labour Organization (ILO), FinMark Trust, and German Federal Ministry of Economic Cooperation and Development Launch Access to Insurance Initiative

A recent statement released by the International Association of Insurance Supervisors (IAIS) announced the launch of the Access to Insurance Initiative (A2II). The initiative will be launched by IAIS, in association with the Consultative Group to Assist the Poor (CGAP), World Bank, the International Labour Organization (ILO), FinMark Trust, and the German Federal Ministry of Economic Cooperation and Development (BMZ) [1].

by Stefanie Rubin -

WHO’S WHO IN MICROFINANCE: The Microfinance Gateway (www.microfinancegateway.org), Provided by World Bank’s Consultative Group to Assist the Poor (CGAP)

Launched in 2000, the Microfinance Gateway is self-proclaimed as “the most comprehensive online resource for the global microfinance community,” getting over four million page hits from 200 countries in 2008. The website is provided by the microfinance arm of the World Bank, the Consultative Group to Assist the Poor (CGAP), in an effort to advance knowledge and encourage innovation within the microfinance industry [1]. In May of this year, the site was re-launched, with interactive features such as ratings, reviews and comment boards. Also among the additions are “Hot Topic” pages with relevant links and overviews for microfinance-related investment, rural and agricultural finance, social performance, microinsurance, savings, technology and more. In an effort to further improve the site, CGAP has released the Microfinance Gateway User Survey 2009, which asks users to rate and comment on new features including accessibility, breadth and depth of information, job postings and the “attractiveness” of the new user interface [2].

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: CGAP Microfinance Blog Comments On Case Studies On The Liquidation Of Microfinance Institutions And Highlights Challenges Associated With Retaining Borrower Repayment Incentives In The Midst Of A Deteriorating Loan Portfolio

In a blog on the CGAP Microfinance Blog portal entitled ‘When MFIs fail, is their loan portfolio worth anything?’ [1], Senior Advisor to Research and Market Intelligence Team at CGAP, Mr Richard Rosenberg refers to Mr Daniel Rozas’s publication entitled ‘Throwing in the Towel: Lessons from MFI Liquidations’ [2]and makes some observations about the steps an MFI should take to maximise collections on a deteriorating loan portfolio. Mr Rosenberg notes that Mr Rozas’ article offers a ‘useful, timely, concise, and readable study of a half-dozen MFI failures, focusing on efforts by creditors and others to collect the loan portfolio of the defunct institutions’ but cautions that some of Mr Rozas’ recommendations may be difficult to implement in practice.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: The International Banking Systems Online Journal Comments On How Key Stakeholders Influence Purchasing Decisions Of Microfinance Institutions In Relation To Information Systems And Includes Observations By Grameen Foundation, CGAP And The Bill And Melinda Gates Foundation

The International Banking Systems publication (IBS), an online journal that provides information on banking systems and operations, have produced a detailed supplement on the role of technological systems in microfinance [1]. An article within the supplement entitled ‘Analysis: Microfinance Stakeholders – Guiding hands’ [2] explores how major stakeholders shape the market for microfinance information systems (MIS). The thrust of the article is that there is an important difference between the microfinance and commercial banking sectors when it comes to information systems and that MFIs depend heavily on key stakeholders such as the Bill and Melinda Gates Foundation [3], CGAP [4], the IFC [5] and GTZ [6] for guidance and direction in making technology decisions. The conclusion arrived at is that ‘directly or indirectly, it is these stakeholders that influence purchasing decisions by MFIs, on the business case for investment, the process of selection, and which products to choose’ in respect of MIS.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: CGAP Microfinance Blog Supports Efforts Of MFTransparency To Promote Transparent Pricing And Enhance Consumer Protection In The Microfinance Industry

In a recent posting entitled ‘More transparency, please!’ on the CGAP Microfinance Blog [1] by Mr Christoph Kneiding, a Market Intelligence Officer for CGAP, attention is drawn to the important issue of transparent pricing for microlending products. Whilst jurisdictions such as the United States have legislation such as the Truth in Lending Act of 1968 which obliges lenders to disclose the annual percentage rate (APR) to prospective borrowers for all products, many countries – particularly those with a significant MFI community – do not have a regulatory framework under which transparent loan pricing can be effectively supervised and enforced.

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: CGAP Blog Explains High Collection Rates And Clarifies Key Microfinance Concepts Including Loan-Loss Rates and Outstanding Loan Portfolio

In a recent blog entry entitled ‘Is 95% a good collection rate?’ [1] CGAP Senior Advisor Mr Richard Rosenberg discusses the misconceptions about collection rates in the microfinance world. His blog has attracted significant comment and queries, some of which are referred to below. According to Mr Rosenberg, MFIs that report collection rates of over 90 percent or 95 percent in some cases are typically viewed positively by the press and by other market participants. He cautions that the situation may not be as promising or straightforward as it sounds and that ‘for most MFIs a collection rate of 95 percent would be unsustainable’. One should not equate a 95 percent collection rate with ‘losing just 5 percent of [our] portfolio a year to loan default’ as the reality is often more complicated. In an extreme scenario, he adds that ‘if an MFI makes 3-month loans repayable weekly, and collects 95 cents of every dollar it lends, it will lose almost 40 percent of its loan portfolio in a year’. This is a scenario he explains in some detail in his blog and is summarised below.

by Zoran Stanisljevic -

MICROCAPITAL PAPER WRAP-UP: Microfinance Investment Vehicle (MIV) Performance and Prospects: Highlights from the CGAP 2009 MIV Benchmark Survey by CGAP

By CGAP, published by CGAP, September 2009, 6 pages, available at:
http://www2.cgap.org/gm/document-1.9.38570/CGAPBrief_MIV.pdf

Consultative Group to Assist the Poor (CGAP) has recently published a Benchmark Survey which illustrated that while MIVs grew by 31 percent in 2008, overall MIV performance may deteriorate in 2009 as increased credit risks persist. The survey also revealed MIVs efforts to include environment, social and governance considerations in their investment policies, due diligence, and monitoring.

The survey represents 103 MIVs (90 percent of total MIV assets within the MIV investment universe) with an estimated USD 6.6 billion in assets under management. Growth in MIV assets were supported by both public and private investors as retail investors continued to invest in MIVs as well.