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Howard J. Finkelstein: News
Howard
Microfinance News
July 17, 2009

PGGM invests $60m in microfinance fund
7.17.09 (Netherlands)
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- PGGM has invested €43m (US$60.6m) in a microfinance private equity fund.

- The fund, Grassroots Capital’s Global Microfinance Equity Fund, will invest in early-stage or start-up microfinance institutions, said Grassroots managing partner David FitzHerbert.

- Grassroots is looking to raise up to $150m in the fund and has already received interest from other Dutch and Danish investors

Pakistan unveils guarantees for microfinance
7.17.09
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- State Bank of Pakistan has extended risk guarantee facility for microfinance banks and institutions with a fund of GBP 10 million received from the UK Department of International Development (DFID) which will be kept as reserve for the purpose, said a circular issued by the bank on Friday.

- The bank has also restrained microfinance interest rate by MFIs not to exceed 16% or two percent above the official discount rate of 14% and amended its guidelines for the Microfinance Credit Guarantee Facility (MCGF) that was introduced in May this year.

- The new facility will provide Partial Guarantee or First Loss Default Guarantee up to a certain limit prescribed by the SBP to reduce credit risk to banks/DFIs entering into lending arrangements with financially and socially sustainable MFBs/MFIs with significant potential to maximize outreach to poor and marginalized segments of the society.

- For a full version of the circular, visit SBP url: www.sbp.org.pk/Guidelines/index2.asp

Latest Microfinance Institutional Trend Data Now Available In MicroBanking Bulletin
7.15.09
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- The Microfinance Information Exchange, Inc. (MIX) announced the release of the latest issue of The MicroBanking Bulletin. Issue 18 of the MBB focuses on the impact of the global economic crisis on microfinance institutions and their clients, with benchmark trend lines from MFIs (microfinance institutions) from 2005 – 2007, a robust data set that covers performance and financial data on 487 MFIs in 78 countries.

- The analysis of the data included in the MBB finds that after recent years of growth, MFI profits have flattened relative to their asset bases

- Efficiency gains have become slimmer as institutions matured

- Borrower outreach grew at a persistent rate across all regions, with loan portfolios growing even faster – 47 percent in USD terms in 2007, due in part to a depreciating USD.

July 13, 2009

Microfinance deemed relevant in assisting poor to enter market economy
7.13.09
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- Some business consultants say microfinance is becoming more relevant in assisting the poorest people in the Pacific to gain a foothold in the market economy

- This comes as the International Finance Corporation is to present the benefits of the approach at the Pacific Microfinance Week 2009 Conference in Nadi, Fiji.

- Greg Pirie, a New Zealand business consultant working in community development, says there is a global need for policy makers and those responsible for microfinance initiatives to be trained to adjust the systems and create an environment to meet everyone’s needs.

Lagos Traders Lose Millions of Naira to Fake Microfinance Bank
7.12.09
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- The bank was said to have lured the victims, the majority of which were market women, into saving millions of Naira sequel to securing some phantom mouth-watering loans.

- The loan seekers were, however, disappointed when, after months of pooling funds together, they discovered to their chagrin, that the said microfinance bank had pulled the wool over their eyes; the financial institution smartly closed shops, with its staff gone into hiding after four months of dubious banking operations.

- A check at the Other Financial Institutions Department (OFID) of the Central Bank of Nigeria (CBN) in Lagos, however, revealed that the bank neither applied for a microfinance bank license nor was listed as one of such.

- On why the regulatory body was not able to nip the problem in the bud, he said that it was the expectation of the department that customers would do due diligence before entering into a contract with any microfinance bank.

WSJ GROUP: Microfinance Best Practices
7.10.09
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- This group was created with the aim of facilitating exchanges of practical experiences in implementing best practices related to a professional management of Micro Finance Institutions.

Sri Lanka turns to microfinance to rebuild war zone
7.13.09
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- Sri Lanka’s government on Monday launched a $26 million microfinance loan program to spur local agriculture and business in the former northern war zone, part of the president’s plan to resettle 300,000 displaced people.

- Dubbed the “Awakening North”, the Central Bank said the 3 billion rupee ($26.12 million) loan plan will support “the resumption of economic activities in agriculture, livestock, fisheries, micro and small enterprises.”

- Under the loan plan, people can apply for loans of up 90 percent of 200,000 rupees for a maximum of five years’ repayment, at an interest rate of 12 percent.

July 2, 2009

REEEP Softens Financial Crisis for Renewables and Energy Efficiency in the Developing World
7.2.09
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- The Renewable Energy and Energy Efficiency Partnership (REEEP) has provided € 667,500 in seed funding for eight new finance projects to accelerate the clean energy market in the developing world.

- Piloting innovative finance methods is one of the Vienna-based NGO’s key priorities in its small-scale project funding, designed to have a wide ripple effect.

- Institutional investors such as pension funds, insurance companies, and savings and investment banks see high risks associated with the emerging markets and with renewable energy. A REEEP project will seek to develop risk mitigation strategies and financing products through intermediaries such as E+Co, to attract these major players to the renewables market.

- In a similar vein, REEEP has also provided funding for the establishment of a Public-Private Mezzanine Finance facility for renewable energy projects in Morocco, Tunisia and Egypt.

RBAP to take part in study of microfinance experience
7.1.09
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- Recognizing this need to shape and institutionalize future consumer-protection practices and policies, the Rural Bankers Association of the Philippines (RBAP) and other microfinance industry stakeholders have recently signed a memorandum of agreement to collaborate in a research which will document the Philippine experience with microfinance and develop a consensus around proconsumer best practices.

- Need for the adoption of best practices in lending activities, especially to the lower-income microfinance sector

- The “Beyond Codes” global action research project of Accion International’s Center for Financial Inclusion (Accion CFI) brings together RBAP, the Microfinance Council of the Philippines Inc. and the Microenterprise Access to Banking Services in sharing good practices that support the principles of client protection for providers of microfinance services, among other possible collaborative efforts in that direction.

Microfinance banks critical to poverty eradication by 2020
7.1.09 (Nigeria)
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- Microfinance banks have been identified as a critical factor to achieving the nation’s goal of poverty eradication by year 2020.

- This was disclosed by the Managing Director of Bank of Industry (BoI) Microfinance Bank, Mr. Kevin Iyamu, who affirmed that the sector is capable of covering majority of the active poor by year 2020, thereby, creating numerous job opportunities and reducing poverty.

- Specifically, microfinance banks would provide diversified, affordable and dependable financial services to the ‘active poor’ in a competitive manner that would enable them undertake and develop long-term sustainable entrepreneurial activities.

SKS Microfinance: Bajaj Allianz Life to Invest INR500M in Co
7.2.09
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- India’s SKS Microfinance Ltd. Thursday said it will sell a stake to Bajaj Allianz Life Insurance Co. for INR500 million.

- SKS Microfinance – an unlisted non-banking financial company – said the investment will help improve its capital adequacy ratio.

- Bajaj Allianz Life is a joint venture between Germany’s Allianz SE (ALV.XE) and Bajaj Finserv Ltd. (532978.BY)

June 29, 2009

$8.4m grants to six MFBs stir the sub-sector
6.29.09 (Nigeria)
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- According to Microcapital report, the World Bank and Federal Government approved grants totalling $8.4 million to six Nigerian microfinance institutions (MFIs); ACCION Microfinance Bank (AMFB), Susu Microfinance Bank, LFS, MIC Microfinance Bank, Integrated Microfinance Bank (IMFB) and Micro Credit, each bank getting N205.2 million respectively.

- Olutayo Adenekan, chairman, National Association of MFBs Lagos State chapter, sees the action as being selective. “Government is not doing the right thing. Government has been selective by focusing only on six or seven banks. It is not right! We have close to 800 banks; government should have divided them into various senatorial districts and mobilise them. It should be a massive mobilisation,” he asserted.

EBRD boosts microfinancing in Tajikistan
6.29.09
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- The EBRD is supporting small businesses in Tajikistan with an investment to help set up a new microfinance institution in the country.

- In response to the high demand for funding from small businesses in Tajikistan, the Bank is making a $2 million equity investment in the new AccessBank, majority-owned by Access Holding Microfinance AG, a Berlin-based group of financial institutions active in microfinance throughout the world.

- Other investors in the project are the International Finance Corporation (IFC) and Germany’s Kreditanstalt fuer Wiederaufbau (KfW). Together with the EBRD’s investment, the total contribution of these institutions is $11 million.

- Upon its launch in late 2009, AccessBank will offer Tajik businesses micro-loans and agribusiness loans. The bank will later diversify its portfolio with new products, including micro-leasing, micro insurance products and credit cards.

Customers Troubled Over Distressed Greenhouse Investment
6.28.09 (Nigeria)
Link to full article

- Customers of GreenHouse Investment Solutions have expressed concern over the uncertain state of the microfinance institution as it battles to recover from failed investments that led to its temporary closure, which could sound the death knell for the microfinance sector that is gradually gaining public trust and patronage by depositors.

- The crisis rocking GreenHouse Investment Solutions, Financial Vanguard gathered, is arising from failed investments, mismanagement, poor corporate governance and infighting among management and staff of the institution.

- A marketer with the GreenHouse said a new dimension was added to the problem when the former manager resigned to open his microfinance bank and went with a sizeable number of staff.

- In his reaction, Chairman of Lagos State Association of Microfinance Banks, Mr. Adenekan, said though the association is investigating the case of a closed bank, he is not aware of the closure of GreenHouse.

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