Posts Tagged ‘cgap’
Posted on November 20, 2009 - by boris
CGAP released new report on the future of mobile banking…
CGAP, a microfinance group based at the World Bank, and the U.K.’s Department for International Development (DFID) released a new report “Scenarios for Branchless Banking in 2020″. The report is the product of a six month scenario-building project that engaged nearly 200 leaders from the fields of technology and finance from more than 30 countries.
Four scenarios on the future of branchless banking are considered in the report. In all of them the adoption and use of branchless banking services is forecasted to extend by 2020. But in two of the scenarios, bursts of rapid speed-up are followed by periods of decline or flatter growth.
The great attention is paid to poor people who are presently unbanked but will use the branchless banking methods such as mobile phones and the internet in perspective.
Source: http://www.ecommerce-journal.com/news/25357_cgap-released-new-report-future-mobile-banking?drgn=1
Posted on June 15, 2009 - by Gavin
Africa pioneers mobile bank push…
BBC News
Mobile financial services in the developing world could be worth $5bn by 2012, say analysts.
CGAP – a consortium that works to expand financial services in developing countries – said the growth in mobile coverage was helping to fuel growth.
More than one billion people in the developing world have access to a mobile phone, but no bank account.
In February 2009, Bill Gates pledged $12.5m (£8.6m) to help the world’s poor access banking services.
The Consultative Group to Assist the Poor (CGAP) said it thought the number of people with access to a mobile phone, but no bank account, would to rise to 1.7 billion in 2012.
It also expected more than one in five to use their mobile to access banking services, creating a market worth up to $5bn (£3.05bn).
“There’s a lot of excitement, but very little understanding what’s going on,” said Mark Pickens, microfinance analyst at CGAP. (more…)
Posted on June 15, 2009 - by Gavin
Mobile money to the poor will see $5 bln market in 2012…
Reuters
HELSINKI,(Reuters) – The market of mobile financial services to poor people in emerging markets will surge from nothing to $5 billion in 2012, U.S.-based microfinance policy and research center CGAP said on Monday.
Mobile money is one of the hottest topics in the wireless world, but so far take-up of services has been mostly limited to a few emerging markets, as in developed countries the popularity of online banking has been a brake on mobile money.
“Theres a lot of excitement, but very little understanding what’s going on as the number of implementations is still limited,” said Mark Pickens, microfinance analyst at CGAP.
The market began in early 2007 with a launch of Safaricom’s (SCOM.NR: Quote, Profile, Research) M-PESA in Kenya, which has attracted 6.5 million customers, or one in six Kenyans.
Operators in several emerging countries have followed, and by end-2009 CGAP expects more than 120 mobile money implementations in developing markets. (more…)
Posted on June 5, 2009 - by Gavin
Can Microfinance Help the Poor?…
The Stanford Progressive
For many of the 3 billion poor in the world, poverty does not just mean a limited access to financial resources; extreme poverty implies malnutrition and starvation, exposure to disease, an impediment to education, a reduction of rights and privileges, and possibly death. However, microlending can ease the extent of poverty. It is estimated that microlending organizations have helped over 67.6 million poor people. This level of success is what has excited so many to advocate microfinance as a means of reducing poverty: today, it is estimated that over 7,000 unique microfinance institutions exist. Even so, critics of microfinance are very vocal in their attacks on its efficacy and success. Globalisation Institute economist Tom Clougherty writes, “There are a number of criticisms leveled at microfinance and chief among them is that microfinance is just a ‘band-aid’, that it simply covers up the real problems without actually addressing them.”
What accounts for this discrepancy among economists?
David Hulme, Professor of Development Studies at the University of Manchester claims, “MFIs [microfinance institutions] virtually never work with the poorest – the mentally and physically disabled, the elderly, street children, the destitute and refugees – and many MFIs […] have high proportions of clients who are non-poor.” Hugh Allen, a faculty member of the Boulder Microfinance Training Program, adds that many smaller MFIs are unable to work with the very poor because “roads are bad, qualified staff may be expensive and hard to find, markets may be scattered, and the legal system dysfunctional.” (more…)
Posted on May 27, 2009 - by Gavin
CGAP funder training in Jordan, June 14-18 – still some places available…
CGAP
CGAP will host its next training course for microfinance funders on June 14-18, 2009 in Amman (Dead Sea), Jordan. If you are a donor or investor who is new or recent to microfinance, Developing Inclusive Financial Systems for the Poor: How Funders Can Make a Difference is the course for you. We also welcome persons interested in a refresher on the new developments and trends in microfinance.
The course has been updated to reflect the latest evolutions in microfinance. You will gain knowledge of the broader microfinance landscape and current topics, as well as the nuts and bolts of how to effectively fund different kinds of interventions. In addition, we have organized visits to microfinance institutions in the region.
Join over 500 participants from 70 countries who have already benefited from previous courses and enrol today. For more information, application forms and deadlines visit www.cgap.org/direct/training/training.php or contact Barbara Gähwiler: bgahwiler@worldbank.org CGAP will host its next training course for microfinance funders on June 14-18, 2009 in Amman (Dead Sea), Jordan. If you are a donor or investor who is new or recent to microfinance, Developing Inclusive Financial Systems for the Poor: How Funders Can Make a Difference is the course for you. We also welcome persons interested in a refresher on the new developments and trends in microfinance. (more…)
Posted on May 27, 2009 - by Gavin
The Impact of the Financial Crisis on Microfinance Institutions and Their Clients…
Docuticker
CGAP: Consultative Group to Assist the Poor
The global financial crisis is spreading quickly in emerging markets, but little is known about its impact on the microfinance sector. Which regions are most affected and why? Are microfinance institutions (MFIs) proving resilient to this unprecedented economic downturn? How are MFI clients coping? What is the effect of the crisis on MFI business models? And how do MFIs foresee their liquidity situation in the near future?
CGAP surveyed MFIs in March 2009 to monitor the impact of the crisis. Support from MIX, the Microcredit Summit campaign, and large MFI networks enabled wide dissemination. Over 400 MFI managers responded, providing a good representation of regions and institutional sizes. MFI managers from institutions more affected than others might have more incentives to respond, so this analysis recognizes the risk of self-selection bias.
+ Full Document (PDF; 375 KB)
Source: http://www.docuticker.com/?p=26190
Posted on May 26, 2009 - by Gavin
PAPER WRAP-UP: Microfinance Funds Continue to Grow Despite the Crisis, by the Consultative Group to Assist the Poor (CGAP)…
Microcapital
According to recent CGAP research report, microfinance funds have not been severely impacted by the global financial crisis.The report acknowledges that while emerging market funds have experienced a 20 percent sell-off, microfinance investment funds (MIVs) experienced positive returns in 2008.In fact, assets in the top 10 microfinance investment funds grew by 32 percent in 2008.The report is based on UBS Investment Research regarding economic comment on the state of the emerging markets, CGAP and Symbiotic’s (a microfinance investment advisor) research on the top 10 microfinance investment vehicles (MIVs), and the historical performance of euro-denominated funds as obtained from the Symbiotics Microfinance Index EUR.
As of December 2008, there were 104 active microfinance funds with total assets under management of USD 6.5 billion.CGAP notes that the industry is very concentrated (private equity funds, holding of microfinance banks, fixed income funds, structure finance vehicles and a broad range of institutions) with the top 10 funds holding about 60 percent of the asset base.
The International Finance Corporation (IFC), a member of the World Bank Group, as well as other Development investors are presently active in the microfinance community and have been strengthening their portfolios in response to the credit crisis.Retail investors have also contributed to the growth of microfinance funds in 2008.For example, a retail-oriented fund, the responsAbility Global Microfinance Fund has increased by 17 percent since September 2008 and 96 percent for the year.
Posted on May 15, 2009 - by Gavin
Microfinance Institutions Face Growing Pressures…
CGAP
Washington, DC—Despite the severity of the current global financial crisis, microfinance institutions (MFIs) have shown greater resilience than many traditional banks, according to a new survey conducted by CGAP, in collaboration with the MIX, the Microcredit Summit, ACCION, Grameen, FINCA, Freedom From Hunger, MicroFinance Network, Opportunity International, Women’s World Banking, and Sanabel.
There have been few failures among MFIs since the onset of the current financial crisis. However, the more than 400 respondents to the March survey reported significantly tougher market conditions.
The full impact of the financial crisis is likely to be felt in the second half of 2009. Accordingly, many MFIs are taking steps to cope, such as taking a more conservative lending approach and, in some cases, even cutting staff.
“Many poor households are struggling with the many consequences of the global food, financial, and employment crises,” said Elizabeth Littlefield, CGAP’s chief executive officer. “Their income sources, like revenue from small businesses or from money sent from families working abroad, have become more erratic. At the same time, many expenses, like food, are still far higher than before. Savings are thus being withdrawn and loan repayment rates to MFIs are worsening.” (more…)
Posted on May 8, 2009 - by Gavin
MICROCAPITAL STORY: MicroVentures Reports Investments in Equitas Microfinance of India and Sahayata Microfinance of India, Caritas del Peru and Fondesurco of Peru…
Microcapital
During March and April MicroVentures, a microfinance investment vehicle, reported four loans to the Consultative Group to Assist the Poor (CGAP) Microfinance Dealbook, a monthly report on microfinance capital market transactions. Two equity investments were made to Indian microfinance institutions (MFIs) Sahayata Microfinance Ltd and Equitas Microfinance Ltd in March of USD 3.7 million and USD 4.4 million respectively. MicroVentures also granted loans to Caritas del Peru of USD 1 million and to Fondesurco of Peru of USD 750,000 during April.
According to a press release from MicroVentures, Sahayata has been active in the Indian state of Rajasthan since 2007. It serves around 37,000 women clients and the USD 3.7 million increase in equity should allow Sahayata to reach 150,000 clients by March 2010. Sahayata Microfinance Ltd does not report to the MIX market, the microfinance information clearinghouse, so no further details are know about total assets or gross loan portfolio.
Equitas Microfinance Ltd, formerly known as UPDB Micro Finance, was established in 2007 in the state of Tamil Nadu and currently has 10 branches serving over 16,000 borrowers. It lends to women who are organized into joint liability groups and does not take deposits. The investment of an additional USD 4.4 million in March will strengthen MicroVentures partnership with Equitas, according to a recent press release. This increase in equity will fund expansion plans outside of Tamil Nadu. (more…)
Posted on May 7, 2009 - by Gavin
MICROCAPITAL STORY: Bangladesh Microcredit Regulatory Agency (MRA) Limits Interest Rates for Microfinance Institutions…
Microcapital
At a meeting recently held at the Bangladesh Bank, the Microcredit Regulatory Agency (MRA) of Bangladesh announced that microfinance institutions (MFIs) will have to limit the interest rates they charge clients to a flat 15 percent or an effective rate of 30 percent. An MRA official said that the move is an interim measure, and that the MRA will announce a final interest rate policy for MFIs after “conducting an in-depth study”. In addition to the limits on interest rates the MRA announced that MFIs cannot collect deposits totaling more than 80 percent of their total outstanding loan portfolio, in order to prevent financial fraud. Additionally, according to a senior MRA official, MFIs will be empowered to purchase any fixed asset on the basis of the executive committee’s approval instead of the board of director’s consent. The MRA also asked that NGOs offering microfinance separate their microfinance activities from other business activities otherwise all of their business activities will fall under the monitoring and supervision of the MRA.
The differing limits on interest rates imposed by the MRA results from the method of calculating flat interest payments used by many microfinance institutions. In contrast to calculating interest payments off of the declining balance of the loan, some MFIs charge flat interest rates on the original amount of the loan, even as the loan balance declines. The result is an effective interest rate substantially higher than the stated flat rate, thus the MRA’s dual restriction of 15 percent flat and 30 percent effective. Because microfinance clients are often illiterate and financially inexperienced (or too trusting of the local NGO), flat interest rates sound appealing. By imposing a limit on both flat and effective rates the MRA is trying to regulate against this deceptiveness. (more…)
Posted on April 28, 2009 - by Gavin
Microfinance Managers Consider Online Funding: Is It Finance, Marketing, or Something Else Entirely?…
Symbiotics
Washington D.C., United States, – Online platforms are changing the way we engage with the world. Facebook links, eBay auctions, ePal chats, even Second Life avatars—these are all online platforms that connect people, ideas, products, and markets. These platforms shape who we connect with as well as how we connect. This concept extends to philanthropy: Online philanthropy is changing the nature of how and where people give. An outgrowth of online philanthropy is online social investing.
Kiva.org is one of the best known online lending and investment platforms. Since its launch in 2005, Kiva has grabbed the attention (and wallets) of over 350,000 online lenders, called “Kiva Lenders,” who are eager to loan as little as $25 or $50 to microentrepreneurs through Kiva and its microfinance institution (MFI) partners. Kiva has inspired many other new online lending platforms.
Not surprisingly, Kiva’s success also has gained the attention of a growing number of MFIs that are searching for the capital and public awareness that the Kiva online lending platform often can provide. Kiva’s marketing function is hard to quantify, but Kiva’s widespread presence in the news and entertainment media, ranging from the Wall Street Journal to the Oprah Winfrey Show, makes Kiva and the MFIs whose clients are featured on Kiva.org important ambassadors for microfinance. (more…)
Posted on April 23, 2009 - by Gavin
M-finance broadens access to services…
Business Daily Africa
New research reveals that mobile financial services offer some of the best commissions in the world — threatening to knock toothpaste from its lofty perch as the most lucrative product for profit hungry merchants.
CGAP, a global microfinance centre, has found that in the Philippines, commissions earned from sales of everyday commodities are starting to take a back seat as M-banking proves more favourable business case for merchants.
According to CGAP’s data, while toothpaste earns merchants a cool 10 to 12 per cent margin, many are increasingly being attracted to the better performing mobile banking model that promises much smaller commissions at greater volumes.
Thus, the group is now urging the world to embrace m-finance to save itself from the vagaries of the ongoing financial credit crunch.
“This financial crisis cannot mean the end of innovation. Let us remember that some of the greatest innovations of the past century — the pocket calculator, television, the World Wide Web — were created during times of economic hardship,” said Elizabeth Littlefield, CGAP CEO. (more…)
Posted on April 21, 2009 - by Gavin
Financial crisis may hit microfinance industry…
Daily News
Although the micro- finance industry has shown impressive growth and a degree of resilience in the recent past, the pause in global growth momentum under the current financial crisis might have a negative impact in the near future, said Director, Centre for Banking Studies, Udeni Alawattage.
He was speaking at the inauguration of the four-day International Seminar on “Microfinance for inclusive Development and Sustainable Growth” at the Centre for Banking Studies Rajagiriya yesterday.
Under the current global financial turmoil, market signals on funding for microfinance are clearly indicating a tightening as money will become more scarce, more conservative and more costly and based on the recent experiences some clients may understandably worry about the safety of their life savings and decide that the mattress is safer, he said.
However, this phenomenon, both positive and negative, provides an opportunity for micro finance professionals, practitioners and regulators to catch a breath, re-evaluate and challenge their current status-quo and assumptions to chart a new path forward, he said. (more…)
Posted on April 21, 2009 - by Gavin
MICROFINANCE EVENT: Discussion on Global Assets Project policy brief, “Savings-Linked Conditional Cash Transfers: A New Approach to Global Poverty Reduction,” by Jamie Zimmerman and Yves Moury…
Microcapital
The New America Foundation, a nonprofit and nonpartisan public policy institute, will host a discussion on the new Global Assets Project policy brief, “Savings-Linked Conditional Cash Transfers (CCTs): A New Approach to Global Poverty Reduction.” The policy brief, published April 2009 by the New America Foundation, was written by Jamie M. Zimmerman, Deputy Director of the Global Assets Project, and Yves Moury, Chief Executive Officer South African financial services company Edge Finance.
CCT Programs (p3) are government subsidized anti-poverty strategies that offer economic assistance to individuals or households based on behavioral conditions. The conditions aim to encourage behaviors such as regular school attendance and health checkups for children; pre and post-natal care for pregnant women; participation in job training courses; or participation in community development projects or community services. Traditionally, the economic assistance has been delivered in person in the form of cash or food aid (p7). However, the policy brief makes the case for delivering CCTs through government to person (G2P) cash transfers (p4) directly into savings accounts as a two-pronged strategy of more efficiently supplementing income and building productive assets.
The savings accounts would be managed by banks or microfinance institutions.
In addition to the two authors, discussion panelists will include Michelle Adato, a Senior Research Fellow at the International Food Policy Research Institute (IFPRI); Mark Pickens, a Microfinance Analyst at the Consultative Group to Assist the Poor (CGAP); Marguerite Robinson, Independent Consultant and author of “The Microfinance Revolution”; and Luis Tejerina, an Economist at the Inter American Development Bank (IDB). (more…)
Posted on March 18, 2009 - by Gavin
MICROCAPITAL STORY: Challenges to Regulation of Mobile Transaction Services, E-Money, and other Branchless Banking Technologies…
Microcapital
In March 2007, when Kenyan cellphone service provider Safaricom launched its mobile payment service M-Pesa (‘M’ for mobile; ‘Pesa’ meaning money in Swahili), it predicted the service would attract 450 thousand customers by January 2008. The service caught on, and fast. When January 2008 rolled around, M-Pesa had more than doubled its goal, registering more than 1 million users in ten months. People began using M-Pesa credits to pay for everything from well water to cab fare. According to Wired magazine, almost a third of Kenya’s population now pays their electricity bills via mobile device.
M-Pesa has now registered over 5 million users, and continues to register 10 thousand more each day. As discussed in this MicroCapital article, many banks and microfinance institutions (MFIs), such as Equity Bank in Kenya, have begun to adopt cellphone cash-transfer services as a way to minimize administrative costs and penetrate markets otherwise unreachable by traditional banking.
Mobile transaction services, e-money, and other branchless banking technologies have also flourished in a number of developing nations beyond Kenya, most notably Brazil, India, Peru, the Philippines, South Africa, Russia, and Colombia. However, where the rapid growth of branchless banking has sparked the imagination of many, others’ optimism is shadowed by apprehension and concern that inadequate regulation in the nascent industry may place customers’ already vulnerable finances at risk. (more…)
Posted on March 17, 2009 - by Gavin
What commercial banks entering the microfinance market must consider…
Ghana Business News
Commercial banks in Ghana are gradually expanding their operations to the microfinance market as the opportunities in the traditional banking sector dwindles. Traditionally, commercial banks have shunned the microfinance sector, allowing it to be dominated by the “Alternative Financial Institutions” which consist of small savings and loans companies and Susu collectors.
The reason for neglecting the microfinance market is simply that the low-income earners, the main clientele for microfinance services, are not “bankable”. They are too risky to be served because they present high default risk and high cost of service due to their low amounts of savings or loans, hence commercial banks serving this market obtain too little from doing too much.
However, the emergence of large scale and well-organised microfinance institutions has made the commercial banks realise the opportunities they are missing by neglecting the microfinance market.
The benefits of banking with the “unbankable” has been advocated for over twenty years in Asia and Latin America where microfinance has gained a strong foothold. (more…)
Posted on March 10, 2009 - by Gavin
MICROFINANCE EVENT: Chuck Waterfield and Tony Sheldon Teach Course on Microfinance Business Planning and Financial Projections Using Microfin Software…
Microcapital
Business Planning and Financial Projections with Microfin Course
April 27 to May 1, 2009, 9:00 AM to 5:00 PM, Washington, DC
Chuck Waterfield and Tony Sheldon will teach a five-day (Monday to Friday) training course on the use of Microfin 4.0, the financial projections software that they developed for microfinance institutions (MFIs) to develop detailed five-year budgets. The course will be very hands on, and cover topics including the most important financial ratios to monitor, and how to interpret them; articulating the institution’s mission; designing and pricing products to meet clients’ needs; determining the institutional resources and capacity; and how to develop long-term diversified financial strategies.
The workshop is based on the Consultative Group to Assist the Poor (CGAP) publication, “Business Planning and Financial Modeling for Microfinance Institutions Handbook,” that Mr. Waterfield and Mr. Sheldon coauthored. A summary of the handbook and instructions on obtaining a copy are available here. CGAP will provide financial support for the course, along with Women’s World Banking (WWB) and the Swedish International Development Cooperation Agency (Sida). (more…)
Posted on March 10, 2009 - by Gavin
Global seminar to encourage mobile branchless banking in third world countries…
Mobile Tech News
Windsor, England — Despite regulatory challenges and the financial crisis, policymakers are embracing mobile banking as a means of providing financial access to the unbanked poor. More than a billion people worldwide lack bank accounts, but do have mobile phones, providing a dramatic opportunity to achieve greater financial inclusion, according to officials meeting near London today.”Mobile banking services offer millions of poor people a route out of poverty by helping them to improve their incomes and pay for healthcare and education. It is vital that policymakers ensure that the needs of the poor are central as they develop regulation for this innovative and emerging sector,” said Mike Foster, UK Minister for International Development.
To promote effective regulation of mobile banking, CGAP, DFID, and the Alliance for Financial Inclusion (AFI) have organized the second Global Leadership Seminar for high-level policymakers and regulators who set policy for branchless banking, including mobile banking.
“Mobile banking holds great potential, and CGAP is encouraged to see that governments everywhere are being deliberate and thoughtful as they merge the domains of finance, payments, and telecom to create a framework that balances customer needs with concerns around security and prudential regulation,” said Elizabeth Littlefield, CEO of CGAP, a microfinance center based at the World Bank. (more…)
Posted on February 27, 2009 - by Gavin
Are Microcredit Interest Rates Excessive?…
CGAP
Are microfinance institutions (MFIs) exploiting poor borrowers by charging them excessive interest rates? Some think so. In 2007, for example, a controversy erupted around Compartamos, a Mexican MFI that was earning a 55 percent return on shareholders’ equity by charging its borrowers interest rates around 85 percent. The real question is, are high interest rates and profits like Compartamos’s outliers, or are they typical for a large number of MFIs?
Today, there’s widespread agreement that most MFIs should operate sustainably, keeping their costs as low as possible and charging interest rates and fees high enough to cover those costs. Making thousands of tiny loans entails higher administrative costs than making a few big loans, so sustainable MFIs must charge higher interest rates than normal banks do. But how much higher?
“There are huge variations in the interest rates and related circumstances of individual MFIs around the world,” says CGAP expert Rich Rosenberg. “There’s also intense debate about how high interest rates and profits would have to be to qualify as ‘excessive,’ and indeed about whether terms like this have any useful meaning at all, at least in the arena of for-profit microfinance.”
While, there can be no one-size-fits-all answer to the question of whether microcredit rates are excessive, a new CGAP/MIX study of over 500 MFIs found data that shed important light on the issue. (more…)
Posted on February 26, 2009 - by Gavin
PRESS RELEASE: Winners from the 2008 CGAP Microfinance Photography Contest…
Microcapital
Somenath Mukhopadhyay, a teacher in a government-run school in West Bengal, India, is the winner of the 2008 CGAP Microfinance Photography Contest. The judges unanimously chose this image of a young girl preparing radishes to take to market in Tarapur village, Birbhum, for the top prize. Amateur photographer Mukhopadhyay won out over more than 700 entries from professional and nonprofessional photographers in 40 countries all over the world.
Second prize goes to a photo of traditional spinning taken by Kushal Gangopadhyay. And third prize goes to accountant Ellen de Leon of the Philippines for a dramatic photo of a Muslim woman drying corn. The blocks of color in this image reminded judge Bob Annibale, global director of Citi Microfinance, of an abstract painting by American artist Mark Rothko.
In addition to the 20 other finalists, the judges awarded two special prizes for images that stood out for their representation of microfinance. Sandipan Majumdar captured this image of a camel owner making use of mobile technology at the Great Pushkar Fair, known as the Cattle Fair, which takes place every winter in Rajasthan. And the “towering sky, angular composition, and tonal quality” of this dramatic black-and-white photograph of fishermen hauling nets on Digha Beach taken in early monsoon season by Saikat Mukherjee, also warranted special mention, said judge Gary Cameron of Reuters.
The judges liked the image of solidarity captured by 2006 winner Srinivasa Rao Allamsetty in a photograph taken in early morning light during a group meeting in Orissa. (more…)
The MiFi Report
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