Posts Tagged ‘india’

Posted on December 18, 2008 - by James

India: Microfinance Institutions Emerge as Next Asset Class…

Recently, three micro finance institutions (MFIs) of varying sizes collectively received private equity (PE) investments of around Rs 550 crore (USD 115.5 ml). So, what is making the micro finance sector more attractive, especially at a time when marque names among corporates are struggling to keep their heads above water? 

Recently, three micro finance institutions (MFIs) of varying sizes collectively received private equity (PE) investments of around Rs 550 crore. 

While SKS, the country’s largest, tied up Rs 336 crore worth investments, two-year-old Ujjivan Financial Services got Rs 94 crore, compared with Rs 75 crore that it originally set out for. Spandana, the second largest by assets, has seen an infusion of Rs 100 crore. It is the kind of money that could potentially bailout quite a few companies across sectors hit by the ongoing financial crisis. Till recently, such investments went into retail or real estate… [click here to read the rest of this article...]

Posted on December 11, 2008 - by James

India Needs Game Changers in Microfinance…

The outreach that the Indian microfinance industry has achieved, through both the MFIs and the Bank-SHG linkage model over the last 10 years, is impressive. Today, over 50 million poor women have access to very small loans. I believe this is the main accomplishment of the Indian microfinance sector over the last 10 years. However, there are issues that underly this accomplishment. First, both India and Bangladesh have problems rooted in the near exclusive reliance on group lending. The structures built are yielding tiny loans to millions of poor women and are not being leveraged to provide other financial products that build income and assets.

Group lending is very powerful as a “startup” product, particularly for poor women, because it has built into it an empowerment component, a community component and a social component. The problem is that the SHG and Grameen-type group lending models have been used only to make very small loans. These groups involving 50 million poor women in India are organs that could be used to provide vital savings services, insurance services and housing finance. None of this has been done. The focus on microcredit — not microfinance — has been a very limited, superficial use of national grassroots outreach structures… [click here to read the rest of this article...]

Posted on December 1, 2008 - by James

Big microfinance firms taking over clients of smaller players

Posted on November 29, 2008 - by James

Indian Microfinance Grows Fast But Without Purpose

Microfinance continues to grow fast and furiously but also narrowly and somewhat purposelessly. This is the verdict of the State of the Sector Report 2008, which reviews the progress of the sector every year. The report says that serious concerns remain around trends of growth among better-off clients with no effort to consciously target the poor, as well as high costs for lenders and borrowers and lack of depth of services.

The sector saw impressive growth, with clientele expanded by 9.9 million taking the number of total clients to 54 million. The outstanding loan portfolio also grew by nearly INR25 billion (US$500 million). The year also saw the continuation of the trend of heightened activity by private equity and venture capital funds.

The report draws attention to problems facing the sector, including availability of funds, increasing resource costs, higher risks, limitations on HR availability and also a passive policy environment. Federations seem to face problems in raising resources forcing them to become state-dependent, except in the case of mutually aided cooperatives, says the report. The report notes with concern the continuing skew in favor of the southern region which continues to have a much larger share of the outreach and volumes than the other three regions put together. The report recommends that consolidating the existing client base and fulfilling their financial services needs more comprehensively hold the key to lower costs, higher returns and client loyalty… [click here to read the rest of this article...]

Posted on November 18, 2008 - by James

Vikram Akula to step down as CEO of SKS Microfinance

Vikram Akula, founder of SKS Microfinance (SKS ), has announced plans to step down from the role of CEO after 10 years.  Mr. Akula says that this change will allow him to focus on a new initiative - microinsurance.  As MicroCapital reported earlier this year, SKS partnered with Bajaj Allianz Life Insurance Company to offer insurance products toclients.  This announcement comes amid rapid growth in the company. Suresh Gurumani, Director, Barclays Bank, will take over as SKS Microfinance’s CEO.  An official transition date was not given… [click here to read the rest of this article...]

Posted on November 14, 2008 - by James

India: SKS Raises 75m USD in Fourth Round…

The round is led by Sandstone Capital, an India focused hedge fund, and is largest investment in an MFI.

In the largest microfinance deal in the world, Hyderabad based SKS Microfinance has raised Rs 366 crore or $75 million from private equity investors. This is fourth round of fund raising by SKS. Sandstone Capital, an India focused hedge fund with $1 billion capital under management, has led the deal, while the other investors in this round include SVB India Capital and Kismet Capital.

This is the largest investment in a micro finance institution anywhere in the world, said SKS Microfinance founder CEO Vikram Akula. Since October last year the MFI has raised Rs 563 crore in three rounds of funding.

“We are  going to be using these funds to leverage access to commercial finance and scale of our outreach in next two years,” said Akula. SKS currently has 1,400 branches with 12,000 employees, and Akula plans to double that in the next two years. He also said that microfinance remains largely unaffected from the global economic meltdown… [click here to read the rest of this article...]

Posted on November 13, 2008 - by James

Leading Indian MFI Cashpor Adopts ClassifEye Secure Mobile Transactions Solution

New Delhi, November 10 – Classifeye, a leading developer of secure fingerprint authentication technology, announced today thatCashpor India, one of India’s leading microfinance institutions (“MFI”) has adopted ClassifEye’s innovative camera-phone-based transactions and authentication solution. This will help to facilitate broader financial inclusion, enabling Cashpor to broaden its customer base and allow their agent-serviced customers to improve their financial reach.

ClassifEye’s solution is driven by innovative imaging technology that uses camera phones to deliver secure and reliable services for MFI served customers. Customers can access a broad range of financial services that are handled by the MFI in order to manage loans, make deposits and execute other operations via field agents who are equipped with internet-enabled cellular phones. Each transaction request is authenticated via MFI agents’ camera-phones, which are used to capture an image of each customer’s fingerprints, following initial customer registration by the field agents through traditional procedures. The service has been successfully tested by leading banks and MFIs… [click here to read the rest of this article...]

Posted on November 11, 2008 - by James

Live Blogging: Poor, Poorest, Ultra-Poor….

The second plenary session at the Microfinance India Summit was entitled “Graduating the Poor in to Microfinance”. The session focused on the progress MFI’s have made in reaching the poorest of the poor, beginning with a presentation by Syed Hashemi of the World Bank. 

Much was said about the inability of MFI’s to reach the most vulnerable households, with participants ultimately resorting to semantic considerations on the definition of the poorest (David Gibbons at Cashpor) as well as outlining the need for targeted ‘Ultra-poor’ programs, such as those sponsored by SKS and Bandhan, with short presentations made by Vikram Akula, CEO SKS, and CS Ghosh, CEO Bandhan (the Bandhan program, as it happens, is currently being evaluated by CMF RA, Jyoti Mukhopadhyay.
While one might be tempted to go in to the details of the Ultra-poor programs described, perhaps the highlight of the session – and possibly the day – was a candid back and forth between Gibbons and Akula… [click here to read the rest of this article...]

Posted on November 6, 2008 - by James

India: Bill Proposes NABARD to be MiFi Regulator

MUMBAI: A new microfinance law is underway, with the Union Cabinet on Friday clearing the bill despite an opposition from some official quarters citing lacunae in it. The bill will be tabled in the current session of Parliament. 

The bill for microfinance will empower the National Bank for Rural and Agricultural Development (Nabard) to regulate the microfinance sector in India. While microfinance institutions, operating in the form of trusts, societies and co-operatives will now come under Nabard, non-bank finance companies have been kept out of the ambit. Significantly, the minimum capital required has been fixed at as low as Rs 1 lakh… [click here to read the rest of this article...]

Posted on November 3, 2008 - by lincolnw

Indian MFIs face challenge of global meltdown

Financing for the poor is getting more frugal now with microfinance institutions facing the heat of the global financial meltdown. There has been a virtual halt in fresh disbursements to MFIs by banks and financial institutions coupled with over 200 basis points hike in interest rate. It does not end at credit squeeze alone. Banks are also asking for personal guarantees of directors of MFIs.

A few banks have hiked the security margins from 10% to 25% over the loan amount sanctioned to banks. As a result, MFIs are unable to use even sanctioned funds. According to sector trackers, MFI sector may have trouble raising loans till January as banks will try to complete their priority sector lending targets more aggressively only in the last quarter of the fiscal…{click this link to read the rest of the article}

Posted on October 9, 2008 - by lincolnw

Indian Technology Company, Comat, Raises $12.5m from Omiydar Network and Unitus Equity Fund of the United States…

Comat, a technology company providing services to rural India, recently raised INR 60 crore (USD 12.5m) from the Omidyar Network and the Unitus Equity Fund (UEF). According to a Business Standard article, the new investment will allow “Comat to expand to new States, accelerate service delivery for training and financial services [and] strengthen management bandwidth.”

Comat provides a number of technological services that incorporate India’s rural poor. For instance, they participate in “software development, hardware procurement, systems integration, and kiosk deployment and operations” related to rural kiosks, which allow villagers to access technological services. They also work with government to provide the technical backing for policies and programs designed to assist the poor. Comat is a for-profit business that also focuses on achieving positive social goals. Financial data was not available on the company’s website… [click here to read the rest of this article...]

Posted on October 7, 2008 - by James

PepsiCo Foundation Announces Innovative New Initiatives to Drive Sustainable Water Practices…

PepsiCo Foundation announced today two major new grants to WaterPartners and Safe Water Network programs to provide access to safe water and sanitation for individuals and communities in developing countries .

The grants, totaling $7.6 million, are a component of the ongoing commitment by PepsiCo Foundation to promote and accelerate sustainable approaches to water access, conservation and usage in underserved regions . This commitment seeks to create awareness and generate change to help achieve the United Nations Millennium Development Goals. In the last year, PepsiCo Foundation and PepsiCo have made more than $16 million in commitments for water projects around the world… [click here to read the rest of this article...]

Posted on September 12, 2008 - by James

Business Standard: Stringent norms strengthening MiFi in India…

he microfinance sector in India, which is presently growing around 130 per cent, is expected to get into the consolidation mode in the near future.

The sector, which has lent close to Rs 10,000 crore, is moving aggressively to expand its operations. With tighter capital adequacy norms expected to come into place in 2009 and 2010, a whole lot of smaller Microfinance Institutions (MFI), are expected to be acquired by larger players.

In India there are around 135 MFIs and with good prospects ahead for them, 50 of these have converted themselves in Non-Banking Financial Companies (NBFCs) as they expand with a larger equity base.

“The CAR will be 12 per cent during the next year and then by 2010 it will be 15 per cent. Not many MFIs can sustain this and consolidation will happen in the next two years,” said a… [click here to read the rest of this article...]

Posted on September 10, 2008 - by James

Indian Microinsurance Conference: Sept 19…Get

Event Details:

 

Indian Microinsurance: What Works?

Date:	19 Sep 2008 - 19 Sep 2008
Sponsor:	Microfinance Insights & IFMR Foundation
Location:	Mumbai, India
Country:	India
Regions:	South Asia
Contact Name:	Jerilene Creado
Telephone:	+91 22 4035 9210
Email:	jerilene@mfinsights.com

Posted on September 4, 2008 - by James

India making the news again… comm. banks buying up MFIs’ farm loans…

Move helps lenders meet agri-lending targets, boosts micro-finance institutions’ CAR.

Private banks are increasingly buying the farm loan portfolio of micro-finance institutions (MFIs) in an attempt to meet the agriculture sector lending targets.

Such transactions also help MFIs meet the capital adequacy ratio (CAR) of 12 per cent as their total asset base goes down after the sale. In addition, it assists banks meet the priority sector lending targets because they are required to extend 13.5 per cent of their advances as direct agricultural loans.

Grameen Capital India, which recently facilitated a Rs 100-crore deal between IndusInd Bank and SKS Microfinance is now working on three to four more such transactions. During the last four months, it has facilitated agri-portfolio transactions worth… [click here to read the rest of this article...]

Posted on September 3, 2008 - by James

India: Micro finance institutions increase lending rates…

CHENNAI: The rising interest rate regime is having a telling effect on borrowing costs of practically all industries. After commercial banks, it’s the turn of micro finance institutions (MFIs), to increase their lending rates, thereby signalling higher borrowing costs for the industries and people who live on the fringes of the society. 

Micro finance institutions are those which provide financial services to poor or low-income clients, including consumers and the self-employed. 

The Chennai-based Equitas has recently raised its lending rates by 1%. “While our borrowing rates have increased by 1%, our lending rate increase has been commensurate with our borrowing rates,” said PN Vasudevan, MD, Equitas. The MFI provides… [click here to read the rest of this article...]

 

 

 

 

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Posted on August 27, 2008 - by James

Online Risk Management courses being provided in India…

Online Course on Risk Management for Rural Poor

Centre for Insurance and Risk Management 

Centre for Insurance and Risk Management at IFMR in India to Conduct Course October 6 – November 10, 2008

Posted on August 26, 2008 - by James

India Forum: Sa-Dhan to market microfinance concept to rural areas…

The Financial Express

The apex body of micro-finance institutions in the country, Sa-Dhan, has drawn up an action plan to help vigorously market its concept to the rural folk in the eastern part of the country, particularly Orissa and West Bengal. It has planed a two-day policy conclave— Breaking the vicious cycle of poverty: synergy between micro-finance and livelihood—from August 25… [click here to read the rest of this article...]

Posted on August 26, 2008 - by James

India: Change of Guard at Cooperative Development Foundation (CDF)…

HYDERABAD, INDIA, August 15 - Sandhya Rani will succeed Rama Reddy as Cooperative Development Foundation (CDF) President on 1st September 2008.

Dear friends of civil society organisations (CSOs), mutually aided cooperatives (MACs), self help groups (SHGs) and microfinance institutions (MFIs), I have great pleasure in informing you that Ms Sandhya Rani, currently Vice President of Cooperative Development Foundation (CDF-Sahavikasa), will succeed me as President with effect from 1st September 2008. I will cease to be a trustee and the president of CDF-Sahavikasa on 31st August 2008. From 1st September 2008, Sandhya will be performing the functions, discharging the responsibilities, and exercising… [click here to see the rest of this article...]

Posted on August 25, 2008 - by James

How Technology Will Save Microfinance…

No one likes a handout — not the giver and not the taker. But how do banks help the poor with loans, when the loans are so tiny that just servicing them will drive banks out of business?

Kanakapura is a township of about 50,000 on the fringes of Bangalore. It’s known more for the road that leads to it: Kanakapura Road, on which an… [click here to read the rest of this article...]