Posts Tagged ‘micro finance’

Posted on June 25, 2009 - by Gavin

Micro-finance can boost labour class income…

The Nation

KARACHI – The success of micro-finance institutions around the globe has established that it could make an important contribution in improving the socio-economic conditions of the poor. All stakeholders of micro-finance industry in the country need to realise that micro-finance is but one element of a
comprehensive strategy to combat poverty.

Interventions based on this can indeed lead to poverty alleviation, at macro scale, reports SBP publication, Towards Achieving Social and Financial Sustainability: A study on the performance of micro-finance in Pakistan.

The survey results revealed that the availability of loan had a partial impact to reduce the incidence of child labour.Though respondents expressed rise in their income levels as a result of availing the loan but it alone did not serve as a universal remedy to fully convince parents to take their children out of
work.

(more…)

Posted on June 4, 2009 - by Gavin

Credit crisis hits SME financiers…

Daily Nation

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Posted on June 2, 2009 - by Gavin

development: The price of micro-finance…

Daily Times

The high intermediation costs for a typical microfinance provider seem justifiable. Microfinance providers can however use other existing infrastructures or technologies to significantly lessen these operational costs

Since the creation of the Grameen Bank in Bangladesh, the use of micro-finance to alleviate poverty has gained recognition and support around the developing world, including South Asia. Besides providing credit, institutions have been developed to provide a range of other services for the poor, such as savings, home loans and even insurance.

However, the fact that micro-finance institutions end up charging much higher interest rates than commercial banks has led to much criticism concerning their alleged rent-seeking tendencies. To be fair, however, the role and compulsions of micro-finance merit a closer look, including their need to charge high interest rates, before concurring with such an unflattering conclusion.

Before focusing specifically on the issue of interest rates, however, let us contextualise the micro-finance industry in Pakistan. The financial sector in Pakistan as a whole has overall grown steadily in the recent past. Yet the sector’s outreach has largely been focused on a niche market in mostly urban areas, where it caters to the medium-high income group and the corporate sector. (more…)

Posted on May 29, 2009 - by Gavin

Micro finance initiatives bring new life to snake charmers…

The Statesman

BHUBANESHWAR, A snake charmers village, which was in distress, ever since the government imposed restrictions on such traditional activity, has undergone a socio-economic change, through micro finance initiatives.

Padmakesharipur, a village on the periphery of the state capital here, widely regarded as one of the few snake charmers villages, in the country, recently played host to bankers and NGO’s, involved in micro finance.

Adhikar, a micro finance institution, operating in 13 districts with 35 branches across the state, had started work at Padmakesharipur, four years ago, encouraging the women folk to avail loan from banks. They started with Rs 1,000 and today, these women have taken loan up to Rs 15,000, as productive loan and Rs 25,000 as housing loan.

Special camps were organised by Adhikar Microfinance and Neelachal Gramya Bank, Patia Branch, with sponsorship of IOB, for no frill accounts, in a large scale financial inclusion, for the people, at the village recently. Three hundred villagers participated and opened savings bank accounts. (more…)

Posted on May 5, 2009 - by Gavin

Rural poor worldwide to benefit from over $200 million in UN funding…

eGov Monitor

Poverty eradication efforts in developing countries are set to receive a cash injection of over $200 million from the United Nations rural development arm this week to help off-set the impact of the global financial crisis.

The new set of grants and loans from the International Fund for Agricultural Development (IFAD) will finance rural micro-finance projects, livestock support initiatives and natural resource management schemes among others.

Some 60 per cent of IFAD’s ongoing programmes already promote rural financial services and institutions that help give the rural poor access to global markets and help them cope with shocks such as unexpected severe weather patterns and commodity price volatility.

“Protecting and increasing the access of poor rural people to financial services is all the more important as the global financial crisis bites and as remittances shrink,” said IFAD President Kanayo F. Nwanze.

The IFAD executive board has approved more than $131 million in loans and $63 million in grants along with around $9 million in grants to international research centres and intergovernmental organizations. (more…)

Posted on April 23, 2009 - by Gavin

It’s Time to Put Affordable Health Care for the Poor Within Reach…

The Huffington Post

During these times when many of the poor are struggling for a livelihood, health care seems less affordable than ever to so many of the impoverished. A family illness already is the primary force shoving people back into poverty. It’s time for us to offer them the tools to push back.

A major part of the problem is that medical progress today typically arrives in partnership with high cost. As a result, poor people all over the world are left in desperate need of less expensive, but high-quality health care options.

Until recently, this dilemma seemed unsolvable. But new circumstances offer great hope to my own country, Bangladesh, and the poor around the globe, including the United States. Already in the United States, people are taking advantage of much more affordable health care delivery models such as retail health clinics and direct contracts for conveying health services between small businesses and hospitals. Many of the tools and services we are delivering in Bangladesh will inspire new, more affordable models for this cost-conscious environment.

Bangladesh has shown it is possible to make remarkable progress in health status no matter how poor and crowded a country is to start. In the last 40 years, the child mortality rate in Bangladesh dropped from about 24 percent to below 7 percent. (more…)

Posted on April 20, 2009 - by Gavin

Reserve Bank should ensure credit flow: Industry…

The Economic Times

NEW DELHI: India’s industry leaders feel the Reserve Bank of India (RBI) should focus more on pushing up sectoral credit disbursements, an industry lobby said.

According to a report prepared by the Associated Chambers of Commerce and Industry (Assocham), almost 92 percent of the chief executives said the RBI in its monetary policy should focus on reviving the growth momentum.

The survey, titled ‘RBI Monetary Policy Prospects’, took stock of the opinion of the industry on the economic scene and actions required to bring the Indian economy back on growth trajectory.

The participants said credit flow into sectors such as textiles, gem and jewellery and IT should be boosted.

Construction is another sector where investments need to be boosted to weather the slowdown. Most participants said this was a good time for RBI to take a re-look at the stringent regulations imposed on the real estate sector.

Though 69 percent of the respondents appreciated RBI’s efforts at reducing interest rates, most were also alarmed over the falling growth in industrial production; the index for industrial production showed a 1.2 percent decline in February. (more…)

Posted on April 15, 2009 - by Gavin

PE fund inflow to micro finance sector grows 242%…

Financial Chronicle

Even as private equity activities in India have shrunk, the deal flow into the micro-finance sector, which accounts for close to Rs 1,00,000 crore disbursements annually, has been robust with a growth of about 242 per cent in 2008-09.

There were 11 deals worth $178 million in during the financial year, compared with three deals worth $52 million in 2007-08, according to Venture Intelligence, a Chennai-based company that tracks private investments. Private equity investments into micro finance sector in India started from January 2007.

Last year saw the largest micro finance deal in the world, when Hyderabad-based SKS Microfinance raised Rs 366 crore or $75 million from private equity investors in November in its fourth round of funding. Sandstone Capital, an India-focused hedge fund with $1billion capital under management led the deal, while other investors in this round include SVB India Capital and Kismet Capital.

“The micro-finance sector is isolated from what is happening from the rest of the world and also the domestic down turn, as it caters to a different class of people. Since it comes under the priority-lending sector and the fact that the credit history has been good, the private equity players are interested in the segment, chief executive officer of Venture Intelligence Arun Natrajan said. (more…)

Posted on April 2, 2009 - by Gavin

MICRO finance meets small producers in Sri lanka…

Daily Mirror

A Fair Trade Project for Organic Cocoa

The counatry’s first-of-its-kind Cocoa Processing Centre was established in the rural village of Ulpotha in Matale recently, under Etimos Lanka (Pvt) Ltd’s innovative project “Micro Finance Meets Small Producers In Sri Lanka”.

Etimos Lanka (Pvt) Ltd., a BOI approved company which began operations in 2007, was created to facilitate the services offered by Consorzio Etimos s.c.,  an Italian based  financial consortium that supports and sustains micro businesses and micro financing programs in developing countries across the world. Consorzio Etimos s.c.,  which has a strong presence in Asia, Africa, South America and Eastern Europe came to the country subsequent to the Tsunami in 2004 and supported affected families to get back to their livelihoods  through micro financing, thanks to the support of Dipartimento Italiano della Protezione Civile (Italian Civil Protection).

Etimos Lanka (Pvt) Ltd.,  was founded to continue the activities in Sri Lanka in strengthening the capacity of  Microfinance institutions and co-operatives of producers.  The company engages in loan monitoring, appraising of new loans, developing partnerships with other stakeholders, expanding the reach of micro finance among small producers and identifying investment opportunities. (more…)

Posted on March 31, 2009 - by Gavin

State seeks partners for farm credit scheme…

The Business Daily

Kenya: The government has invited commercial banks and micro-finance institutions to partner with it in the creation of a new agricultural financing kitty to be known as the Agriculture Development Fund in an effort to boost food production.

Agriculture minister, Mr William Ruto, said the fund, which will be unveiled in June, will be used to supplement financing to farmers already provided by the Agricultural Finance Corporation (AFC).

AFC is the only exclusive farmers financing body that gives loans at subsided interest rates. But the State-owned corporation has been unable to meet the farmers’ financing needs due to increased demands mainly from small-holder farmers and its weak financial base, stemming from high default rates.

The minister said technical officers were currently working on the details to come up with the bill to form the new fund.

The government will allocate undisclosed amount of money to the new fund during the 2009/10 financial year. (more…)

Posted on March 12, 2009 - by Gavin

First Global launches pioneering micro-finance programme…

Daily Mirror

First Global Investments Holdings (FGIH) recently launched its Islamic Micro-Finance programme which was targeted at alleviating poverty in the suburbs of Colombo. There were a total of 24 beneficiaries selected from destitute communities in Maradana, Slave Island, Kirulapone and Dehiwala. This pioneering micro-finance programme is based on the principle of Murabaha or cost plus mark-up where the beneficiaries are supplied commodities by FGIH at cost plus a nominal mark-up which they would have to repay in monthly installments.Muhammad Ikram Thowfeek, Managing Director, First Global Group, speaking at a ceremony held to hand over the microfinance passbook and commodities to the beneficiaries at the First Global Knowledge Centre, delved on the importance of Islamic Microfinance.

He stressed on making the project a continuous one which should reach a wider range of beneficiaries in the near future. He also highlighted the fact that Islamic Banking is not only for the Muslims but for all mankind, where dealings are done in an ethical and socially responsible manner. (more…)

Posted on March 10, 2009 - by Gavin

Efficiency of micro-finance activities improved…

Vietnam Business Finance

VNBusinessNews – The State Bank of Vietnam (SBV) and relevant agencies have given their backing to a proposal to change the status of organisations involved in semiofficial micro-financial activities into officially recognised legal entities to help raise more funds for hunger eradication projects.

Semiofficial micro-financial activities are usually included in projects that are sponsored by non-governmental organisations or mass organisations, funded with budget capital or member contributions. These projects are considered successful in approaching poor customers.

The Vietnam Microfinance Working Group of the Viet Nam Union of Friendship Organisations hosted a seminar to assess these activities on Feb. 26.

Deputy Head of the SBV Banks Department Truong Ngoc said that despite the advantages to the customer, compared with other financial organisations, the market share of semiofficial micro-finance activities is just 5-6 percent of the total value of organisations involved in micro-finance activities for the poor.

“If these organisations are changed into those with legal entity status to operate under the Business Law, they will be equal with the others in mobilising capital in the market to give better help to the poor,” Anh said. The SBV has received three applications from organisations that want their status changed into micro-finance organisations, he added (more…)

Posted on February 4, 2009 - by Gavin

Valuing Equity Investments in Microfinance: CGAP and J.P. Morgan Establish First Ever Microfinance Equity Investment Benchmarks…

Washington, United States,  February 03, 2009  –  Though equity investment in microfinance is a small market niche, it’s growing fast. But just what criteria are investors using to make their decisions? Both investors and microfinance institutions (MFIs) need reliable and accessible market references to improve equity pricing; yet, information on microfinance valuation is scarce, and private data are hard to access. Indeed, little research has been done on microfinance equity valuation – until now.
CGAP and JP Morgan have teamed up to tackle the challenge of valuing equity investments in microfinance – and the result is the first ever set of benchmarks for the valuation of microfinance equity… [click here to read the rest of this article...]