Microfinance Focus March 31, 2011: Indian Union Minister for Rural Development and Panchayati Raj, Vilasrao Deshmukh recently addressed the 55th Executive committee meeting of Council for Advancement of People’s Action and Rural Technology (CAPART) on the need to work for innovation in low cost technologies for the welfare of rural masses.

Deshmukh said that the focus should be on reaching out to the people in rural areas with models which are locally appropriate and that CAPART should strive hard to ensure people’s participation and partnership with NGOs for effective implementation of Government’s programs.

“The need of the hour is to strengthen the Regional committees of CAPART so that region specific and local issues can be addressed,” he said.

The Rural Development Minister also highlighted the need to have a convergence of different rural development schemes so that the development works in the villages are sustainable and environment friendly.

The meeting was attended by the likes of Secretary Rural Development, B.K.Sinha, Secretary Drinking Water Supply and Sanitation, Arun Kumar Mishra, DG CAPART, Mohammad Haleem Khan along with the other Senior Officials from CAPART and the M/o Rural Development. Mihir Shah, Member Planning Commission was the Special invitee in the meeting.

CAPART was formed in 1986 through the amalgamation of two agencies namely the ‘Council for Advancement of Rural Technology’ (CART) and People’s Action for Development India (PADI). It is a promoter of rural development in India, assisting over 12,000 voluntary organizations across the country in implementing development initiatives.

Microfinance Media buzz brings a compilation of industry headlines broadcasted by other news media from across the world.

1. CR: MIcrofinance Conference to begin Thursday

The second Colombian Microfinance Congress will begin Thursday March 31, in Santa Marta, Dinero reported Wednesday.Top executives in the microfinance industry from Colombia, the U.S., Spain, Peru and El Salvador will attend the conference which will take place from March 31 to April 1 at the Hotel Irotama in Santa Marta, the capital of the Magdalena department. (Read More) News Published by Columbia Reports

2. Sify: AP govt asks banks to replace MFI loans

Andhra Pradesh chief minister N Kiran Kumar Reddy has asked the bankers to enhance the credit flow to self-help groups (SHGs) to avert the adverse affects of lending by micro finance institutions. (Read More) News Published by Sify

3. PBS: Regulators Crack Down on Microfinance Industry in India

New rules aimed at regulating India’s microfinance industry, whose spectacular growth and near collapse strongly echo the U.S. subprime mortgage crisis, are set to take effect April 1. (Read More) News Published by PBS NewsHour

4. VCCircle: Micro Housing Finance Corporation Raises Rs 19 Cr

Micro Housing Finance Corporation (MHFC), a housing finance company, raised its second round funding to the tune of Rs 19 crore from its main external investors, the Indian Financial Inclusion Fund (IFIF) and the Michael & Susan Dell Foundation. MHFC had raised Rs 6 crore from them during its first round of funding. (Read More) News Published by VCCircle

5. BW: BSP deadline to reclassify OBOs looms

THE CENTRAL bank has reminded banks of an April 15 deadline to reclassify their “other banking offices” (OBOs), otherwise these offices will be classified as regular OBOs that can do only non-transactional activities. (Read More) News Published by BusinessWorld

6. CO: Funds sought for Charlotte micro-credit effort

Is there room in Banktown for a lender willing to finance the dreams of entrepreneurs living below the poverty line? A civic-minded group of local business executives remains $1 million short of its goal to establish a Charlotte version of the world-renowned Grameen Bank of Bangladesh.(Read More) News Published by The Charlotte Observer

7. JP: Bank Mandiri posts Rp 9.2t in profit

State-owned bank Bank Mandiri booked a net profit of Rp 9.2 trillion (US$1 billion) last year, a 28.8 percent increase from Rp 7.2 trillion in the previous year, the bank’s president director says. Bank Mandiri president director Zulkifli Zaini attributed the increase in profit to an increase in net interest income and good loan growth. (Read More) News Published by The Jakarta Post

8. DI: Uduaghan and Dame Jonathan’s endorsement

The gubernatorial landscape being etched in the Delta political firmament is gradually assuming a fait accompli as every passing day endorsements keep pouring in on the imperative and desirability of an Uduaghan second tenure in 2011. (Read More) News Published by Daily Independent

9. FT: Housing plan targets poor

THE emphasis to provide accessible decent and affordable housing with focus on low income groups will continue to be a challenge to the Government given the increasing number of households with very low income levels. (Read More) News Published by The Fiji Times Online

10. FE: Uncovering Grameen Banks interest rate riddle

In last December, Prime Minister Sheikh Hasina, accused Professor Muhammad Yunus of treating Grameen Bank (GB) as his personal property and claimed the group was “sucking blood from the poor”. (Read More) News Published by The Financial Express Bangladesh

Microfinance Focus March 31, 2011: IFC, a member of the World Bank Group, recently signed an agreement with American Life, an insurance company in Brazil, to launch a life insurance product targeting low-income families in the country.

IFC’s advisory services to American Life will start with a business planning effort, followed by a pilot to test and refine the product. The expansion phase is scheduled for 2012. The target market for microinsurance in Brazil is composed of 128 million people whose families earn less than $800 a month. Despite the size of the market, expansion thus far has been modest and has not penetrated low-income populations.

Pedro de Freitas, Head of American Life said, “American Life is a Brazilian insurance company that offers life insurance to niche segments not covered by most large insurance companies. Building a strong presence in the microinsurance space is now among our high priorities.”

IFC’s strategy in Brazil is also aimed to strengthen infrastructure and public services, including health and education, by increasing private sector participation. Other key areas include improving the investment climate, promoting socially and environmentally sustainable practices, helping small businesses join the formal economy, and strengthening private sector competitiveness.

Microfinance Media buzz brings a compilation of industry headlines broadcasted by other news media from across the world.

1. BS: Banks in state lag in financial inclusion

The banking sector in Karnataka is lagging in implementing the Reserve Bank of India’s (RBI) ambitious programme of achieving financial inclusion in all villages with a population of 2,000 and above. The banks in Karnataka, which are in the forefront of implementing the programme, have barely achieved 50 per cent of the target by the end of February, 2011, a top banker said today. (Read More) -News Published by Business Standard

2. GMA News: BSP: Not all banks can issue microinsurance

Not all banks can engage in the business of microinsurance, the Bangko Sentral ng Pilipinas (BSP) said Monday, noting that only “trained and documented” financial institutions should do it. (Read More) -News Published by GMA News

3. stltoday.com: Microfinance documentary “To Catch a Dollar” screens tonight only at Des Peres

“To Catch a Dollar,” a Sundance documentary about the Nobel Prize winner whose is helping to lift people worldwide out of poverty with micro loans, screens toinght only, at 7:30 at Des Peres Cine. (Read More) -News Puiblished by stltoday.com

4. IB: Gold touching lives through micro-finance: WGC

In India gold has stood as an epitome of timeless security. In times of unforeseen difficulties there is an innate tendency among Indians to leverage on gold, accumulated through years. For many families in India, handing down gold in legacy to their daughters in the marriage has been a tradition long established and continues till date. (Read More) -News Published by India Blooms

5. ET: SKS Microfinance completes Rs 550-cr deal with two banks; stock up

Close on the heels of closing Rs 60-crore securitisation deal with a non-banking financial company (NBFC), SKS Microfinance – the largest microfinance institution in the country – has completed another deal worth Rs 550 crore with two banks. (Read More) -News Published by Economic times

6.BD: Licence: Altitude Microfinance Bank meets CBN requirements

Altitude Microfinance Bank is one of the 121 micro finance banks (MFBs) granted provisional approval for new licence by the Central Bank of Nigeria (CBN). (Read More) -News Published by BusinessDay

7. Examiner: Paralympian: Heath’s loan will help 40 families

Paralympian Heath Francis lent $10,000 to underprivileged entrepreneurs in third world countries while saving for a home loan deposit. Mr Francis, 29, is an ambassador for the Good Return organisation which arranges finance for small business ventures like farms and live stock in poverty stricken regions. (Read More) -News Published by Examiner

8. DI: Customers commend Oceanic micro health insurance scheme

Some satisfied holders of Oceanic Micro Savings Account (OMSA), a product being offered by Oceanic Bank International plc have commended the financial institution for enabling them to have access to health insurance schemes across the nation as part of the benefits of opening OMSA accounts. (Read More) -News Published by Daily Independent

9. DNA: SKS securitises Rs550 crore portfolio

As part of its efforts to comply with the debt repayment schedules, despite stress on the portfolio in Andhra Pradesh (AP), microfinance major SKS Microfinance has completed the securitisation of its portfolio worth Rs550 crore. (Read More) -News Published by Daily News Analysis

10. HT: USAID launches NEAT project

US will help Nepal strengthen fiscal and trade policies. The US Agency for International Development (USAID) through Nepal Economic, Agriculture and Trade (NEAT) project will encourage competitiveness and exports, enhance food security and increase access to financial services, said US ambassador Scott H DeLisi at the launch of the NEAT programme here in the Valley today. (Read More) -News Published by Himalayan Times

Microfinance Focus March 31, 2011: IFC, a member of the World Bank Group, is facilitating expansion of microfinance and lending to small and medium-sized companies, including those operating in agribusiness sector, supporting agriculture and economic growth in the country through Armenia’s ACBA-Credit Agricole Bank.

IFC will provide a $20 million loan to ACBA-Credit Agricole Bank, Armenia’s bank by total assets, and a microfinance provider with a focus on the agribusiness sector. IFC’s loan will enable the bank to provide its clients more term financing, which has become scarce as a result of the recent financial crisis. The financing will directly benefit farmers and small companies in the vulnerable agribusiness sector.

Stepan Gishyan, CEO of ACBA-Credit Agricole Bank said, “This new loan from IFC will enhance our market position and will enable us to further develop our strategy in lending to micro, small and medium-sized businesses, particularly in the agricultural sector. We are sure that such lending is one of the main factors for economic development and we are pleased that IFC cooperates with us in this field.”

IFC partnered with ACBA Credit Agricole Bank in 2003 to establish ACBA Leasing, the first leasing company in Armenia. It also invested equity and provided a long-term senior loan to help establish capital for ACBA Leasing. In 2010, IFC provided another $3 million loan to ACBA Leasing to help provide leasing of capital goods to small and medium enterprises.

ACBA-Credit Agricole Bank was established in 1995 in the scope of EU’s TACIS project. The Bank is an important player in the Armenian banking system and ranked first in terms of total assets, loans, capital, as well as implementation and development of innovative technologies.

Microfinance Focus March 30, 2011: Dia Vikas, a social investor for the microfinance in India today invested Rs 130 million in BWDA Finance Ltd (BFL). The investment comprises of Rs 65 million in equity support and Rs. 65 million as subordinated debt.

Dia Vikas also invested Rs 60 million in RGVN (NE) with Rs 30 million as equity and Rs 30 million as Tier-II debt. Dia Vikas also announced fresh investments of Rs 38.5 million in EMFIL taking its total equity exposure to Rs 114.3 million and Rs 50 million in Cashpor taking its total subordinated debt exposure to Rs 150 million.

K. C. Ranjani, Managing Director, Dia Vikas, said, “The microfinance sector in India is going through a difficult phase with funds for smaller microfinance institutions (MFIs) working in backward areas of the country drying up.  Dia partners closely with small and medium MFIs whose relentless work caters to uplift the downtrodden.”

She added, “BFL, Cashpor, ESAF and RGVN (NE) complement our thought process and commitment to serve people in the backward areas of India.The fresh round of investment will help all of them to march ahead with their commitments to the people of the areas they are actively working.”

The investments will enable its partners to continue to provide much needed loans to the poor in the underserved regions of Assam, Arunachal Pradesh, Andaman, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Kerala, Maharashtra, M.P., Meghalaya, Tamil Nadu, Uttar Pradesh and slums of Delhi NCR and Mumbai.

BFL is a Tamil Nadu based MFI, that works for underprivileged communities in the state alongside its development wing, The Bullockcart Workers Development Association, (BWDA).

Headquartered in Guwahati RGVN (NE), operates in north-eastern regions of India.  It started its microfinance journey over a decade ago and is on its way to expand into all the seven North Eastern States. It currently operates in Assam, Arunachal Pradesh and Meghalaya.

EMFIL is an MFI operating in the states of Kerala, Tamil Nadu, Maharashtra, Chhattisgarh, Madhya Pradesh and Delhi NCR. EMFIL and its associate institutions provide various credit plus services to their members who include business development services, skill training, production and marketing support etc.

Cashpor Micro Credit (Cashpor) is a socially focused MFI in India and has been operating as a Section 25 Company for more than a decade with outreach in 15 backward districts of eastern Uttar Pradesh and western Bihar.

Dia Vikas was established in 2008 as a social investor to support the growth of Indian microfinance and encourage the development of start-up operations in underserved areas with primary objective of reduction in poverty rather than financial return.

By Peter van Dijk, BSD City, Indonesia

Microfinance Focus, March 30, 2011: The popular uprisings that have engulfed North Africa and the Middle East started by a desperate individual act in Tunisia. Mr. Muhammad Bouazizi was a young man with no alternative in life then to sell fruit from his cart. As he did not have a license to do that the police upend his cart and spit in his face. Out of desperation he burned himself to death.

Tunisia was ruled long by the dictator Ben Ali who many called “enlightened”. Many foreigners, in the region and further away, supported him. They also copied his Presidential Microcredit Fund. The supporters copied whilst not being interested in the facts of continuing very high unemployment, especially for young people, and widespread corruption, especially by the presidential family.

And there lies the sadness of Microfinance still being dominated by Microcredit as an act that on its own will never change poverty or in other ways help transform a country into an inclusive social democracy in a sustainable manner. Poverty and dictatorship (by one person or by a minority of wealthy people) are complex challenges to overcome but it is easy to understand that credits from the wealthy to the poor are a clever way to maintain the dictator(s) in power. Maybe even Mr. Bouazizi was once happy when receiving a microloan and maybe a picture of his smiling face hangs on the walls of a micro-credit supporter in New York, Washington or Paris.

Only when citizens agree that no one should be in absolute poverty (no sustained access to food, water, shelter, health services, security, education, transport etc.) and that they develop a culture in which being too wealthy is embarrassing (in modern terms, where the Gini Coefficient is too high), is there a chance for building inclusive societies.

The teachings of another Tunisian come to mind, those of the historian and maybe world’s first economist Ibn Khaldun.  In 1377 AC he finished his book Al-Muqadimma. In this book Mr. Khaldun combines his knowledge about the history of many (mainly Mediterranean) countries and peoples with his understanding of agriculture and economic development. With their Work, Ibn Khaldun explains in Chapter V “Al-Ma-ash” (how to make subsistence: about profit and jobs), people produce Profit (“Kash” or “Makasih” in Arabic), which provides for their livelihoods (subsistence, “Rizq”). Money functions as a valuation of the results of work but needs to add that the quantity of what that money can purchase is also influenced by market fluctuations. He then continues from this firm basis that stability in a society is essential to allow such specialization and intermediation; in which everyone can earn for his (and her) livelihood. Prudent use of profits include investing in education and culture, which will develop and enhance further sustained inclusive growth. On the other end, the wise Tunisian explains that if work disappears, profit will also and, subsequently, people will leave such societies.

Ibn Khaldun succinctly and strongly argues that money is a matter, a good, (minerals as he calls it, “gold and silver”) that only functions in real inter-play in a society where the economy produces the means to live and prosper. People who are better educated and civilized, meaning able to read well and appreciate other art forms, will also work for the sustenance of such inclusive society. Only the social revolutions in Europe (18th and 19th century) so far demonstrated that the dictatorship of wealth and the objective of profit on its own is not sustainable for a society. I hope that the popular revolt of Arabic peoples will be understood as a clear protest against the paradigm of “Getting rich quick or die trying” that the USA promotes and that drives the growth in the BRIC countries (Brazil, Russia, India, China) and that also seems to inspire the wealthy in Asia, Africa and Latin America and that buys off the poor with motor bikes and mobile telephones.

I see it as my task to advocate that the true potential of Microfinance lies in its power to provide all citizens with legally enforceable access and use of basic financial services (I am thus certainly not defending that “Credit is a Human Right”). With other technical support services to train people in jobs, to create and sustain businesses and to support macro-economic development (meaning also that Microcredit do obviously not as such support education, business or macro-economic development), an inclusive financial sector will support poverty eradication. And, finally, as I referred to Khaldun’s words, politicians, academics and artists are needed to bring changes in paradigms on economic growth, enterprise development, education and on Microfinance.

Microfinance Focus March 30, 2011: USAID and Walmart recently signed an agreement to support small rural farmers in Central America and to connect them to the retailer’s regional and international supply chains.

The funding for the three-year agreement comes from USAID, Walmart, the Walmart Foundation, NGO partners, national governments, and other private sector partners.

The new partnership will link Feed the Future, the U.S. government’s global hunger and food security initiative, with Walmart’s Global Sustainable Agriculture Goals. Small rural farmers in Central America will earn more from their fresh fruit and vegetable production, which will help them climb out of poverty and consumers will benefit from greater access to locally-grown produce.

Mark Feierstein, USAID’s Assistant Administrator in the Bureau for Latin America and the Caribbean said, “Public-private partnerships like this one are crucial to USAID’s long-term food security and job creation objectives in Central America. Through these alliances, USAID leverages its resources; our private sector partners meet core business goals; and the rural poor improve their livelihoods”

Walmart’s Global Sustainable Agriculture Goals were announced in October 2010 and focus on three broad areas, supporting farmers and their communities, producing more food with less waste, and sustainably sourcing key agricultural products.

USAID is an independent federal government agency that receives foreign policy guidance from the Secretary of State. It provide assistance in five regions of the world namely Sub-Saharan Africa; Asia; Latin America and the Caribbean, Europe and Eurasia; and The Middle East.

Walmart and the Walmart Foundation supports hunger relief projects which is an integral part of the Foundation’s work. Through financial contributions, in-kind donations and volunteerism, the Walmart Foundation supports initiatives focused on providing opportunities in education workforce development / economic opportunity, environmental sustainability, health and wellness.

Microfinance Focus March 30, 2011: On March 31, 2011 after the film screening of Gayle Ferraro’s ‘To Catch a Dollar: Muhammad Yunus Banks on America’ in the United States, audiences will have the opportunity to vote between four candidate cities that will host the future Grameen America branch. Through an online contest, the audiences will vote for any of the cities namely Atlanta, Chicago, Los Angeles and Washington, D.C.

Voting will begin on April 1, and participants will be able to vote once a week (4 times total) until the end of April. The winning city will be announced on Tuesday, May 3.

Grameen America President Vidar Jorgensen said, “While our first priority is to build on our successes in Queens, Brooklyn and Harlem by growing in the greater New York area, we also have a branch in Omaha, and will soon open branches in Indianapolis and San Francisco.”

He added, “Atlanta, Chicago, Los Angeles and Washington, D.C. are all important cities with a large and growing number of people who need the services of Grameen America.  It will be exciting to see which city our community selects.”

Dr. Muhammad Yunus, known as the ‘father of modern microfinance,’ is a Bangladeshi economist and founder of the Grameen Bank, an institution providing microcredit to help its clients establish creditworthiness and financial self-sufficiency. Dr. Yunus is also a 2006 recipient of the Nobel Prize for Peace.