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Financial Sector Development Fund to focus on microfinance, access to finance: ADB

Microfinance Focus — Mon, 08 Mar 2010 15:36:13 +0000

By Asma Azmi

Microfinance Focus, March 8, 2010: The Asian Development Bank (ADB) has reiterated that the Financial Sector Development Partnership Fund will focus both on access to finance and microfinance areas, which are essential to its overall strategy to achieve financial infrastructure and capacity building, besides technical assistance to developing countries in Asia.

The Financial Sector Development Partnership Fund of ADB has raised $1.56 million in funding from the government of Luxembourg recently, in addition to $2.2 committed in 2006 when the fund was set up. The latest contribution – its fourth – raises Luxembourg’s total assistance to the ADB-administered fund to $3.85 million equivalent.

ADB has plans to expand the fund into a multi-donor facility for which all developing member countries of ADB are eligible. Interested financing partners will be approached later on this year, ADB officials informed Microfinance Focus. When contacted, ADB has emphasized that access to finance and microfinance will be among the high priority areas.

The interventions would be focused, selective and confined to areas where ADB and staff can show comparative advantage over other development partners.Financial sector development is one of the five Pillars in ADBs Long Term Strategy 2020. The overall impact through ADB’s financial sector support would aim at ensuring better access to finance by unprivileged groups; improved financial social services; and better financial market governance.

Technical assistance inputs, advisory work and capacity building activities will become an essential ingredient in ADB’s future support to the sector, especially where the overall goals of inclusive growth and poverty reduction can be enhanced.

In 2006, ADB established the Multi-donor Finance Sector Development Partnership Fund to finance Technical Assistance operations, components of investment projects, and stand-alone grant-financed activities. It was set up as a multi-donor fund so that other donors can join in future.

“The past and present generous support from Luxembourg will help continue our current technical assistance work plans and pave the way to an expanded fund supported by the ADB donor community,” said Tadashi Kondo, Head of ADB’s Office of Co-financing Operations.

The overall impact through ADB’s financial sector support would aim at ensuring better access to finance by unprivileged groups, improved financial social services and better financial market governance. The initial phase of the fund has been successful and funds are fully committed.

Activities supported by the Fund include: Strengthening of the Pension System in Mongolia; Reform of State-owned Enterprises and Facilitation of Corporate Governance in Vietnam; Financial Sector Program Implementation in Cambodia; Strengthening of Regulation and Governance in Indonesia. The fund has raised a commitment of $3,370,000 from ADB, DMC governments and the Korean government.

Demand is growing for grant financing to support financial sector activities in ADB’s DMCs, particularly in the light of the financial and economic crises. A recent in-house survey among Regional and Private Sector Operations Departments has shown an initial demand of nearly $30 million for financial sector TA supporting the annual business plans between the years 2009-11.

ADB is currently planning to expand the Fund into a multi-donor financial sector TA, advisory and capacity building Trust Fund. The Fund would have an option to be developed into a Financing Partnerships Facility (FPF) in line with the similar existing ones in the water and clean energy sectors. The initial target for the size of the Fund would be $ 30-40 million and would depend on the eventual donor interest.

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Water.org workshop in Chennai to focus on innovative water credits

Microfinance Focus — Mon, 08 Mar 2010 12:50:33 +0000

Microfinance Focus, March 8, 2010: Water.org, a nonprofit organization active in Africa, South Asia, and Central America providing access to safe water and sanitation, is organizing a National level forum on WaterCredit in Chennai on March 26, 2010.

The Forum aims at sharing the successes, ideas and lessons of WaterCredit with microfinance, in order to promote additional financial innovation in the watsan space, connect current and future partner organizations, and widen its beneficiary base.

The Forum is expected to have attendance from banks, MFIs and WSH NGO WaterCredit partners, potential MFI partners, development banks, microfinance service providers and private venture capitalists.

Co-founded by Matt Damon and Gary White, Water.org works with local partners to deliver innovative solutions for long-term success in providing safe water and sanitation to the poor and low-income people.

WaterCredit currently operates in India, Bangladesh, Kenya and Uganda, and has partnerships with non-profit MFIs, for-profit MFIs, and non-profit watsan NGOs. In India, Water.org has been working with MFIs/NGOs on WaterCredit since 2004.

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Janalakshmi microfinance NBFC raises $10 million in second round

Microfinance Focus — Mon, 08 Mar 2010 09:19:32 +0000

Microfinance Focus, March 8, 2010: Bangalore-based Janalakshmi Microfinance NBFC has announced the closure of fundrasing for its Series B amounting to $10 million. The fund was subscribed by Treeline Asia Master Fund (Singapore), Bellwether Microfinance Fund, Narayan Ramachandran, former J.P. Morgan head in India have committed the required amount. Grameen Capital India has acted as the sole advisor to the deal.

Janalakshmi is promoted by Ramesh Ramanathan, who returned to India over a decade ago after a successful banking career. Speaking on this transaction, Ramesh said, “It’s a validation of our approach to addressing issues of financial inclusion in a unique social business model, and are especially delighted have Treeline join our investor group. We look forward to executing on our ambitious plans and expand our urban footprint nationwide in the coming 12 months, within the rigorous institutional structure of a social business – doing justice to both aspects of the term.”

Janalakshmi Financial Services, with over 200 years of cumulative banking experience, including R Srinivasan, MD & CEO, a former civil servant with over three decades experience in banking and financial sector with ANZ Grindlays, Fitch Ratings and JP Morgan and VS Radhakrishnan, COO; veteran banker with over 25 years experience with HSBC and ING Vysya Bank.

Janalakshmi, literally means people’s wealth, has embraced market principles while pursuing a social objective. It has a 2-tier structure: a Section-25 not-for-profit holding company called Janalakshmi Social Services – in which all promoter stakes are held. Funds in Janalakshmi Social Services can only be used to address social issues; and a for-profit operating company for investors called Janalakshmi Financial Services, in the form of an NBFC urban microfinance institution (MFI), with the promoter stake held in the not-for-profit entity Janalakshmi Social Services. It is unique and the only MFI in India structured in such a manner, to keep the social mission intact.Related Posts:

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Pakistan’s microfinance bank celebrates International Women’s Day

Microfinance Focus — Mon, 08 Mar 2010 06:11:28 +0000

Microfinance Focus, March 8, 2010: Pakistan’s largest retail microfinance bank Khushhalibank celebrated International Women’s Day on Monday, marking more than 100 years of International Women’s Day observed across the globe in recognition of the economic, political and social empowerment of women.

International Women’s Day, symbolic of women empowerment, solidarity and equality, is celebrated to commemorate women working in the formal and informal sectors despite the numerous cultural and socio-economic challenges encountered in their everyday lives and the courage and perseverance in surmounting these obstacles with determination. It is rooted in the centuries old struggle of women for their rights including the right to participate in society on an equal footing and equal opportunity within the economic domain.

Ghalib Nishtar, President, Khushhalibank, said, “International Women’s Day has provided us with an opportunity to recognize and celebrate the cause of women empowerment, particularly in the context of our country where women comprise nearly half the population. Our own experience within the microfinance sector in Pakistan, which is consistent with Global experience has shown that women entrepreneurs demonstrate greater responsibility in terms of enterprise development.”

The Asian Development Bank Institute based in Tokyo, Japan, which conducted a study on the need for making microfinance Institutions sustainable in order to deliver services to the poor, chose Khushhalibank for analyzing the impact of microfinance Institutions on poverty reduction.

Among other findings the study revealed that access to and participation in the Khushhalibank program increased empowerment of women – the degree to which women’s decisions are taken into account in areas such as child-rearing, participation in community or political activities, and financial matters. The bank’s lending to women clients has enhanced their level of confidence and enabled them to contribute positively to the wellbeing of their families.

Established in 2000, Khushhalibank (KB) is funded by leading international financial institutions as a partnership between public, multinational and private sector commercial financial institutions with a mission is to market financial services tailored for the low income segment in line with international microfinance practices through an extended network operating across the country’s rural and urban areas.Related Posts:

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