Archive for the ‘Featured News’ Category

By Sanjay Sinha ,Managing Director, Micro-Credit Ratings International Limited (M-CRIL) Microfinance Focus , Nov. 02 , 2010 : The ongoing microfinance crisis results from a combination of promoter hubris and observer envy.  In terms of aggregate client numbers, microfinance in India has grown at close to 100 percent per annum over the past 3 years to reach around 30 million client accounts today.  Competition has ... Full story

Microfinance Focus, Oct 28, 2010: Microfinance Focus has obtained a report prepared by the Gender Unit of SERP (Society for Elimination of Rural Poverty), listing the victims of microfinance institutions in Andhra Pradesh. Out of the 123 alleged cases of harassment that the report lists out, there are 54 death cases.  According to the list, some of largest microfinance institutions are alleged in most of ... Full story

Microfinance Focus, Oct 27, 2010: As microfinance institutions are expected to increasingly approach the public stock markets to raise equity capital, the Wall Street Advisory Services (WSAS) have issued a new report on listed MFIs ‘Stocks’ Performance and Implications for Shareholder Valuations. The report looks at the share price performance for 4 major listed MFIs – Compartamos and Financiera Independencia from Mexico, Equity Bank from Kenya, ... Full story

Microfinance Focus, Oct. 23, 2010 : A year ago, Microfinance Focus Senior Analyst, Daniel Rozas, published an article raising a warning flag about a developing bubble in Andhra Pradesh.  Rozas wrote: “The spark that sets off a large-scale delinquency crisis can be anything and could come at any time – a rapid drop in economic growth, a populist political movement, a religious decree, or ... Full story

By N. Srinivasan, Microfinance Focus , Oct 19, 2010 : The objectives of the ordinance are laudable.  Protection of low income clients from exploitative practices and enhancing levels of transparency are valid public policy objectives of a sovereign government.  High debt levels, multiple operators providing loans as also pressure on repayment rates are legitimate cause for concern.  The remedy being applied does not seem appropriate ... Full story

Microfinance Focus, September 28, 2010: Major Indian banks which constitute the bulk of on-lending funds to the Indian microfinance industry are coming together to create ‘India Microfinance Platform’ - IMFP, as told to Microfinance Focus by industry sources. The platform is expected to come by the second week of October 2010. The need for such a platform was recognized way back in 2006 where in a ... Full story

By Souren Ghosal, Microfinance Focus, September 16, 2010 : There is no doubt that the most popular mandate in developing countries is to outreach poor by creating employment opportunities and providing financial support to the poor through state interventions.  Obviously such intermediation often fail to reach the poor as these intermediaries floated by the state are loaded with bureaucrats and politicians who are more prone to ... Full story

By P N Vasudevan, Managing Director, Equitas Editorial Note: The Reserve Bank of India released a Discussion Paper on “Entry of New Banks in the Private Sector” last month. The paper invited views/comments of banks, non-banking financial institutions, industrial houses, other institutions and the public at large. Suggestions and comments are invited on the following aspects delineated in the Discussion Paper Minimum capital requirements for ... Full story

By Daniel Rozas and Vinod Kothari, Microfinance Focus , August 19, 2010 : Our earlier article on the Hidden Risks behind Microfinance Securitization raised serious concerns about the inherent and largely unrecognized risks embedded in securitizations of microcredit assets.  While we believe that this article provided a useful contribution to microfinance sector, we recognize that it is sometimes easier to be a critic ... Full story

Editorial staff at Microfinance Focus has picked out the best and most interesting read interviews based on number of readings, discussion and feedback. Need to draw a line between microfinance and loan sharking: Prof Muhammad Yunus Sustainability is the key in microfinance: Princess Máxima Creditworthiness of MFIs tops our criteria : ... Full story

Microfinance Focus, Aug 1, 2010: Seeing spectacular performance of SKS Microfinance IPO, other big players in the sector are also gearing up to explore the gains of capital market. Hyderabad based Spandana Sphoorty Financial Ltd, which is ranked 6th in the world and 2nd in India in terms of outreach by Microfinance Information Exchange (MIX), could be next in IPO trail as their Board is ... Full story

By Saleh Khan, Country Director , ASA International, Nigeria This paper explores the typical risks that microfinance institutions (MFIs) face in their operations and outlines some of the steps that ASA, one of the world largest NGO MFI, takes to mitigate them. This discussion is from a practitioner’s perspective and is intended to provide examples of how a typical MFI might respond ... Full story

By Priyanka Jayashankar and Robert Goedegebuure, Microfinance Focus, July 16, 2010 : As a plethora of financial inclusion models emerge across India, vast segments of the Muslim community still remain under-banked. In recent years, a handful of leading financial players have developed Shariah-compliant funds for the Indian market. However, full-fledged Islamic banks are yet to make inroads into the microfinance sector. Many Muslims hail from low ... Full story

By Vineet Sukumar, IFMR Capital, Microfinance Focus , July 14, 2010 : In a recent post in Microfinance Focus, Daniel Rozas and Vinod Kothari have argued that microfinance securitisation does not, in reality, separate ‘pool risk’ from ‘originator risk’ and hence should not be rated very differently from the originator of the portfolio. Some of the arguments are well reasoned out such as the lack ... Full story