Microfinance News Synopsis: MFIs as engine of inclusive growth

Microfinance Focus, June 29, 2010: Microfinance News Synopsis brings a compilation of industry headlines broadcasted by other news media from across the world.

MFIs as engine of inclusive growth: For those of us, who have been in microfinance since its origins about 20 years ago, we remember the days when no one paid much attention to us except other colleagues in the development sector. Much has changed in the past two decades and microfinance has evolved into a thriving sector. Today, microfinance even creates newspaper headlines, sometimes adulatory, and at other times sensational. The truth lies somewhere in between. Microfinance is not a panacea which removes poverty in one go, nor is it a new form of money lending to exploit the poor [Economic Times]

SKS plans to lower cost of funds: SKS Microfinance is planning to raise resources via financial instruments such as commercial papers and non-convertible debentures to bring down its cost of funds by 100 to 200 basis points. Lower cost of funds for SKS can translate into the average borrowing cost for customers coming down to 26.3-27.3 per cent from 28.3 per cent now, said a top official. SKS distributes small loans that begin at Rs 2,000 to Rs 12,000 to poor women so they can start and expand simple businesses . These women are generally engaged in micro-enterprises ranging from raising cows and goats in order to sell their milk, to opening a village tea stall. The company uses the group lending model where women guarantee each other’s loans. “Whenever we have attained a critical mass, we have brought down the borrowing costs [Hindu Business Line]

Vittana Streamlines Microfinance Service: Vittana, a non-profit micro-finance lending service which provides education funding, is now enabling lenders to re-lend directly. Lenders on the service now no longer need to go through PayPal directly for each payment and re-payment. CEO Kushal Chakrabarti said no June 12th, “Today, I have the honor of announcing that, as of last week, Vittana lenders had given over 200,000 US$ in loans to hundreds of young people who want to become engineers, policemen, biologists and much more.” Vitanna is closer to the business model of Kiva than the commercial peer to peer lending companies such as Prosper.com and Lending Club. Vitanna aims to “enabling students around the world to get access to higher education for the first time.” The company says that student loans do not exist in most parts [American Banking News]

Suisse Bank, ACBS Offer N1b Loan to Microfinance Banks: Nigerian micro-finance banks can now get as much as N1 billion loan to finance small scale businesses in the country through a new partnership between the Suisse Bank Plc of London,Smart Links Limited of Dubai and the African Capital and Business Support Limited. The loan being offered by the partnership is interest free for the first one year and subject to repayment in four years thereafter,the Vice Chairman of ACBS,Benjamin Aduli said yesterday in Abuja. Aduli,speaking at a BusinessDay,ACBS Microfinance Banks workshop, gave some conditions under which the nation’s microfinance banks [Leadership]

© 2010, Microfinance News. All rights reserved. 2008-09

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