You are currently browsing the tag archive for the ‘India’ tag.

> Posted by Rishabh Khosla and Vikas Raj, Senior Investment Analyst and Senior Investment Officer, Accion Venture Lab

In May, India’s new government, led by Narendra Modi, was elected in a landslide. Popular frustration with the Congress Party’s increasingly ineffectual 10-year reign, made most visible by persistently low GDP growth, allowed for one of the most lopsided victories in Indian history, and the first time a non-Congress candidate had an outright majority in parliament. Wisely, Modi focused his election campaign rhetoric on economic issues and more efficient governance to revive GDP growth. The markets have reacted positively: the bell-weather BSE stock-index is up 20 percent since the start of the year. Two weeks ago, the government finally proposed a budget for the next year – the first real concrete recommendations for the economy since coming to power two months ago.

India is a key market for financial inclusion investors like Accion Venture Lab because of the size, depth, and strength of its entrepreneurial pool, as well as the persistent lack of financial services for the poor. Despite the huge success of microfinance in India, two-thirds of the working-age population lacks a bank account, mobile payments have yet to take off, and access to credit for small and medium enterprises (SMEs) remains abysmal.

Read the rest of this entry »

> Posted by Jeffrey Riecke, Communications Associate, CFI

A proactive step for client protection was recently taken in Laos when the country’s Microfinance Association (MFA) established an industry code of conduct focused on client protection. Laos’ code centers on the client protection principles and the accompanying Smart Certification standards, which designate how institutions can instill fair client treatment in their practices. The code was developed by the MFA following a Smart assessor training in late 2013, and was reviewed by the Campaign to ensure accurate reflection of the client protection principles and standards. In April, the code was presented at an MFA member meeting, where all members present committed to embedding it throughout their institutions. This new code fills an important gap, given that client protection regulation for financial services is not well developed in the country.

Established in 2007, the Microfinance Association and its members represent a growing share of the country’s industry. Members include MFIs, as well as donors, training institutes, and individual experts and advocates. The 32 MFIs that are members make up roughly 50 percent of Laos’ formal microfinance industry by number of clients.

Read the rest of this entry »

> Posted by Hema Bansal and Pallavi Sen, the Smart Campaign and MFIN


On June 16th the Microfinance Institutions Network (MFIN) was officially recognized as the Self Regulatory Organization (SRO) for non-bank financial company (NBFC) microfinance institutions in India. With this, MFIN not only became the first network to attain such recognition in India, but also in Asia and perhaps in the world.

An SRO is an organization that has been authorized by a statutory regulator or a government agency to exercise control and regulation on its behalf over certain aspects of an industry. Established in 2009, MFIN is an association of NBFC-MFIs acting as their primary representative body. As an SRO, MFIN will essentially support the RBI in ensuring compliance to regulatory prescriptions and the Industry Code of Conduct.

Subsequent to the Andhra Pradesh crisis, the RBI had instituted a subcommittee of the Central Board of the Reserve Bank under the chairmanship of Shri Y. H. Malegam to study issues and concerns in the microfinance sector in India. The committee submitted its report in January 2011, thereby providing concrete recommendations and guidelines for the creation and recognition of microfinance NBFCs in India. Except for setting in place an SRO, all the other recommendations of the committee were implemented by the RBI in 2012. These other guidelines included establishing a credit bureau, the Guidelines on Fair Practices Code for NBFCs, and additional guidelines on loan size, target clientele, interest rates, transparency, collection practices, and multiple lending. With MFIN recognized as an SRO, the RBI is now implementing the last remaining Malegam Committee recommendation.

Read the rest of this entry »

> Posted by Jeffrey Riecke, Communications Associate, CFI

Last week the Microcredit Summit Campaign released their 2014 State of the Campaign report, sharing insights and exemplary initiatives that support the global goal of resilience for all. Resilience outlines where the microfinance industry stands in its mission to end poverty, and how synergies with other services and sectors, like healthcare, mobile phones, and social relief payments, are key to achieving even greater impact.

Worldwide, 1.2 billion people live in extreme poverty. One in eight people go to bed hungry and one in six children under the age of five are underweight. Every few years between 10 and 30 percent of the poorest households around the world work their way out of poverty, while roughly the same number fall below the poverty line. Several of these statistics, all highlighted in Resilience, come from the 2013 Millennium Development Goals report. In that report, it’s noted that in terms of the MDG to eliminate poverty, the world is about five years ahead of schedule, though of course progress around the world hasn’t been uniform. In one of the regions that has lagged, Sub-Saharan Africa, so too does financial inclusion. About 85 percent of those in the region don’t have a formal savings account, compared to 77 percent of the world’s poor globally. Even fewer individuals have access to formal credit or insurance products.

Nevertheless, the growth numbers of the microfinance industry for the past decade and a half are encouraging. In 1997, global client outreach totaled 13 million. By 2010, it grew to 205 million. After a dip in 2011 resulting from a loss of 15.4 million clients in India, industry outreach rebounded in 2012.

Resilience breaks down these numbers by income level, revealing an important trend. According to the statistics, during the past decade, for the first time the gap between total client outreach and the total number of clients who are among their country’s lowest income group has widened. At first glance, the numbers may be interpreted as suggesting that MFIs have become more interested in serving wealthier clients. The reality, however, is that more MFIs are adopting accurate benchmarking tools for assessing poverty, such as the Progress out of Poverty Index. It turns out, many MFIs’ previous estimates of their outreach to the very poor have been inaccurate – overestimating how effectively they are serving this client segment.

Read the rest of this entry »

> Posted by Eric Zuehlke, Web and Communications Director, CFI 

Budding entrepreneurs, vendors, and everyday people in emerging economies are creating new ways of benefiting from the internet, using their own ingenuity in ways that go beyond the original intended use of many web-based platforms. A recent slideshow from Yiibu, a Scotland-based design and consulting firm, offers a dizzying array of examples of how people use the mobile web to sell and pay for anything you can think of, mostly in Asia along with the Middle East, Africa, and Russia.

The growth in traffic from growing economies is a familiar story (Yiibu mentions that Chinese, Indian, and Russian sites now make up almost half of the Alexa “top 20”). What’s new is how the mobile internet has opened up new ways of doing business for anyone with a smart phone. Individuals, small businesses, and major corporations are selling a jumbled mix of products and services, from cars and iPhones to handmade crafts to travel visa services.

Read the rest of this entry »

> Posted by Jeffrey Riecke, Communications Associate, CFI

As if we needed more motivation to support the expansion of microinsurance, the increase in extreme weather is highlighting the ability of the financial service to spur climate change adaptation.

Farming in developing countries is responsible for 70 percent of the world’s food supply, and farmers in developing countries are vulnerable to the effects of climate change. What will happen to the world’s food and to those making a living from small-scale agriculture when the frequency and intensity of extreme weather arising from climate change take stronger hold?

Read the rest of this entry »

> Posted by Joshua Goldstein, Principal Director for Economic Citizenship & Disability Inclusion, CFI


Last week my colleague Sonja Kelly and Bancomer’s Ruben Marquez highlighted the importance of the cultural contexts of words that are used in financial services (e.g. the impact of using the word for saving instead of keeping in Mexico). This got me thinking about the consequences of the words we use as names for social groups, and where these names originate.

There is a consensus among disabled people in the English-speaking world today that person with disability is the preferred term when describing a member of their community and how they would like the non-disabled to refer to them. A couple of decades ago disabled person was preferred – for example, 1983-1992 was the United Nations Decade of Disabled Persons.

This is not a pedantic fuss over nothing, as it might at first blush seem. It goes right to the heart of establishing a positive identity for a downtrodden minority. The proper term is currently being worked out in Hindi – and perhaps in many other languages around the world – where persons with disabilities are just now insisting on their rights to full participation in civil society.

Read the rest of this entry »

> Posted by Siddhartha Chowdri, Program Manager, Disability Inclusion, India, CFI

How does the microfinance community view persons with disabilities (PWD)? This economically disenfranchised population makes up less than one percent of microfinance clients around the world, leaving the vast majority of PWD excluded. Many PWD would benefit from financial services. Yet even the most intense Google, Bing, or Yahoo search will yield almost no in-depth research into how persons with disabilities are perceived among the leaders and staff of microfinance institutions (MFIs). For my focus country of India, no research at all is related to this topic. We hope that a new CFI paper authored by Vipin Gupta of Credit Suisse, Making Microfinance Accessible to Persons with Disabilities: Awareness and Attitudes Among Indian Microfinance Institutions, will be the starting point for more research and action in this area.

Annapurna Staff Members and v-shesh Researcher with Focus Group Discussion Participants, Odisha

Over the last two years CFI has been working with three leading Indian MFIs – Equitas, ESAF, and Annapurna – to refine and develop tools that institutions across the world can use to make themselves more accessible to PWD. CFI also partnered with v-shesh, an India-based social enterprise with expertise in disability inclusion. At the start of this work, CFI and v-shesh decided to conduct research on the existing environments at these MFIs. The purpose of this research was two-fold:

  1. Learn which areas related to disability inclusion should be emphasized during the planned trainings and accessibility audits.
  2. Establish a baseline understanding of the existing views of disability inclusion at the MFIs for subsequent monitoring of changes.

Last November, the v-shesh team surveyed hundreds of MFI staff at all levels as well as MFI clients – both with disabilities and without. They also conducted intensive focus group discussions to gather additional qualitative information to prepare for the trainings.

Read the rest of this entry »

> Posted by Hema Bansal, India Director, the Smart Campaign

As a child growing up in India, I was always intrigued by stories from Myanmar, but disturbed by conflicts that it had witnessed. Not knowing much about the country, as an adult I still had an innate desire to visit. On May 7th and 8th, I attended the Responsible Finance Seminar, organized by Entrepreneurs du Monde (EDM), held in Myanmar’s city of Yangon. I was completely awed by the mystical peace of the city, I was also impressed by the demonstrations of support at the seminar for instilling client protection in Myanmar’s microfinance industry. It’s a great opportunity for a young market to secure responsible practices from its outset.

Myanmar, the second-largest country in Southeast Asia, remains one of its poorest. Decades of isolation have severely affected its development. In terms of financial inclusion, a large proportion of the population in Myanmar relies on informal lenders. The formal sector only serves about 20 percent of the population, largely because of the existing financial institutions’ limited capability.

In May 2011, President Thein Sein publicly recognized microfinance as a means of development by enabling local and foreign investors to establish fully privately-owned MFIs. Since the rationalization of licensing in Myanmar, around 110 MFIs have been registered. Deposit-taking institutions have been allowed to set-up shop rather easily due to low minimum capital requirements and the absence of separate prudential regulations from non-deposit-taking institutions, such as rules pertaining to reporting standards and portfolio quality management.

Read the rest of this entry »

> Posted by Joshua Goldstein, Principal Director for Economic Citizenship & Disability Inclusion, CFI

It has always been my unexamined belief that as economies mature the so called “informal sector” will shrink and with it the microfinance market. Sometimes unexamined beliefs based on instinct or intuition turn out to be right when subject to a fact-rich inquiry. But not this time. Upon investigating I uncovered growth trends in the informal sector and in urbanization, suggesting a refocusing for microfinance.

The informal sector is growing everywhere in the world. This segment of the economy, though its definition varies, includes activities of the working poor that are unrecognized, unrecorded, unprotected, or unregulated by public authorities. In more developed countries, also considered part of the informal economy are employment positions that have tenuous connections between the worker and formal structures and few, if any, labor rights or benefits. Globally, estimates for the total informal economy vary between 50 and 60 percent of the world’s population. According to Gallup’s 2012 World Survey, only about 40 percent of adults around the world, across all countries and income groups, have a fixed income for over 30 hours per week.

Read the rest of this entry »

Enter your email

Join 1,102 other followers

Visit the CFI Website

Twitter Updates

Archives

Founding Sponsor


Credit Suisse is a founding sponsor of the Center for Financial Inclusion. The Credit Suisse Group Foundation looks to its philanthropic partners to foster research, innovation and constructive dialogue in order to spread best practices and develop new solutions for financial inclusion.

Note

The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.
Follow

Get every new post delivered to your Inbox.

Join 1,102 other followers