You are currently browsing the monthly archive for November 2009.
> Posted by Kelley Mesa
This month’s ProInspire Spotlight features ACCION International’s Amitabh Saxena, whose recent work focuses on alternative delivery channels for microfinance institutions. Read the interview here.
>Posted by Robin Ratcliffe
I am writing at the end of Day One of the VIII National Conference on Microfinance organized in Moscow by the Russian Microfinance Center. Inaugurated last night by Princess Maxima of The Netherlands (who is the UN Secretary General’s Special Advocate for Financing for Development) and Professor Mohammed Yunus, along with a number of representatives of the Russian Ministries of Finance and the Economy, the conference brings together some 400 microfinance players from across Russia.
As the director of The Smart Campaign I’ve been invited to moderate a panel on Consumer Protection in Microfinance, a topic that I am not quite sure is so much on the minds of those in the Russian setting as it is in so many other parts of the world. Why? The sector is very young (10 years at most) and reaches just 600,000 clients. Much of the activity is dominated by small business lending carried out by national and regional government development funds at prime plus 1% at most.
>Posted by Amanda Powell
The Consumer Protection Library is now available in Spanish. The library is an effort to create an overview of the legal and regulatory frameworks for consumer protection in each country as well as a description of the banking associations and microfinance networks.
> Posted by Sergio Guzmán
Credit: El Nuevo Diario, http://impreso.elnuevodiario.com.ni/2009/09/ 08/nacionales/109207
The microfinance industry in Nicaragua is under siege by a politically motivated group of borrowers who call themselves the No Payment Movement (Moviemiento No Pago). The Movimiento No Pago includes from 3,000 to 5,000 producers, merchants and microentrepreneurs who are led by the former mayor of Jalapa Omar Vílchez. The movement commenced in Jalapa in the summer of 2008, with the takeover of an MFI and a riot incited by a protest speech.
Recently, the leaders of the movement have demanded that the Congress approve a Moratorium Law to give debtors a 10 year amortization period with interest rates that do not exceed 8 percent APR as a condition to stop harassment of the microfinance industry. The leaders of the Movimiento No Pago from the North and Caribbean regions of Nicaragua have threatened to burn the buildings of MFIs, take hostage MFI personnel and escalate their violence if their demands for a moratorium law are not met.
Credit: El Observador Económico http://www.elobservadoreconomico.com/ articulo/933
There has been important opposition to this moratorium law from many sectors. Several newspaper editorials and articles speak against the moratorium bill, which has not yet moved toward legislative action. The law was sent back to the economic committee of the National Assembly and Awaits review.
According to one journalist, “Before erasing two decades of investment and progress with a vote, the National Assembly should investigate how microfinance operates and the reasons for its high costs as well as its social and economic impact as well as its clients’ satisfaction. A law that rewards clientele without willingness to pay and punishes honest and punctual clients, will incentivize a non-payment culture at a loss for all of the social stakeholders involved, including the banking system.” Read the rest of this entry »
> Posted by Cara Forster
How do MFIs implement client protection principles? Until now, we have only been able to guess at the answer to this important question. But thanks to the MIX, we now have some preliminary data, giving us a first glimpse of what is going on inside MFIs.
The MIX is testing its Social Performance reporting framework, a self-reporting survey covering various social performance issues. Question 8 of the survey focuses on client protection, and is based upon the Six Principles of Client Protection of The Smart Campaign. The MIX has received responses from over 200 MFIs so far, but has only processed and posted publically the results from the first 53 MFIs. The information in this post is based on an analysis of these first 53 institutions, which represent 29 countries and about 10 million total borrowers.
1. Nearly all of the surveyed MFIs have multiple strategies for avoiding client over-indebtedness.
- 91 percent of MFIs evaluate repayment capacity and 85 percent have explicit written guidance on borrower debt thresholds. A majority (57 percent) obtain information on existing client debt levels.
- Almost 40 percent of the MFIs reported on the percentage of their borrowers who also borrow from other financial institutions. Among the countries with a high incidence of multiple borrowing were Read the rest of this entry »
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