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> Posted by Elisabeth Rhyne
The dialogue goes on about IPOs in microfinance – even before the much-anticipated SKS IPO. In today’s Forbes article, two of the strongest proponents of IPOs make their case…
Microfinance Goes Public – How capital markets can help fight poverty.
By Michael Schlein and Michael ChuIndia’s largest microfinance institution, SKS, recently filed a draft prospectus to sell shares on the India stock exchange in an initial public offering. This IPO will be an historic milestone for the poor in India and beyond, opening the door to assisting them on a scale never seen before in this region.
Microfinance’s journey from non-profit into the heart of capitalism is a hot topic these days, and this IPO will be no exception. Specialized media, the business sector, the development community, philanthropy and the microfinance industry–all will debate the ramifications of this event… Read more >
> Posted by Kelley Mesa
In the latest Energy Links Podcast Paul Rippey interviews Dipal Barua. Dipal was the Founding Managing Director of Grameen Shakti and remains a leader in partnering with microfinance networks for the distribution of clean energy products. He was the recipient of the first Zayed Future Energy Prize, given in 2009, and has recently founded a new company, Bright Green Energy Foundation (www.greenenergybd.com). In this podcast, he shares his ideas on how Bangladesh can become a “solar nation”!
Listen to the podcast »
> Posted by Kanika Metre
Recently, a friend of mine recommended that I read Dambisa Moyo’s book Dead Aid: Why Aid is Not Working and How There is a Better Way for Africa. This provocative New York Times bestseller, argues that aid (specifically government-to-government aid) has been an unsuccessful development tactic in Africa and has in fact, been detrimental to economic growth in Sub-Saharan African countries.
Whether you agree with Moyo or not, the book provides significant insights about why Africa has lagged behind Asia and Latin America, and her recommendations for pulling Africa out of poverty are well thought out. Though her dominant focus is on the necessity of changing trade policies and increasing foreign direct investment, she also makes a point of highlighting microfinance, which she calls “a powerful development tool” in her chapter on “Banking the Unbankable.”
> Posted by Kelley Mesa
Elisabeth Rhyne shares her “Lessons for Microfinance” in today’s Huffington Post…
Lately the microfinance industry has come under a lot of scrutiny, but media coverage doesn’t reveal the full picture. A recent New York Times article painted microfinance an industry overrun by big banks that charge eye-popping interest rates.First, a couple of misperceptions have to be cleared up. Yes, interest rates on microloans are higher than on conventional loans, but the trend is actually down, not up. For the past decade average rates around the world have been falling. They need to continue in that direction to make credit more affordable to more clients. Second, it is not the so-called banking giants that dominate the field. The players making the biggest impact are dedicated microfinance institutions (MFIs) that started out as non-profits with a strong social mission and become regulated financial institutions or banks so they could scale up to carry their mission to more people… Read more »
> Posted by Robin Ratcliffe
In my conversations with microfinance professionals around the world, I can tell it’s now pretty clear there is a deep understanding and yearning in the industry for the incorporation of Smart Microfinance into MFI practices. The top questions MFI staff now have are “where?” and “how?”
Enter The Smart Campaign’s Tools & Resources Library…
The purpose of the Tools & Resources Library is to provide microfinance professionals with the tools they need to turn Principles into Practice within their institutions and organizations. I am really pleased to introduce our latest addition to the library—
Smart Lending: Client Protection in the Credit Process—a veritable roadmap for MFI staff to incorporate client protection practices across the entire loan cycle.
The new Smart Lending tool was developed jointly by a technical team from the Campaign and ACCION Global Programs. The team dissected the entire credit process for individual loans from the moment of first contact with the client until final collection, and identified every instance in that process in which one or more of the Client Protection Principles comes into play. Read the rest of this entry »
> Posted by Sergio Guzmán
I just returned from a trip to Nairobi, Kenya, where I participated in the Africa-Middle East Regional Microcredit Summit. You can read more about the conference from Robin Ratcliffe’s post, here. We took advantage of the confluence there would be for the summit to organize a Smart Certified Assessors Training.
We had a total of 12 participants in the training with very diverse backgrounds and organizations. It was a mix between, networks, support organizations, investors and MFIs. The training provided participants from Europe, Africa and the Middle East with a “deep dive” into the Client Protection Principles and walked them through the steps required for the completion of a five-day client protection assessment.
Newly minted Smart Certified Assessors
The two-day training program was facilitated by well-known microfinance expert Larry Reed and assisted by Hema Bansal who leads Smart Campaign activities in India. The next step for the participants is to accompany an experienced assessor on an assessment, after which they will be fully certified to conduct Smart assessments on their own.
So, congratulations newly trained Smart Assessors! This event was the first of what will be a series of assessor trainings over the coming months. Stay tuned for information about trainings coming to your region.
> Posted by Kanika Metre
Photo Credit: SIMON MAINA/AFP/ Getty Images
Last week at the Africa-Middle East Regional Microcredit Summit in Nairobi, we were happy to hear the UN Secretary-General’s Special Advocate for Inclusive Finance for Development, Princess Maxima of the Netherlands, highlight client protection as one of the top three priorities for the future of inclusive finance. Here is an excerpt from her speech at the Summit opening:
“The third priority is client protection. Of course, more than 700 MFIs, associations, investors and individuals have already endorsed the Client Protection Principles that are becoming the industry standard. But this is only the first step. Financial institutions must put these principles into practice, and this requires both thought and action. That’s why I’m urging the whole sector to get involved with The Smart Campaign, a global effort to get client protection on everyone’s radar.
The global financial crisis underscores the importance of these principles. I fully agree with the Smart Campaign that pricing, terms and conditions of financial products should be as transparent and responsible as possible. Read the rest of this entry »
> Posted by Kelley Mesa
The New York Times today writes on a topic of much concern for the microfinance community—interest rates. In recent years, interest rates have been falling, but there is still quite a ways to go.
The author, Neil MacFarquhar, is right to highlight transparency as a key factor in this debate. Clear communication of loan terms with clients, public disclosure of rates—these will contribute to an open and competitive environment. Indeed, transparent pricing is at the heart of The Smart Campaign. And so is responsible pricing, which calls for continued striving to reduce costs and increase competition so that interest rates can continue to fall.
The microfinance industry is at a crossroads. We can make the same kinds of mistakes as the mainstream American financial sector did in the subprime mortgage industry, when they promoted teaser interest rates and other ways of enticing clients to over-borrow. Or we can choose the high road of transparency, keeping the client first in all decision-making. If we fail to progress on interest rate transparency and ultimately in reducing costs and rates, we will undoubtedly suffer serious consequences as an industry. The Smart Campaign says let’s make microfinance an example of responsible finance for the rest of the world. Read the rest of this entry »
> Posted by Kelley Mesa
Paul Rippey’s lates Energy Links podcast features a special selection of interviews recorded in the field, in Nyanza Province in Western Kenya, with savings group members who have purchased solar lamps. The lamps have been sold by one of the entrepreneur franchisees working for CARE to train savings groups – Leonida Bironga. Leonida confidently thinks she can sell a thousand lamps a month if she gets the supply, and that is about to happen. The future for village life looks much brighter all of a sudden in Western Kenya!
Listen to the podcast »
> Posted by Kelley Mesa
The USAID Speakers Corner online discussion featuring Elisabeth Rhyne and Deborah Drake starts tomorrow. They will be exploring the challenges presented by microfinance institutions during periods of transition. Participants are encouraged to share their own experiences, questions, and comments.
To learn more and register for the discussion, click here »
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