You are currently browsing the monthly archive for June 2010.
> Posted by Brian Busch
The Aligning Interests team from CFI and Calmeadow continued facilitating a wide industry discussion with a fourth roundtable discussion, this time in at ACLEDA Bank in Phnom Penh, Cambodia. Participants discussed several real cases where stakeholders’ interests affected institutional transitions, and they debated potential ways MFIs could make the transformation process as smooth as possible. Heather Clark, who lined up the session, made sure that it was linked with a transformation workshop put on by ACLEDA’s new microfinance training center. Read the rest of this entry »
> Posted by Anita Gardeva
A new report by Barclays and the Economist Social Intelligence Unit came out this week, focusing on financial inclusion around the world the factors that influence it.
The report is broad in its scope, touching on the demographic, geographic, political, and cultural reasons for financial exclusion. It discusses financial inclusion in both developing and developed nations, and highlights the importance of a full range of financial services. A look at the roles of technology, regulation, and financial literacy in increasing access to and the benefit of financial services highlight opportunities for action.
Read the report here.
For more information, sign up for updates from the Financial Inclusion 2020 campaign.
> Posted by Anita Gardeva 
Although many of the world’s financially excluded are people with disabilities, this same population segment is underrepresented in the clientele of microfinance institutions around the world.
For this reason, this week, the Center together with the World Bank Disabilities and Development Team will be holding a roundtable on expanding financial services to people with disabilities. “A New Financial Access Frontier: People with Disabilities” will facilitate discussion around the business case, the challenges and opportunities, and successful case studies regarding expanding financial access to people with disabilities. The purpose of the roundtable is to generate an action plan to make microfinance institutions more disability inclusive. To learn more, read the concept paper that provides the context for Friday’s roundtable discussions.
The event will be held this Thursday, June 18th from 9am to 4:30pm at the World Bank. More information about the speakers and the agenda can be found here. The event can be viewed live via webcast here on Friday, June 18th.
For more information, sign up for updates from the Financial Inclusion 2020 campaign.
> Posted by Anita Gardeva
In her latest Huffington Post blog , the Center’s Managing Director, Elisabeth Rhyne, discusses the range of microfinace regulation practices throughout Latin America and their potential impact on the industry and the client.
Populist governments across Latin America are re-shaping the environment in which microfinance institutions (MFIs) provide financial services to low income people. The proposals of these governments are similar -interest rate caps that are politically attractive but unfeasible, public intervention in financial services (as they have nationalized other industries) and a politicized approach to credit.
What may be surprising to those of us watching Latin America from afar is that not all the populists are alike. ACCION Network members, a group of 25 leading MFIs from across the region met last week in Barranquilla, Colombia to compare notes. They report wide differences from country to country. In some countries the populists take an approach that is makes it hard for MFIs to continue operating while in others they are willing to work more constructively with the providers.
Read the article…
> Posted by Anita Gardeva
Today Grameen Foundation released a report that reviews recent studies on microfinance’s impact on poverty alleviation. The report, Measuring the Impact of Microfinance: Taking Another Look, highlights that studies have shown that microfinance helps people cope better with financial shocks that otherwise can often leave them more vulnerable. The report also discusses the challenges that make impact assessment for microfinance so difficult.
Written by Kathleen Odell, the paper is an update to a previous Grameen Foundation report by Nathanael Goldberg (Measuring the Impact of Microfinance: Taking Stock of What We Know) which was written in 2005.
Read the report >
> Posted by Courtney Piper
Pricing transparency is at the core of the Smart Campaign’s Client Protection Principles. But interest rates are often difficult to understand, calculate, and compare due to variables including associated fees, commissions, savings requirements, and different methods of calculating interest.
In keeping with the Smart Campaign’s goal of ensuring that pricing, terms, and conditions of financial products are transparent and adequately disclosed in a form understandable to clients, this is the first in a series of posts providing some fundamental concepts — including a review of some common practices and definitions of basic terms — to keep in mind.
Annual Percentage Rate and Effective Interest Rate
The most common and comparable interest rate is the APR (annual percentage rate), also called nominal APR, an annualized rate which does not include compounding. The United States Truth in Lending Act requires disclosure using the APR, and it is used as a standard rate in many other countries.
The APR can be calculated by multiplying the periodic interest rate (say 2 percent per month) times the number of periods per year (in this case 12). Where n equals the number of periods per year and i equals the periodic (in this case, monthly) interest rate, then APR can be calculated as:
APR = i * n; or, using our example: 2% * 12 = 24%
The EIR, or effective interest rate, also known as effective APR, effective annual rate (EAR), or annual equivalent rate (AER), takes into account the effect of compounding. Read the rest of this entry »
> Posted by Anita Gardeva
The Center for Financial Inclusion developed its vision for financial inclusion because we recognized that a clear definition of financial inclusion is lacking in current conversations.
Now we want to move beyond defining the term financial inclusion to building out the language essential for discussing this multi-faceted issue, with the Center’s new Financial Inclusion Glossary.
Numerous terms–from vague concepts such as quality to more commonly used terms like over-indebtedness–require better definitions. Defining the common financial-inclusion vocabulary is also helpful in mapping out how various concepts fit into the financial inclusion puzzle and identifying the roles and strategies needed to advance.
Our interactive glossary is starting out with more than 85 terms and plans to grow. You can help by recommending terms and definitions that you think should be included in this initiative. We are excited to share this effort with you and hope that you will find it useful and partake!
Visit the Center’s Financial Inclusion Glossary >
For more information, sign up for updates from the Financial Inclusion 2020 campaign.
> Posted by Anita Gardeva
ACCION International, creator of the Microfinance Cracking the Capital Markets Conference series, is partnering with Citi Foundation and EDA Rural Systems to organize Microfinance Cracking the Capital Markets South Asia 2010, in Delhi, India, June 23-24, 2010. Registration is now open!
Microfinance Cracking the Capital Markets will bring together major institutional, private and social investors that are currently involved in microfinance or interested in entering the sector. Mainstream investors like KKR India, ICICI Prudential and Sequoia along with microfinance veterans such as Dilli Raj (SKS Microfinance), Eric Savage (Unitus Capital),Vijay Mahajan (Basix), and Royston Braganza (Grameen Capital india), will share their thoughts on the most pressing questions facing Indian microfinance investment today, including:
- What innovative financing structures are available to institutions seeking capital?
- Are Indian MFIs overvalued as some investors perceive?
- Are there too few MFIs in India to satisfy the vast investment appetite?
- Who are the region’s potential MFI leaders in the next decade? Read the rest of this entry »
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