Monthly Newsletter – Issue No. 27

Monthly Newsletter – Issue No. 27
Monthly Newsletter – Issue No. 27

Monthly Newsletter Issue No. 27

JUNE 2016

Latest News

Bangladesh: Create development projects for poor, reducing allowance-dependence | June 21

Increasing the amount of allowance and coverage in social safety net programme will not much help reduce poverty. It rather encourages dependence on others and promotes corruption. Only creating income opportunities for the poor communities will help them stand on their own feet, reducing poverty in a sustainable manner, observed speakers today on Tuesday at a seminar on the national budget recently proposed in parliament.

BRAC Research and Evaluation Division and Advocacy for Social Change department jointly organised the event titled ‘A review of national budget 2016-17’ at the BRAC University auditorium at Mohakhali.

Former advisers to caretaker government economists Dr Akbar Ali Khan and Dr Mirza Azizul Islam were key speakers, while Research and Evaluation Division director Professor Abdul Bayes gave the key presentation. Advocacy for Social Change director KAM Morshed moderated.

In welcome speech KAM Morshed said, since 1972 BRAC has been working to reduce poverty. In continuation of its work the seminar was organised to review how this budget will influence the economic development and social empowerment of the poor communities.

India: Rapid Growth of MFIs’ Gross Loan Portfolio Sets Alarm Bells Ringing | June 27

Microfinance companies extended heavier loans to their customers in the last financial year, data showed, raising concerns the sector that emerged from a crisis not far ago may be growing too fast yet again for its own good.

The loan portfolio of microfinance institutions (MFIs) stood at Rs.53,233 crore as of 31 March 2016, up from Rs.28,940 crore a year ago, according to data from the Microfinance Institutions Network (MFIN), a self-regulatory organization for the industry. However, this 84% jump in loans comes against a much more modest 44% increase in the number of clients, suggesting the average loan per customer is on the rise.

The number of branches and employees too have grown much slower during the year, at 22% and 36% respectively.

Ratna Vishwanathan, chief executive officer of MFIN, linked the loan growth to the increase in client base and income levels.

“Client base has increased by 44%, which is balancing out the increase in loan book. Also, general income levels have increased which led to such a high growth pattern,” said Vishwanathan.

India: India’s Credit Information Bureau Expands into Small and Micro Loans Segment | June 16

India’s Credit Information Bureau (India) Limited (CIBIL) has expanded its reach in the small and micro loans segment. CIBIL will partner and provide information solutions to small and micro lenders to help them make better lending decisions grow their customer base and drive credit penetration.

While speaking about CIBIL’s expansion in the small and micro loan segment Ratna Vishwanathan, CEO of MFIN commented, “Although banks have started providing data to all credit bureaus, CIBIL’s expertise in data insights and solutions is very valuable in the context of a more complete credit profile. CIBIL’s experience and leadership in handling a bureau will be a good value addition to the MFI credit rating ecosystem.”

CIBIL claims that the availability of credit information insights has contributed to driving growth in the retail credit segment while fueling credit penetration and financial inclusion in the country. CIBIL Insights revealed that retail loans have grown at an average CAGR of 28% over the last three years, while at the same time there is significant reduction in retail NPA rates.

India: IPO investors open to invest in sectors like dairy firms, micro-finance and healthcare | June 02

Gone are the days when traditional industries such as construction and engineering used to dominate the primary market to raise funds. These days, sectors like dairy firms, micro-finance, healthcare and staffing services are crowding the initial public offering (IPO) space. Investment bankers say investors are open to investing in these companies because of their stronger growth prospects.

“I see the trend (of non-traditional and service sector IPOs) continuing because many of these sectors have high potential for growth. That is why investors have shown a preference for these kinds of stories,” said S Ramesh, MD, Kotak Investment Banking.

Of the 11 listings in the current year, majority of the companies have few or no comparable peers in the listed space. These firms collectively raised Rs 7,343.07 crore. Some of these include Narayana Hrudayalaya, Teamlease Services, Quick Heal Technologies, Equitas Holdings, Thyrocare Technologies, Ujjivan Financial and Parag Milk. Their issues were oversubscribed 1-52 times and most of are trading above their issue prices as well, up 9 to 51%.

Pakistan: USD 600 Million Loan Program To Help Reform Public Enterprises | June 29

The Asian Development Bank (ADB) has approved a USD 600 million loan program, with a first subprogram of USD 300 million, to help Pakistan roll out major structural reforms to improve the performance and financial sustainability of its public sector enterprises.

The full program will help the government draw up and roll out a comprehensive reform plan to improve the financial transparency of public sector enterprises and to strengthen their corporate governance. It will include support to establish a retirement cost fund to manage huge unfunded pensions and other retirement liabilities of workers. Unfunded pension risk presents a serious threat to the financial health of the enterprises.

Measures to strengthen auditing, accounting and other elements of operations at Pakistan Railways will also be supported by the program, along with actions to improve the performance of federal financial sector entities to boost financial inclusion in the country.

Pakistan: Mobile Money Revolution: The Next Big Thing in Pakistan | June 21

Though mobile money has a long history but only recently it has gained momentum due to the innovative technology support for it. This trend of “non-coined currency” is adopted across the world in different ways and its demand has been successfully recognized by the companies and organizations.

If you lose your wallet then it means you have lost all your financial belongings for good but if that information is saved in your mobile instead of your wallet, your account is safe from misuse. The modern financial transactions have turned its way towards mobile transactions i.e. Mobile Money or M-banking which refers to payment services operated under financial regulation and performed rom or via a mobile device. So instead of paying your bills with cash, cheque, credit or debit cards, now you can use a mobile phone to pay your bills. Though mobile money has a long history but only recently it has gained momentum due to the innovative technology support for it. This trend of “non-coined currency” is adopted across the world in different ways and its demand has been successfully recognized by the companies and organizations.

Upcoming Events

International Investors Conference

Sep 06 – 08, 2016 | Accra, Ghana
Acceleration Program for Microfinance Practitioners in sub-Saharan Africa

Sep 12 – 16, 2016 | Dar es Salaam, Tanzania
Sa-Dhan’s National Conference 2016

Sep 14 – 15, 2016 | New Delhi, India

About SAMN

The South Asia Micro-entrepreneurs Network (SAMN) is a regional body working to enhance financial inclusion among low-income population in the region. SAMN achieves this by improving knowledge, business environment and capital flows for the microfinance industry across six countries in the region: Afghanistan, Bangladesh, India, Nepal, Pakistan and Sri Lanka. SAMN’s members are national networks from these countries. Thus, SAMN is the representative voice of the South Asian Micro-entrepreneurs community reaching more than 60 million low-income customers in the region.