Monthly Newsletter Issue No. 29
Farmers, in near future, may no longer need to queue up at banks for farm credits nor need to go to the banks or kiosks to withdraw cash. All they would need to do is use their preloaded debit cards to buy agro-inputs.
For purchasing seeds, fertilisers, pesticides, weedicides or fuel, growers would pay retailers through NFC (near field communication) -enabled smart biometric point of sale (PoS) devices.
Retailers would be equipped with smartphones with a “payment gateway app” that would deduct the money from the debit cards. The smartphones would be their PoS.
The NFC is a set of protocols that enables two devices to establish communication between them when both of them are within about 4cm of each other.
Mobile money in Bangladesh had a fast start, with a particularly rapid growth of over-the-counter (OTC) use. Recent data from a Financial Inclusion Insights (FII) survey and Bangladesh Bank, however, show that while use is still increasing, the rate of growth in transaction value and volume is tapering off.
In addition, Bangladesh shows a big drop off between awareness and use – 92% of adults are aware of mobile money, but only 33% use mobile money, and only 9% of adults have a registered account.
Microfinance has virtually swept over rural Bangladesh with the help of thousands of microfinance institutions (MFIs). Some of these institutions are very big and some are very small but together they account for about 60 per cent of total rural credit supply.
Ipso facto, an assessment of major transformation taking place in the microfinance sector is necessary to glean its impact on rural Bangladesh. As revealed by available information, some of the shining statistics relating to the past periods are as follows: MFIs started their journey providing micro loan of Tk. 1,000; today, they provide loans as high as Taka one million (average Tk. 24,000); membership has increased to 34 million in 2014; annual disbursement went up 15 times and net savings by 17 times, so on and so forth. Available empirics show that more than half of the rural population has been covered by microfinance. A recent estimate shows that more than half of rural households have taken microfinance at some stage in their lives, and almost half of households reported to be current borrowers.
It is now possible, as easily as messaging someone, to transfer funds 24×7 through our smartphones.
Last week, several banks launched app-based services, kicking off a revolution in the way we digitally transfer funds using smartphones.
It is now possible, as easily as messaging someone, to transfer funds 24×7 through our smartphones to not just pay utility bills, transfer to another bank account, but even move funds to each other (P2P or peer-to-peer)—all this without sharing personal details like a bank account or a credit card number.
And this is being made possible by employing the unified payments interface architecture launched by the National Payments Corp. of India (NPCI)—the brainchild of the Reserve Bank of India and the Indian Banks’ Association and serves as the umbrella organization for all retail payments systems in India.
There are an estimated 200 million smartphones in the country. So, this is the potential base for drawing the new highway of financial transactions; and this adds up to about half the size of the population of the US.
Accion, the global nonprofit focusing on the financial inclusion space, is looking to double its exposure to India in the coming years from the current $25 million (Rs 167 crore).
The firm is looking for investments across areas like small business lending and financial technology startups, primarily in the early to mid-stage segment.
“Today, India is our most active country. We have a three-pronged strategy in the country,” said Accion chief operating officer (COO) Esteban A Altschul. He said that Accion is currently in talks with half a dozen companies for an investment and that “India is the hotbed for financial inclusion worldwide”.
On the financial inclusion side, Accion is eyeing investments in segments like alternative credit scoring, risk management and insurance products for bottom of the pyramid.
Accion has been operating in India for nearly a decade, with investments in Patna-based microfinance firm Saija Finance, Mumbai-based banking correspondent player Swadhaar Finserv and more recently in Chennai-based financial inclusion platform IFMR Holdings.
India: A Permanent Path Out of Poverty for Small-Scale Farmers | August 03
We need more risk-takers and innovators who can offer end-to-end support to smallholder farmers facing climate vulnerabilities and other challenges.
Ashok Goud is small farmer in the state of Telangana in southern India who has been farming two acres of land for the past 20 years. When his paddy crop failed last year due to drought, he planted maize. When the market for maize fell, he learned how to grow tomatoes with help from the local seed store’s owner. When his land was unusable six months in a year due to heat waves exceeding 115 degrees Fahrenheit (46 Celsius), he ran a small store on the side to support his family. Ashok is an entrepreneur, and his dedication to an often unforgiving profession is unwavering.
More than a billion people in the world are employed in agriculture, and in India, one out of four people are farmers or agricultural workers. Like Ashok, these smallholder farmers—who constitute 85 percent of farmers globally—make up one of the largest constituencies among the world’s poor. They farm on a hectare or two of land, and often lack access to the right seeds and fertilizers, technology, and knowledge, which in turn makes their yields far lower than they could be. Markets fail them when they try to sell their produce. On top of these challenges, they are increasingly affected by climate change.
Nepal Rastra Bank (NRB) has instructed commercial banks to disburse at least two percent of their total loans to the deprived sector directly by themselves.
Issuing a new circular on Monday, the central bank said banks should make 2 percentage points of the five percent lending to the deprived sector by mid-July 2017. Ending the facility of whereby banks could make 5 percent of their deprived sector lending throughout a fiscal year, the central bank made it mandatory for banks to make 1.25 percent lending to deprived sector by mid-September, 1.5 percent by mid-December and 1.75 percent by mid-April 2017.
By announcing the directed sector lending to the deprived sector, the central bank has said that loans to the low-income family and women, mainly from the socially backward community, people from indigenous, Dalit, people living with disability, marginalized, labors and landless families can be counted under this category.
The loans, up to the limit that the central bank has set, floated to the self-employed micro enterprises that are operated for social and economic uplifting of deprived sector could also be counted as deprived sector lending, according to the circular.
Read more at: http://www.myrepublica.com/news/4718
The Security and Exchange Commission of Pakistan (SECP) has filled up the regulatory vacuum in the microfinance sector by introducing non-banking microfinance regulatory framework, SECP Chairman Zafar Hijazi said.
He stated this while addressing a conference on credit scoring model and the launch of Pakistan Microfinance Review 2015 in Karachi as the chief guest. He told the audience that the framework has been introduced after extensive consultation with all the stakeholders including microfinance industry participants and the purpose is to remove hurdles in the rapid growth of the sector.
Under this framework the NGOs registered with the SECP can directly apply for non-banking microfinance business license. He also said that the existing NBFCs operating as leasing companies or investment finance companies can also obtain license for microfinance business.
Until recently, Govind, a father of three, was one amongst the millions of Pakistanis living in poverty. A native of Badin Sindh, his life had been spent struggling to provide three square meals a day for his family.
When he was a boy, Govind learned early on the disappointment and struggle that comes with poverty. Govind recalls the time when, as a child, he aspired to become a schoolteacher. Tough financial times and responsibilities at home deprived him of the opportunity. Coming from a minority community didn’t help matters much. He was certain that his children would face the same fate of grinding poverty without access to education if he didn’t act fast.
Govind’s father worked very hard throughout his life, doing his best to meet the needs of the family. Despite working for 35 years in a shoe manufacturing shop, he could never save anything for himself or for his family. While relocating from the village, Govind’s family only had 70 rupees and his father’s shoemaking skills. Initially, a few relatives supported them but they were also not financially strong enough.
Read more at: http://www.brecorder.com/articles-a-letters/187/79037/
Pakistan: Visa to Offer Debit Cards to Millions of Micro Financial Services Users in Pakistan | August 09
Mobile Financial Service, JazzCash, which is a collaboration of Mobilink and Mobilink Microfinance Bank, has entered into a partnership with global payments technology company, Visa, to offer Visa debit cards to consumers.
This partnership, a first of its kind in the country with respect to changing times and global industry practices.
This unique partnership will enable JazzCash to further strengthen its Mobile Financial Services ecosystem by leveraging on Visa-enabled merchant locations both locally and internationally. This move also ensures that the country’s unbanked segment will not just have access to a bank account through their mobiles, but also to a globally accepted payment card.
Both USAID and the Engro Foundation are expected to support 5,000 farmers through this partnership by encouraging microfinance banks to grant loans, which will ensure farmers an access to all the necessary tools and services needed for agricultural inputs and transactions.
A Memorandum of Understanding (MoU) was signed between the United States Agency for International Development (USAID) and the Engro Foundation, on Monday, with regard to generation of investment opportunities as well as the provision of access to modern information technology (IT) to farmers in Punjab.
“The MoU signed today, which will be managed through USAID’s Punjab Enabling Environment Project, highlights the US government’s commitment to support small farmers in Pakistan,” USAID Agriculture Specialist, Asad Ullah Khan, said.
Engro Foundation also noted, “Our two organisations will work together to connect farmers to the financial services sector to mobilise investments in small farms and create employment opportunities in the agriculture sector of Punjab.”
|Advanced Financial Analysis for Microfinance Practitioners
Sep 18 – 23, 2016 | London, United Kingdom
|Global SME Finance Forum
Sep 19 – 21, 2016 | Beijing, China
|The SEEP Network 2016 Annual Conference
Sep 19 – 21, 2016 | Arlington, VA – United States
|Islamic Microfinance Summit
Sep 26 – 27, 2016 | Dubai, United Arab Emirates
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.