Monthly Newsletter Issue No. 30
| September 28
For managers, wage digitization increases efficiency and cost-saving in the long term, while reducing the security risk involved in handling large sums of cash. For the workers, it increases transparency and accountability in the factories by requiring businesses to keep track of employee hours worked and wages paid, alongside reducing social and economic vulnerability by providing female factory workers with formal financial access.
Bangladesh’s ready-made garment (RMG) industry is a primary source of foreign exchange revenue for the country, contributing over $30 billion from global exports and 10% of the country’s GDP in 2015. In addition, the RMG sector provides vital job opportunities to millions of migrant, low-income and semi-skilled workers in the country, employing over 4.5 million Bangladeshis. However, the same reasons that make Bangladesh’s RMG industry competitive at the global level also make its workers socially and economically vulnerable. Garment factory workers in Bangladesh are notorious for working in poor labor conditions, often with little accountability of total hours worked or wages received, and with little or no long-term financial or medical benefits provided to them through the factories. The 2013 Rana Plaza factory building collapse acted as a dire wake-up call for the international development community to improve the labor conditions in many of these factories, and some progress has been made. However, the workers’ economic conditions remain grim. At the moment, a large majority of these factories pay workers in cash, often having them queue up on payday and face the security risk of transacting in cash. The fact 80% them are women, many of whom lack financial literacy and access to formal financial services, further aggravates the situation.
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.
India: IntelleGrow Launches India’s First SME Debt Pool Program in Collaboration with Symbiotics, Geneva | September 29
This pool program enables impact investors to invest in a group of impact-driven Indian SMEs, which don’t have to pledge hard collaterals as security unlike existing market accesses.
IntelleGrow, a leading venture debt financing arm of Intellecap Group, launches India’s first SME Debt Pool Program in collaboration with Geneva-based leading global investment company Symbiotics to bring international financing to small corporates and medium enterprises (SME) in the country through innovative financing structure. This collaboration is aimed at supporting social enterprises in India which find it difficult to raise sufficient debt facilities to meet their funding needs. Under this arrangement, the first structured finance transaction has been closed with financing of a pool of seven SMEs amounting to approximately INR 320 million (USD 5.3 million).
India: Habitat for Humanity and IKEA Foundation to Improve Homes for Children in India and Kenya | September 22
International non-profit housing organization Habitat for Humanity and the IKEA Foundation are partnering for the first time. A Euro 5.3 million grant from the IKEA Foundation will help families in poor communities in India and Kenya to improve homes through access to small loans and affordable, eco-friendly building materials and services.
The program will help 15,000 families in India to improve their housing. Habitat for Humanity is ensuring 45,000 children have a healthier home to play, learn and grow up in. In Kenya, Habitat for Humanity will conduct an analysis of the market for building materials and construction services. It will leverage capital and offer technical assistance to local microfinance institutions to set up small loans for home improvements.
India: Businesses Designed to Help Poor in India Attracting Overseas Investors – Poll | September 15
As a new business in India offering environmentally-friendly rubbish disposal, ScrapApp has boomed in the past year while helping address one of the nation’s major problems — garbage.
In India, where recycling rubbish is not part of the formal sector, masked workers from social enterprise ScrapApp sift through mounds of rubbish daily at India’s largest mall, DLF Mall of India, separating recyclable trash from other waste.
The mall contract is the jewel in the crown for the year-old start-up, one of a growing number of social enterprises in India, which are seeking funds to create businesses with a mission to tackle social problems.
A Thomson Reuters Foundation poll of nearly 900 experts on the best countries for social entrepreneurs found access to investment was one of the key challenges in the growing sector.
Nepal: MFIs Work on New Banking Platform | September 18
Thirty-four Microfinance Institutions (MFIs) have come together to invest in an IT company—Nepal Finsoft Limited—to launch a world-class core banking and management information system (MIS) solutions platform.
The initiative has been made possible by the work of the Nepal Microfinance Banks Association (NMBA) with technical assistance as well as funding support from Sakchyam, an access to finance initiative from the UK Aid.
Nepal Finsoft Limited is procuring the IT system from Puresoftware Limited and the system is expected to go live in April 2017. The platform will have a centralised system hosted at Nepal Finsoft Limited as a Shared Access Platform to which a;; subscribing banks can connect via their desktops, laptops and even tablet devices.
“The launch of this platform will allow uniformity in information, leading to increased efficiency and capacity to serve clients. This will also lower overall costs as the cost of the infrastructure is being shared by all participating financial institutions,” read a Sakchyam statement.
|Community Based Financial Inclusion and Microfinance
Nov 14 – 25, 2016 | Pathumthani, Thailand
|9th Biennial Microfinance Conference
Nov 23 – 26, 2016 | Jijiga, Ethiopia
|Finance for Microfinance Managers in Sub-Saharan Africa
Nov 21 – 25, 2016 | Accra, Ghana
|Excellence in Digital Finance
Nov 24 – 25, 2016 | Vienna, Austria
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.