Monthly Newsletter Issue No. 31
Kismat Ali is a 33-year-old mason living in Kakhin Bimile, a village a few hours drive from Dhaka, Bangladesh’s crowded capital. He lives in a large brick home on a dirt road with his wife, son, parents and five brothers. This semirural area is off the main electrical grid, so residents rely on kerosene lamps and electricity from wires strung across the village to a noisy privately owned diesel generator. It runs about five hours each night.
But Mr. Ali has a new source of electricity he can turn to: solar panels on his corrugated metal roof. In his home, he flicks a light switch and a bare bulb glows from the ceiling. Mr. Ali proudly switches on a fan that stirs the stultifying summer air. He says he wants to have a television one day, but is waiting for an LED TV that would consume less energy than models available now.
Solar energy is reliable, clean and cheaper in the long run than kerosene and the village’s generator. It costs about 3,000 taka ($38) a month for the diesel generator to light a three-room house. But for the solar equipment, Mr. Ali pays 1,355 taka ($17) in monthly installments after a down payment of 6,500 taka ($83) on a loan he expects to pay off within two years.
A project has been launched to improve livelihood, capacity building and popularise thrift among 1,000 tribal women in Anantagiri mandal.
The initiative is aimed at facilitation of collaboration through promotion and strengthening of Mutually Aided Cooperative Thrift and Credit Societies. The women will be trained on how to market better and collect more non-timber forest produce like tamarind, turmeric, amla and ginger. Value-addition and inculcating entrepreneurship will be the focus area.
Microcredit for Mothers, a Netherlands-based public charity organisation, has come forward to fund the project. It has chosen Nature, a local NGO, as the partner for implementation of the project with specific deadlines. The Anantagiri project will mostly benefit Kotia, Konda Dora, Valmiki, Bhagata and Pydi tribals.
In a move that can expand the reach of crop insurance schemes, micro insurance agents have now been permitted to sell government-sponsored crop insurance products to farmers.
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a circular to this effect.
The decision of the regulator came in the wake of requests made by some stakeholders to categorise government-sponsored schemes as micro insurance products irrespective of the sum insured under the individual policy.
With this decision, crop insurance products under schemes such as Pradhan Mantri Fasal Bima Yojana (PMFBY), Weather-Based Crop Insurance Scheme (WBCIS) and Coconut Palm Insurance Scheme (CPIS) can be bought by farmers from micro insurance agents without any limit on the sum assured.
The rapid growth in the microfinance space seems to have caught the attention of private sector banks, which have lately been getting aggressive in tapping the opportunity at the bottom of the pyramid, either through acquisition of microfinance firms or by buying minority stakes in them.
On 30 September, Mint reported Utkarsh Micro Finance Pvt. Ltd raised Rs395 crore from domestic institutional investors, as the firm prepares to make a transition to a small finance bank. One of the key investors in the investment round was private sector bank RBL Bank Ltd, which picked up a 10% stake in the company.
Also on 30 September, private sector lender Kotak Mahindra Bank Ltd said it had acquired BSS Microfinance Pvt. Ltd for Rs139.2 crore.
Microfinance institutions (MFIs) have sought permission to mobilize deposit from public after their traditional source of fund is likely to dry up following the new requirement for commercial banks to extend 2 percent of their total loans to deprived sector.
Though two microfinance institutions — Chhimek Laghubitta Bikas Bank Ltd and Nirdhan Utthan Bank Limited — have got permission to collect deposits, other microfinance institutions can only extend micro credits in rural areas.
Microfinance institutions largely rely on commercial banks and development banks, which are required to float 5 percent of their loans to the deprived sector, for funding to lend small borrowers.
Apart from deprived sector lending, they can also borrow more money from the commercial banks and development banks. They also get some subsidized fund from the central bank if they open branches in certain areas.
Microfinance institutions say that they have long been demanding for permission to mobilize deposits from public. They say that it would be difficult to stay in business after the central bank made it mandatory for the commercial banks to extend 2 percent of their loans to the deprived sector themselves.
Read more at: http://www.myrepublica.com/news/7909
Nepal: MFIs Work on New Banking Platform | October 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.
Pakistan: Easypaisa Service Removes Account Restrictions for Money Transfer in Pakistan | October 27
Pakistan’s first and largest branchless banking service Easypaisa has introduced money transfer from Easypaisa Account to any mobile number.
Formerly, Easypaisa Account holders could transfer money to any CNIC, bank account and Easypaisa Account across the country. With this new service launched, they now are enabled to send money to any verified mobile number anytime, anywhere in the most secure and convenient way. This will further increase financial access, as the receiver can instantly open an Easypaisa Account and receive the money.
“In pursuit of our financial inclusion goals, we are aiming to make Pakistan’s favorite branchless banking service, Easypaisa comprehensively accessible to everyone,” said Muhammad Yahya Khan, Head of Easypaisa, commenting on the new development. “Transferring and receiving money straight from their mobile phone enables the masses to enjoy free and effortless financial transactions,” he added.
The process to transfer funds to any mobile number is simple. Easypaisa user simply dials *786# and selects the ‘Money Transfer’ option. The customer then chooses the ‘Send to Any Mobile’ option and enters receiver’s mobile number and the transfer amount, followed by the Easypaisa Account PIN to complete the transaction. In case the receiver doesn’t have an Easypaisa Account, the money transfer notification will prompt them to open one straightaway and receive payments in that account instantly.
Finance Minister Ishaq Dar has said providing micro-credit to the underprivileged segments of society is the top most priority of the government.
He was addressing a meeting in Islamabad on Friday to review arrangements for the launch of Pakistan Microfinance Investment Company.
The meeting was briefed on the operationalization of the PMIC and the shareholding structure with development partners including the United Kingdom and German companies.
Ishaq Dar said institutions like PMIC will ensure sustainable and inclusive growth in the country.
Sri Lanka: Fighting Poverty | October 17
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.
Regulating financial services for the poor in Sri Lanka: A closer look at the long-awaited Microfinance Act. Considering that the poor and vulnerable are the target group of clients in the sector, it is unarguably important to ensure proper regulation and supervision of the industry. To this effect, the long awaited Microfinance Act (No. 06 of 2016) came into effect from July 2016, after several drafts over nearly a decade. The Microfinance Act is expected to be beneficial to the clients, providers and the microfinance industry as a whole.
The Act does not apply to all the providers of microfinance. A number of microfinance providers including the Divineguma community banks and co-operatives such as the thrift and credit co-operative societies (TCCSs) will continue to be governed by their current Acts while only the MF companies and MF NGOs will be covered by this Act. Even for the MF companies and the MF NGOs, being licensed/registered is mandatory only if they wish to mobilize savings while the others can continue business as usual. Interviews with some stakeholders revealed that approximately 15-20 MF companies are expected to apply for a license, primarily the more established ones with a larger outreach.
The UN Day for Eradication of Poverty was observed on October 17, 2016, under the theme “Moving from humiliation and exclusion to participation: Ending poverty in all its forms”. Microfinance has been widely recognized as an important tool for addressing poverty. Hence, this article to mark this Day reviews the Microfinance Act of Sri Lanka that came into effect in July 2016 and discusses its benefits and concerns.
Read more at: http://dailynews.lk/2016/10/18/features/96244
|Back to Boulder: Strategic Response to Risk in Microfinance Markets
Nov 28 – Dec 02, 2016 | Washington, DC – United States
|Inclusive Finance India Summit 2016
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|Strategic Management for Microfinance Practitioners
Dec 04 – 09, 2016 | London, United Kingdom
|Microfinance Acceleration Program – Tanzania
Dec 05 – 08, 2016 | Arusha, Tanzania
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.