Monthly Newsletter – Issue No. 33

Monthly Newsletter – Issue No. 33
Monthly Newsletter – Issue No. 33

Monthly Newsletter Issue No. 33

December, 2016

Latest News

Bangladesh: ILO – Most Female SME Owners Hardly Get Loans December 13

Over 60% women Small and Medium Enterprise (SME) entrepreneurs in Bangladesh do not get loans neither from the government nor the private loan providers, says a study of ILO, Bangladesh.

On the other hand, 88% SME women entrepreneurs expressed their dissatisfaction over the cumbersome loan application process that is a great barrier in the way of getting their desired loans, view specialists at ‘Dhaka summit on skill, employment and decent work 2016’ held at a city hotel yesterday.

During his presentation, Francis De Silva, senior specialist of ILO Bangladesh, stated that the average loan size for women-owned  SMEs is 47% less than the amount SMEs owned by men, and 36% of women reported gender-bias among financial institutions.

“And to get loan, women needed nearly 13 time visits to the bank to get their loan approved,” he further added.

Read more at:

Bangladesh: Mobile Money Drives Financial Inclusion  | December 11

Financial inclusion expanded 8 percentage points year-on-year in 2015, driven by growth in mobile money, according to a recent study.

About 43 percent of Bangladeshis are financially included, says the study conducted by Washington-based Research Company InterMedia with funding from the Bill and Melinda Gates Foundation based on statistics of 2015.

Of the figure, 24 percent of citizens are covered by non-bank financial inclusion and 19 percent have full-service bank accounts. Of them, 9 percent have mobile money accounts.

There were 3.9 crore registered mobile financial service accounts in Bangladesh until October this year, with only 1.38 crore active, according to the central bank.

Read more at:

Bangladesh: Male microcredit recipients more likely to be entrepreneurs than females: Study  | December 07

The study shows that only 15 per cent of women who have access to microcredit are entrepreneurs, while 39 per cent of their male counterparts who have access to microcredit are entrepreneurs, though male loan recipients are less than 10 per cent.

Males with access to microcredit have more potential to be entrepreneurs than women having the same facility, a study shows.

The study shows that only 15 per cent of women who have access to microcredit are entrepreneurs, while 39 per cent of their male counterparts who have access to microcredit are entrepreneurs, though male loan recipients are less than 10 per cent.

The findings of the study were revealed on Wednesday at a conference titled ‘National Policy Conference on Access to Credit and Women’s Entrepreneurship in Bangladesh” organised by the Center for Microfinance and Development of University of Dhaka and Faculty of Business Studies at the faculty.

There are currently about 20 million borrowers in the country, of which around 91 per cent are women.

The study also said only 1.3 per cent of women are entrepreneurs who do not have access to microcredit, while 20 per cent of men are entrepreneurs without having access to microcredit.

Read more at:

India: Small finance banks may need up to Rs60,000 crore by 2020: India Ratings   | December 15

Small finance banks (SFBs) could require up to Rs60,000 crore of non-equity funding by 2019-20 assuming 25% growth in both steady state loans and off-balance sheet loans, according to an India Ratings and Research report released on Wednesday. Off-balance sheet loan portfolio includes pass-through certificates and loans acquired through the business correspondent route. Steady state loans are the ones which the lender gives on its own. Non-equity funding comprises deposits, debentures and warrants.

Small finance banks would initially ramp up their deposits through wholesale funding at rates higher than those of commercial banks and gradually replace them with granular retail deposits, the report noted.

As these banks will offer term deposit rates of 8-10%, they will save nearly 200 basis points (bps) on borrowing cost, because as microfinance companies, their borrowing cost was 10-13%, the agency said.

The savings can be used to cover higher compliance cost and cost of carry for statutory liquidity investments, India Ratings added.

Read more at:

India: 19.71: Number of ATMs per 100,000 adults | December 13

This was the number of ATMs per 100,000 adults in India in 2015, as per the Financial Access Survey conducted by the International Monetary Fund (IMF). This number stood at 8.85 at the end of 2011 and at 17.80 at the end of 2014. According to the Reserve Bank of India (RBI) data, India had 215,039 ATMs at the end of June 2016. This was 182,687 at the end of December 2014, and 205,328 at the end of 2015, which is a growth of over 12%.

According to IMF data, the highest density of ATMs in the world is in Macau Special Administrative Region of the People’s Republic of China, with over 254 ATMs per 100,000 people. This is followed by Canada with over 220. Among the BRICS countries, Brazil has 114, Russia 173, China 76 and South Africa a density of 69 ATMs per 100,000 adults.

There is another way to see this. As per the survey, India has 61.88 ATMs per 1,000 sq km, which is higher than in Brazil (21.82), Russia (12.67) and South Africa (22.21). China has 92.32 ATMs per 1,000 sq km. This difference is mainly due to the higher population density in India.

Read more at:

India: The way forward with microfinance   | December 03

Indian Micro Finance Institutions (MFIs) primarily cater to a certain demographic — the bottom of the pyramid. In the aftermath of the demonetization move and push for a cashless economy, they need to reinvent themselves.

There are three different kinds of MFIs: The large, few in number, are for-profit or Non-Banking Financial Companies (NBFCs). Then, there are trusts and Non-governmental Organisations (NGOs), which are small but numerous. The RBI has given conditional licences to eight large NBFC-MFIs to convert themselves into small finance banks. This is the third category.

All three currently disburse loans, and collect repayments, which are mostly in cash. In semi-urban and rural areas, almost 95 per cent such transactions are cash transactions. They cannot continue in this way.

Big or small, they draw money from banks, which is then transported to the cluster of community centres via the MFI branches. At such centres regular meetings are held to distribute money to Lower Income Groups. Of course, the exact procedure varies, but then they pay loan instalments to generate fresh money to give out more loans. The residual money, in interests or otherwise, are sent back to bank branches.

Read more at:

Sri Lanka: Thai Finance Company Acquires 29.99% of Commercial Credit   | December 11

Group Lease Public Company Limited (GLPCL), a digital finance company listed on the Stock Exchange of Thailand (SET), acquired a 29.99% stake of Commercial Credit and Finance Plc (CCF) for USD 70 million at the Colombo Bourse last week. The transaction valued at over Rs. 10.56 billion is one of the highest recorded at the CSE, a company official said.

In the same exercise, BG Investments (Pvt.) Ltd and related companies along with CCF sold their 100% stake in microfinance subsidiary in Myanmar – BG Microfinance Myanmar Co Ltd (BGMM) – for a consideration of USD 8.0m to GLPCL. The CCF stake of 28.1% was valued at USD 2.284 million and works out to Rs. 330 million at the current exchange rate of Rs./USD 146.85. CCF will book a profit of Rs. 277.21 million before taxes on the transaction.

“First announced in September this year, the former is a historical transaction in terms of size. Two years ago, the investment of Rs. 1.68 billion (US$12.8 million equivalent) by Creation Investments Sri Lanka LLC was the biggest foreign investment into a finance company. Commercial Credit is very happy to partner with GLPCL where we see a long term win-win partnership through this investment with many opportunities for capital raising, synergies and growth,” said Commercial Credit’s Chief Operating Officer Rajiv Casie Chitty.

GL’s Chairman/CEO Mitsuji Konoshita sees this decision to buy 29.99% of Commercial Credit and Finance Plc (CCF) as one which will further enhance the strategic partnership between the two groups.

Read more at:

Upcoming Events

The Acceleration Program for Microfinance Institutions in West- Africa

March 06 – 10, 2017 | Lagos, Nigeria
Asia-Pacific Financial Inclusion Summit: Advancing Financial Inclusion in a Digital Age

March 21 – 22, 2017 |Hanoi, Vietnam
13th Annual Global Microfinance Forum

March 16 – 17, 2017 | Prague, Czech Republic
Cracking the Nut 2017: Reinforcing Food Systems to Meet Urban Demand

March 27 – 28, 2017 | Bangkok, Thailand

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.