9th University Meets Microfinance Workshop: "Financial Inclusion and Microfinance in Latin America" will take place at the Universidad de Salamanca, on May 30 & 31, 2013. Speakers: Professionals from Agencia Española de Cooperación Internacional para el Desarrollo, Cajamar Caja Rural, Fundación AFI, Fundación Nantik Lum, Inter-American Development Bank, NODUS Consultores, Pro Mujer, PlaNet Finance.Students and professors from University Autonóma de Madrid, University of Almería, University of Greenwich,
University of Salamanca, University of Zaragoza, Università Cattolica del Sacro Cuore and Banque Populaire Chair in Microfinance of the Burgundy School of Business (ESC Dijon). Programme:
- English version
- Spanish version More about the workshop on: www.universitymeetsmicrofinance.eu Language:
The workshop will be held in Spanish, except for the Group A students' research presentations which will be held in English. Registration:
Please register HERE
for the Workshop before Friday May 17th 2013
The European Microfinance Network (EMN) is holding its 10th Annual Conference in Stockholm on the 25th and 26th of June 2013.
The Conference will focus on finding concrete innovative solutions to the challenges facing the microfinance industry in Europe, as regards to the market needs, organizational designs that support strategic innovation and growth as well as innovative funding instruments to suit the specific needs of MFIs.
I'm a volunteer with COSM – the Community for Open Source Microfinance (http://www.openmf.org
). COSM is a spinout from the Grameen Foundation and has taken charge of developing the MIFOS (http://www.mifos.org
) core banking system for MFI's. Currently, the MIFOS system is used by about 40 MFI's with collectively over 1,000,000 customers; the largest client being Grameen Koota in India. As an open source solution it is available free of charge to MFI’s or to their technology partners.
COSM is supported by a donor community which allows us to fund a global core development team, with ancillary assistance being provided by the open source community. Shortly, COSM be a registered foundation to help facilitate the donation/grant process and expand development and support. To deploy the system globally, we seek to create a network of in-market System Integrators (SI’s) and Value-Added Resellers (VARs) who can support the system locally. These partners are likely organizations who will take the core and use it to either build country or market-specific solutions or interface it to complementary systems and services like mobile payments, credit bureaus, or microinsurance systems.
In my volunteer role, I have been asked to assemble a task force of financial services professionals to develop a long-term product roadmap for the MIFOS system. The objective of the roadmap is to extend the MIFOS system beyond microcredit and into support for savings, payments, insurance and other products of value to the poor. By broadening the scope of the MIFOS product, it is our intention to create a solution that will allow current clients and new clients to transform from traditional NGO-MFI’s and into deposit-taking institutions including regulated MFI’s, banks or credit cooperatives.
For this task force, I am seeking people with significant experience in financial services. Specifically, I am seeking people with a cross-section of experience working in different types of institutions (banks, credit cooperatives, agricultural lenders, microinsurance companies) and on different continents (ie. Asia, Africa, South America, North America).
Therefore, any contacts, referrals, or offers of assistance is greatly appreciated.
If anyone is interested, please have them connect with me by email at email@example.com
, by skype at sthomson0825 or through LinkedIn.
Principal ConsultantThomson + Associates2403-1228 Hastings St.W.
Vancouver, BC V6E 4S6
OIKOCREDIT is a social investor and worldwide cooperative that works with 854 partners across 67 countries with a €530 million development financing portfolio.
In 2012,the cooperative decided to focus on Africa, agriculture and inclusive finance.Despite the global crisis, loan approvals were at record levels, reaching € 234 million. New equity investments totaled € 12.5 million of these approvals,bringing the total number of approved equity holdings to 49.
Oikocredit is, as you may know, one of the world's largest sources of private funding to the microfinance sector, providing credit and equity to small businesses through microfinance institutions across the developing world and directly to trade cooperatives, small-to-medium sized enterprises and fair trade organizations.
Challenges to the microfinance sector have been numerous,but Oikocredit is committed to improving social performance management and supporting partners through capacity building and women empowerment. This is why 3,000 new investors decided to join in 2012, and total gross capital inflow from members increased to €60,9 million, up 35 % from € 45 million in 2011. That makes a total of 48,000 investors worldwide. Investors are people like you and me or institutions who want to live the cooperative spirit,invest with prudence while focusing on the long term ,and find it essential to maximise the social impact of their savings. They believe, like me, that money can be used fairly.
Becoming an investor in the Oikocredit International Share Foundation is simple and does not require to be particularly wealthy.You can start investing in France with €200. Since 1975, Oikocredit has been successful in raising capital largely by « word of mouth », through its 30 Support Associations throughout Europe and North America. Volunteers, like me, spend some of their free time to explain and convince and work with the other partners of the microfinance sector of the country they live in.
Christiane Riffaud,from Burgundy,France
Interested in volunteering? in investing? Simply connect to www.oikocredit.org
in your home country.
The AP High Court has finally delivered its verdict on the Mcirofinance cases, a short while ago. From the initial feedback received ( copy of judgement awaited ), the position appears to be as under:
1. The AP law of 2010 regulating MFIs has not been struck down.
2. No immediate relief as such has been given to MFIs.
3. Nonetheless, RBI as the regulator of NBFC-MFIs has been clearly recognised.
4. The State Govt has been asked to review their Act in light of the MF Bill which is currently in Parliament (Standing Committee on Finance ).
5. The time given for the above review is 6 weeks.
In this context, it may be recalled that:
Reserve Bank of India affidavit in the Andhra Pradesh High Court, made the following key points - extracts reproduced below:
· “NBFCs being regulated simultaneously by the RBI and State Government will result in dual regulation thereby adversely affecting the functioning of the NBFC-MFIs and the interest of the public,”
· “In case of NBFCs, the RBI has exclusive power to regulate and supervise them. The provisions of the impugned Act are ultra- vires the Constitution of India so far as it deals with NBFCs
· “Since the MFIs which are not registered under the impugned Act (AP MFI Act), cannot recover the loans granted by them, it would adversely affect the financial conditions of RBI-regulated NBFC MFIs”.
Overall, while not an outright victory for the industry, it seems that the aspect of RBI as the sole regulator is being recognized and some form of ‘face saving’ given to the S.Govt.
Full details and analysis will follow.
Note; RBI = Reserve Bank of India
NBFC = Non Bank Financial Corporation
MFI = Microfinance Institution
MFIN = Microfinanace Institutions Network (which is the Apex representative network of for-profit MFIs in India)
The Christmas holidays were a time to make new associations.
Dr. Rashidah Abdul Rahman and Dr. Nawal Kasim of Accounting Research Institute, Universiti Teknologi MARA in Selangor, Malaysia met Dr. Arvind Ashta and Dr. Djamchid Assadi of the Banque Populaire Chair in Microfinance of the Burgundy School of Business in Paris and brainstormed on many possibilities for joint research and cross-cultural comparative studies:
- Financial Diaries,
- Credit and Poverty Scoring,
- Social Collateral and Trust.
Meaning is the essence of microfinance. Without meaning, micro credit becomes credit or revolving credit which is blamed for compulsive buying, overindebtedness and related social distress. French 2011 statistics show that 9 out of 10 ‘officially’ over-indebted households have unpaid revolving credits .
The word ‘credit’ is full of meaning. It comes from the Latin ‘I believe’. So if you really believe a person, you should not charge him a premium on the credit risk. Unfortunately, such charges are often the biggest component of the interest rate. Loan sharks don’t give credit, they lend.
Hopes for sustainable microfinance emerged when borrowers understood that people, who didn’t have any obligation, gave them credit, not pity. Only a fool would pay back a governmental loan when everybody knows that corruption rules the country. Only a naïve would pay back a small bank loan when all think that the banker sleeps on a mattress full of people’s money.
Different forms of micro credit exist since centuries, but microfinance gained critical mass only recently. I believe that baby-boomers’ search for meaning is the driving force behind the steep growth of microfinance. In 1995 – the year CGAP was created – first baby-boomers, born after the WWII, were approaching their 50s – time to prepare the retirement and decide how to spend the free time and (often generous) lifetime savings. Baby-boomers are generally wealthy, they travel a lot, with the age they become more willing to discover new countries and suddenly find strength to sympathize and empathize with the poor.
Compte-rendu de la mini-conférence du 13/12/2012
Résumé par Laurence Attuel-Mendès, membre de la Chaire.
Ouverture de la conférence et accueil des participants par Hayyan Alia, assistant de recherche au Groupe ESC Dijon Bourgogne.
Présentation rapide de la chaire Banque Populaire en Microfinance et de la miniconférence par Djamchid Assadi.
Djamchid Assadi, professeur chercheur au Groupe ESC Dijon Bourgogne, a effectué une présentation sur les alternatives de développement local : complémentarité et conflit. Le chercheur de la chaire a expliqué la question du développement local – qu’il a intitulé sous le néologisme « localopment », tout d'abord en commençant par expliquer l’évolution du concept local, de la géographie jusqu’à l'économie en passant par la culture et le lieu de vie. Il a ensuite rappelé que l'étude de la stratégie des acteurs est habituellement laissée de côté ; d'où l'intérêt de la présente recherche en considérant trois grands acteurs : l'État, le secteur privé, les coopératives. Ces trois acteurs peuvent intervenir sous deux grands types de gouvernance économique : marché et planification. Il a mis ces questions en perspective avec le concept de slow money.
Frédéric Lanet, directeur adjoint de l'AIRDIE et Jean-Louis Borios, sous-directeur du réseau Banque Populaire du Sud, ont effectué une présentation sur la finance solidaire locale : le cas d'un partenariat innovant entre Banque Populaire du sud et AIRDIE. Ils ont présenté un exemple concret de partenariat existant depuis 2003 et développé depuis 2007. L'association contient dans sa gouvernance de financeur solidaire des collectivités territoriales et des partenaires privés tels que la Banque populaire ou la caisse d'épargne. En 2010, une convention de mécénat a été signée entre la Banque Populaire du Sud, l'AIRDIE et France Active. Une enveloppe de crédit de 250 k€ ont été donnés initialement au projet, mais a vite été dépassée par le succès du projet. Tous les prêts consentis bénéficient de la garantie France Active. L'effet levier d'une garantie bancaire a été expliqué atteignant un multiplicateur de 10. Une habitude s'est instaurée de renvoyer les clients de la Banque Populaire vers des conseillers AIRDIE s'ils ne sont pas éligibles à un crédit classique. Toutes les deux semaines un comité composé d'environ 10 personnes venant de tous horizons étudient une quinzaine de dossiers. Différents critères sont employés, tenant au parcours professionnel notamment, ce qui est très nettement mis en valeur dans la prise de décision, mais aussi plus classiquement relatifs à la concurrence, au marché, à la rentabilité… Ceci constitue la principale compétence et valeur ajoutée de l'AIRDIE. À ce jour, près de 850 porteurs de projets ont été financés, plus 11.7 millions d'euros de crédits ont été réalisés depuis 2005, près de 80% des dossiers sont sans problème et on constate moins de 2.3% de pertes. Le taux de pérennité à 3 ans des entreprises financées par l'AIRDIE au niveau national est de 79%, contre 73% au niveau local. Le taux fixe de départ dégressif est de 3.95% sur 5 ans en moyenne. Le volume annuel des prêts a atteint 2,8 millions d'euros en 2011. La BPSud est le premier partenaire privé à intervenir dans le fonds de garantie de France Active. Les deux intervenants ont clos leur présentation sur la présentation des risques à éviter (idées reçues, insuffisance de suivi des créateurs et/ou de réactivité, la disparition des financements publics) et des facteurs de réussite (intervention de la banque comme un banquier traditionnel, une volonté réelle des deux parties, une collaboration active de l'AIRDIE et de la Banque Populaire du Sud, notamment au niveau des chargés de clientèle).
A recent news item reminds us that MFIs in India are still lobbying to have a greater spread. The news item also indicates that banks are raising interest rates to MFIs.
First, it is good that the regulator has intervened. When an industry starts, it is normal that there are no regulatory constraints. But once it impacts millions, it is normal that there is control over sharks who would bring the microfinance industry a bad name.
Second, the exact size of the spread is a matter of pork barrel politics between organized industry lobbies represented by MFIN in India, and the poor borrower represented by a few lonesome cowboy NGOs, academics and journalists.
Third, if banks charge higher interest rates to MFIs, they are finally pushing up interest rates to the poor because the MFIs margin is tight. This sharing of what the market can bear depends upon countervailing power not only between the banks and the MFIs, but between the banks and their MFI partners (who could be compensated in other ways) on the one hand, and the poor borrowers on the other. Therefore, if banks charge more to MFIs than similar loans to other high risk priority sectors, then such loans should not be included in their priority sector portfolio.
Finally, the behavior of banks brings us back to our research on suicides and microfinance: we found higher and more significant correlations between bank based SHG lending than between Microfinance institutions based lending and suicides. We are not suggesting causation: neither that bank lending causes suicides nor that suicides cause banks to lend. But there is smoke on the water http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1715442
Burgundy School of Business, Dijon, France
Axylia conseil has just come out with a new brochure publication: La finance altruiste à la conquette de l'Europe.
They find that European financial products provide 84.15 million of Euros to charity.
They divide finance linked donations into four products
* Bank Card based donations (11 million Euros of charity in the EU)
* Special Pass books and Accounts (Livrets et comptes): (5 million Euros of charity in the EU)
* Investment funds based: (68 million Euros of charity in the EU)
* Life-insurance based (0.15 million Euros of charity in the EU)
For more details, please see their website http://www.axylia.com/siteweb/publications.html This could be interesting for researchers on gifts (dons contre dons, etc) to comment on the different types of products and the difference in profile of the people giving differently.
We know that much of microfinance was initiated through charity moving up to provide responsibility to the recipient.
Do we need to come back to charity? Under what conditions?