 One of the most popular programs for helping the world's poor has gone sour in India. Microcredit, the practice of making small loans to very poor people, grew into a multibillion-dollar business. But microfinance companies have been accused of predatory lending and collection practices so harsh that they drove some borrowers to suicide. One state government in India has enacted legislation that will, in effect, put the microlenders out of business.
The Golf Environment Organization's GEO Legacy Guidance launched to widespread acclaim following previews at the Asia Pacific Golf Summit in Bangkok and the European Golf Course Owners Association Conference in London.
Microfinance has lost its soul. Six fundamental shifts in the practice of microfinance have left it operating more like a for-profit bank and less like an innovative pro-poor movement.
The numbers of children experiencing consistent poverty increased last year for the first time since 2006, according to the State of the Nation’s Children report
Nobel Peace Prize laureate Muhammad Yunus is under pressure after critics accused him of misusing development aid. The father of microfinance told SPIEGEL ONLINE the allegations are "a total fabrication."
 The Nigeria Deposit Insurance Corporation , NDIC, has commenced the compilation of the list of Managing Directors and top management staff of the failed microfinance banks whose licences were recently withdrawn by the Central Bank of Nigeria, CBN, with a view to prosecuting them.
The Group of 20 Summit scheduled for November in Seoul will provide a forum for a wide range of economic and fiscal issues, ranging from World Bank governance to fossil fuel subsidies.
Capping microfinance interest rates will hurt the poor. There are better ways to regulate the industry.
 Opportunity co-founder and former president of Bristol Myers International Corporation, the late Al Whittaker, encountered poverty as he travelled throughout the world in the 1960’s and 70’s. He asked the people he met: “What do you need?” They replied: "Work. With jobs, we will solve our own problems."
India’s microfinance industry has warned it is being pushed to the brink of collapse, as a result of a bank freeze on credit to microlenders triggered by a political crackdown.
India’s commercial banks, which normally provide about $133m a week in credit to the microloan industry, have frozen those disbursals for the past two weeks, as companies wrestle with a backlash in one of their biggest markets, the state of Andhra Pradesh.
Why the time is right for sustainable thinking by pension funds and institutional investors:
When Roger Urwin, global head of investment content at Towers Watson, the investment consultant, turns his mind to a subject, the pensions world listens. Urwin, one of the most influential investment advisors around, has worked with many of the world’s largest retirement schemes. His recent attention to the theme of sustainable investing is notable because of his experience in the reality of pension fund practice and governance.
 IFC, a member of the World Bank Group, will work with Bank Constanta to improve its risk management practices, which will help the bank increase lending to smaller businesses in Georgia. This initiative is part of a broader IFC strategy to strengthen local banks in the aftermath of the global financial crisis.
On August 30, 2010, Brian Cox, the president of MFX Solutions LLC, a company which offers currency hedging instruments, highlighted several emerging challenges that microfinance institutions (MFIs) face as they expand such as currency risks, tighter regulation, and tougher capital adequacy requirements.
Nigeria's microfinance sector has failed to make the expected impact on the economy due to misconception by the operators, but this will soon change.
A group of financial experts has ordered all commercial banks in the Central African Economic and Monetary Community, CEMAC, to raise the minimum amount of their capital reserves.
Highlighting the vast untapped potential of the sector, SBP acting governor said that Pakistan is among the few countries in the world where microfinance activities have been gradually mainstreamed into the formal financial system.
This AfricaFocus contains a diverse selection of recent books likely to be of interest and new to AfricaFocus readers. You will find, for example, new books by Africa's distinguished elders, such as Achebe, wa Thiong'o, and Mandela. Selected new books from publishers such as Africa World Press, HSRC Press, and Aflame Books. Books on topical themes such as SMS activism and other ICT developments, on India and China's relations with Africa, and on xenophobia and migration. And more.
Mobile payment users worldwide are forecast to increase 2.1 percent to 109 million by the end of 2010, a US-based research
firm said in a report.
Matthias Omeh, president, National Association of Microfinance Banks (NAMB), on Monday advised microfinance banks to partner with credit bureaux to ascertain the status of their customers.
Central Bank authorities from eight developing countries (D-8) including Nigeria, Bangladesh, Egypt, Indonesia, Iran, Malaysia, Pakistan and Turkey yesterday agreed to foster collaboration among member countries for the purpose of monetary, fiscal stability and development of member nations.
With hundreds of fledgling entrepreneurs ready to change the world and maybe make millions while they do it, the buzz around the microfinance industry looks a bit like the dot-com boom at the end of the ’90s.
With only five years left until the target date for the Millennium Development Goals (MDGs), the United Nations has launched the MDG Report 2010 calling for accelerated progress to reach the 2015 deadline. As the UN Specialized Agency for Tourism, UNWTO is firmly committed to fostering the tourism sector’s contribution to development.
With global markets still recovering from the 2008 financial crisis and the reputation of many traditional financial instruments tarnished, investments in microfinance institutions (MFIs) have emerged as a promising option. The basic business model of microfinance focuses on creating sustainable long-term economic value for all stakeholders. Leading MFIs are characterized by high portfolio quality and strong profitability and operate in a market with many still-to-be-realized opportunities.
World leaders put the finishing touches on plans to build a more stable global economy on Sunday but backed away from one-size-fits-all pledges as two years of crisis give way to an uneven recovery.
Asian currencies dropped this week, led by South Korea’s won, as concern Europe’s debt crisis will worsen outweighed the benefits to the region of China’s decision to end the yuan’s two-year peg.
As world leaders gather for the G8 summit in Canada, Machrine Birungi visits Francis Kamara at his farm in Uganda to see if the promises made at Gleneagles in 2005 have benefitted him and his country.
As Dr. Evil learned in the Austin Powers movies, $1 billion isn't quite what it used to be. The upcoming G8 and G-20 summits in Toronto are expected to top $1 billion in costs. At such a large price tag, it's reasonable to ask if the meetings are worth it. But former top White House aides say that even with the hefty price, the meetings more than pay for themselves in both tangible and intangible ways.
Business confidence fell unexpectedly in the second quarter of this year, led by a plunge in retail trade and the vehicle industry and suggesting that economic growth has slowed, a leading survey showed yesterday.
Lack of sufficient capital to support Small Medium Enterprise (SMEs) is said be responsible for the failure of microfinance banks in the country, just as the management of TechnoGlass Industries Limited(TGI) lamented the huge monthly electricity bill paid to Power Holding Company of Nigeria (PHCN) without getting the desired services from PHCN.
Despite the challenges that the board and management of Integrated Microfinance Bank, IMFB, have been faced with, it is determined to come out stronger and bigger. In this interview, IMFB's Managing Director, Mr. Adamu Ibrahim, takes us through the events of the past 9 months, steps being taken to regain public confidence and the recent injection of funds by an investor.
The Central Bank of Nigeria (CBN) is set to increase the minimum paid-up capital of Unit Micro-Finance Banks (MFBs) by 500 per cent to N100 million. It also increased that of State MFBs by 100 per cent to N2 billion. Under the micro-finance bank policy introduced in 2006, there are two categories of MFBs -State MFBs and Unit MFBs.
Microfinance, perhaps best known as a means of helping small business owners in developing countries move out of poverty, is one source already in place in the United States. These organizations make small loans and other financial services available to low- and moderate-income businesses.
At the fourth Microfinance Conference in Abuja, Nigeria, the governor of the Central Bank of Nigeria (CBN), Mr Mallam Sanusi Lamido Sanusi, announced that all microfinance bank CEOs would be required to pass a CBN administered exam in order to continue managing their banks. A training program will be held during the first quarter of this year, with certificates being issued at the end of the exercise. Any bank that does not comply with the rules will have its license withdrawn.
Kiva.org -- the world's first person-to-person micro-lending website -- has launched a pilot expansion in the United States, allowing individuals anywhere to make small loans to U.S. entrepreneurs through the Kiva.org website.
There is a banker who is still feted across the world, collecting accolades and honours wherever he goes. The institution he founded more than 20 years ago is unscathed by the current financial crisis, and his opinion is more sought after than ever before as politicians and economists desperately try to fix our bankrupt system. Muhammad Yunus is to economic development what Nelson Mandela is to world peace.
The urgency with which the Obama administration, members of Congress, and Federal Reserve Chairman Ben Bernanke have been working to keep credit available reminds us how critical credit is to the economy. These folks know that without widely available credit, our economy would descend into a debilitating depression.
International financiers ramped up efforts to stave off economic recession in Africa with the establishment of a $15 billion fund to support small and medium-sized enterprises that have been the main drivers of growth in the continent over the past decade. The fund, an initiative of the African Development Bank (AfDB), the French Development Agency (AFD), and Development Bank of Southern Africa, will support intra-Africa trade, boost lending to agribusiness, and finance key infrastructure that supports businesses across the continent.
Microfinance has proven itself so far to be very resilient to what is happening globally, and its clients are not necessarily experiencing anything that is correlated to the events in the US, Bob Annibale, Global Head of Microfinance at Citigroup said on Tuesday.
The essence of microfinance and its correlation with poverty alleviation was discussed at the inauguration of the international conference on ‘Microfinance for Inclusive Development and Sustainable Growth’, held today at the Centre for Banking Studies, Colombo.
Poverty alleviation in Sri Lanka has been a top priority of governments since Independence itself, said Deputy Governor of Central Bank W.A. Wijewardane, stating that Sri Lanka has achieved a decline in poverty levels from 20% in 2003 to 15% in 2007. “This has been a major feat for Sri Lanka as poverty signifies social harm and impairment. Our top most achievement should be to kill the absolute poverty line in the future,” he said.
The G-20 agreement is a historic and watershed achievement in international development. Leaders from developed and developing countries got together and reaffirmed the interconnectedness of the global economy and individuals around the world. These leaders jointly agreed to tackle economic problems around the world with same strategies and expected outcomes. The Agreement is a good first step. However, Africa and other poor regions of the world still face significant economic and development challenges. The agreement falls short in addressing these challenges.
U.S. President Barack Obama gave a spirited defense of his economic strategy on Tuesday, saying there were signs of progress in battling the recession, but "by no means are we out of the woods just yet."
In his most comprehensive speech on the U.S. economic downturn, now in its 16 month, Obama offered no new policies but gave a detailed review of the steps he has taken to rescue the economy and rebuffed critics who say he is spending with "reckless abandon."
Russia will ask the International Monetary Fund (IMF) to carry out a study on the potential for a new international reserve currency, Kremlin aide Arkady Dvorkovich said on Tuesday. China and Russia, the world's No.1 and No.3 reserve holders, have been pushing for a discussion on making greater use of the International Monetary Fund's Special Drawing Rights basket.
The man who helped Thailand survive the Asian financial crisis says reforms a decade ago have made the region's banks better able to weather the global economic downturn. Former Finance Minister Tarrin Nimmanahaeminda also gave his endorsement to banking-reform programs planned by the United States and G-20 nations.
Jamie Bedson, lead coordinator at the Banking With The Poor Network Secretariat, in Singapore, told Connect Asia's Sen Lam that about 91 microfinance funds lend out money across Asia.
Jeffrey Sachs, director of the Earth Institute and economics professor at Columbia University reacts to the decisions made at this week's G20 summit and answers questions on the plight of poor countries in the midst of the global economic crisis: "There is considerable work to do still to put the urgent concerns of the poor countries on the world's agenda." "There is a real possibility of rising political instability in many countries, including street violence, coups, assassinations, or political paralysis."
Cloud-computing technology has come along way. For example a single server can host several virtual servers on one machine. That is a simple example of cloud-computing. Cloud-computing is when any virtualised resources are provided as a service. This is expected to become a huge industry. And this is now concerning the Microfinance Institutions.
President Barack Obama wrapped up his first international summit by declaring the event “historic” and a “turning point” toward recovery from a worldwide recession. Obama, who used personal diplomacy to help push through an agreement on regulations and emergency aid, said he and his counterparts at the Group of 20 summit are taking “unprecedented steps” to prevent another financial crisis.
G20 media reaction is a mixture of cautious optimism and scepticism.
Cambodian microfinance institutions say economic crisis is taking its toll on the MFI sector and increasing the number of nonperforming loans to more than 1 percent. Microfinance lenders say the economic crisis is leading to higher rates of nonperforming loans in 2009. Last year, bad loans were just 0.67 percent of total lending.
This week's G-20 summit is essentially an echo chamber for the world's wealthy to talk macrofinance. The world economy might rebound more quickly if they listen to what the poor have to say about microfinance.
The combined effects of the financial crisis, increased protectionist policies, continued rich country subsidies, and climate-induced changes in patterns of agricultural production are likely to hit developing countries hardest.
Thanks to the confluence of these factors, a long-term solution to the global food crisis has not been reached, experts agreed at two recent summits on agriculture. But producers in some poor countries that lack strong links to the international market may not yet be feeling the full effects of that price drop. In some cases, particularly in Sub-Saharan Africa, prices remain high for key staples.
As G20 leaders gather in London on 2 April, the focus of their agenda will be on working together to promote effective, coordinated responses to the global economic crisis and to the state of global trade. In the context of the crisis, the immediate priority of many governments and trade experts is rightly to create and implement a strategy that will offset declining trade and investment, particularly in developing countries where the crisis threatens to impede economic growth and development progress made in recent years. In an effort to address these pressing issues and provide suggestions for G20 leaders’ deliberations, ICTSD partnered with the Global Economic Governance Programme (GEG) to gather short essays from a broad range of scholars and experts around the world.
Billionaire investor Gorge Soros has said the G20 summit will be a "make or break" event for the world's economy. He said the G20 meeting had to come up with concrete solutions to help the developing world in particular, which had been been worst hit.
A panel of experts set up by the United Nations has proposed creating a Global Economic Council tasked with promoting worldwide economic and financial cooperation, according to a draft panel report obtained by Kyodo News on Monday.
Microfinance ought to be high on the agenda of policymakers looking for an imaginative response to the global financial crisis.
As an ethical, responsible financial system that serves productive businesses through intimate knowledge of the client, it is founded upon principles that are diametrically opposed to those practiced by the conventional bankers that sparked the crisis. However bold the prescriptions of political leaders in the developed world may be, the fact remains that these economies are so saturated with excessive debt that it will be years before they generate the demand required to get the global economy moving again. That demand will have to come from elevating the world's poor. Microfinance, with its proven record and ethical purpose, is the key to that goal. The potential for growth among the poor is enormous. A responsible financial system that stimulates entrepreneurship at the bottom and earns income for the poorest is a benefit to us all.
Islamic banks are generally doing better in today’s uncertain economic times than their Western colleagues. So our financial institutions have a lot to adopt from Islamic economic system.
Nobel Peace Prize winner Muhammad Yunus from Bangladesh earlier this week made a valiant call for a bailout package for the world’s poor. At a recent meeting in Tokyo, the microfinance guru warned that the global economic crisis will hit the world’s poorest people the hardest and that “there is no bailout package for them.”
Forget multibillion-dollar bailouts. Muhammad Yunus thinks the solution to the global financial crisis can be found in loans of much smaller size, backed with more prosaic assets: ducks, chickens, and cows. Microcredit could soon spread across the stricken U.S. as big banks contract. On the strength of local invitations, Grameen is considering setting up shop in Washington, D.C., Baltimore, and Omaha, Neb., where Susan Buffett, daughter of resident sage Warren Buffett of Berkshire Hathaway approached the bank.
The effective collapse in 2008 of the US government-Wall Street-driven model of liberal capitalism is an event of major historical importance. As with the collapse of an earlier wall in 1989 – the Berlin Wall – transition to a new economic model is now required, and is indeed underway. The microfinance industry is in no less a need for radical change. This is because many of the flawed character traits that have ultimately destroyed Wall Street also lie at the heart of the increasingly commercialised microfinance industry. In a very uncomfortable parallel with the spectacular rise of Wall Street’s most hallowed institutions and individuals, now consigned to the grubby margins of business and economic history, careerism, personal greed and the related drive for profit have also blinded the microfinance industry to the fact that microfinance is ultimately destroying the goal of reducing poverty and promoting sustainable economic and social development.
The World Bank president has said that 2009 is turning into "a very dangerous year" for the economy. Robert Zoellick also warned G20 members against protectionist policies, ahead of a G20 finance ministers' meeting in the United Kingdom on how to tackle the economic downturn.
The global economy will shrink this year for the first time since the second world war as the "Great Recession" ravages businesses, consumers and financial institutions around the world, the International Monetary Fund warned. Speaking in Tanzania, IMF managing director Dominique Strauss-Kahn said the economic downturn would be more severe than previously thought.
If the Group of 20 leading and developing nations meeting in London this weekend pushes the food problem to the back burner to focus only on financial stabilization, the annual begging for emergency food aid -- the most expensive, least sustainable form of foreign aid -- will never end. And neither will the suffering.
Recently the EU has decided to tax such locations and even swiss banks would have to have taxes applied to them. This news is very recent and it is uncertain in which direction this news would take us. Nonetheless there are always banks out there such as in South America that are not subject to this rule.
More than 106 million of the world’s poorest families received a microloan in 2007, surpassing a goal set ten years earlier, according to a report released today by the Microcredit Summit Campaign. Microloans are used to help people living in extreme poverty start or expand a range of tiny businesses such as husking rice, selling tortillas, and delivering cell phone services to remote villages.
With more than half of the adult population unable to access retail banking services, the introduction of microfinance banking by the Central Bank of Nigeria (CBN) was welcomed by Nigeria’s development partners and the general populace.
In the fall of 2008, the US credit crunch ballooned into Wall Street’s biggest crisis since the Great Depression. In response, the US federal government adopted billion and trillion bailout plans meant to reassure the markets and get credit flowing again. But the crisis began to spread to Europe and to emerging markets, with governments scrambling to prop up banks, broaden guarantees for deposits and agree on a coordinated response.
Welcome to this blog about Microfinance, Innovations and Sustainable Development
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