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About Microfinance Pasifika
The Microfinance Pasifika Network is an alliance of institutions committed to supporting disadvantaged people in the Pacific to improve their quality of life, through the provision of inclusive and sustainable financial services such as savings, credit, remittances and payment services and insurance...News
IFC Launch Initiative to Help Expand Access to Finance for Microentrepreneurs in the Pacific
IFC, a member of the World Bank Group, today launched the Pacific Microfinance Initiative to improve access to basic financial services, particularly for women, rural households, and enterprises in Papua New Guinea, Timor-Leste, and the Pacific Islands.
PFIP: Will Kina Soon Go Digital? BPNG Hosts Mobile Money Workshop
Representatives from the Bank of Papua New Guinea (BPNG), commercial banks, Post PNG and other organizations gathered for a workshop last week in Port Moresby to discuss the regulatory implications of branchless banking. Sixty workshop participants spent the day learning about different mobile money transfer systems in operation around the world, including a mobile money pilot recently introduced in PNG.
PFIP : Focus Note01, Can Fiji’s MFIs Be Sustainable?: August 2010
“…Clients of MFIs, past and present, mostly believe they have benefited from their services.
This positive contribution has led many to overlook the failure of Fijian MFIs to become self-sufficient.
Fijian MFIs have faced considerable external constraints, including challenging geography, lack of technical support and funding constraints.
Stabilizing the MFIs involves a reorientation of their business model and incentive structures…..”
South Pacific Business Development (SPBD), Samoa Celebrates $30 milestone
Twenty nine thousand clients and $30million worth of investment were reasons enough for the South Pacific Business Development Programme to celebrate. The micro-finance organisation celebrated its 10th anniversary in Samoa last week
FDC Pacific Office Release Annual Report 2008-2009
FDC is proud to announce the publication of the FDC Pacific regional office Annual Report 2008-09.
Marcella Willis' Report on the Microfinance Investments In Asia Conference (26th - 27th January 2010)
Marcella Willis is the UNCDF Chief Technical Advisor for the Inclusive Finance for the Under-served Economy (INFUSE) programme in Timor-Leste. She recently attended the Microfinance Investments in Asia conference held in Singapore from 26th - 27th January 2010. She agreed to share her thoughts and experience with her microfinance colleagues in the Asia Pacific region.
There were about 150 participants, a mix of private sector investors and MF practitioners/service providers. Standard Charter Bank was a main supporter of the event (SC established a MF wholesale fund about 3 years ago). Others participants for example came from:
MF industry support networks: CGAP, MIX Market, Grameen Foundation, MF Associations, Planet Finance
MF practitioners: individual MFIs, support networks of MFIs like Accion, Plan Intl, Opportunity Intl
Multilaterals/bilaterals: WB, ADB, IFC, KfW, FMO
Investors: private financing/investment companies, MF Investment Vehicles such as Blue Orchard, Triodos, Advans, Unitus, Symbiotics, etc
The new ‘trend’ emerging seems to be that private equity/financing companies are looking to MF for their Socially Responsible Investment Portfolio. Some key events over the past few years have highlighted the MF industry for its capacity to deliver on both financial and social returns. (Yunus and the Nobel, the Year of Microcredit, the successful but controversial IPO of Compartamos in Mexico, etc). While there were only about 25 Microfinance Investment Vehicles (MIVs) 8-10 years ago, there are now more than 100. Also interesting was Symbiotics, who was also well represented there, and is a MIV brokerage firm established about 5 years ago and have just opened a Asia/Pacific regional office and source funds from 20+ MIVs to over 100 MFIs. Thus,highlighting the growing interest by private investors to channel their money into MF.
Because of this new, keen interest by the private equity firms to invest in viable MFIs, there can be a growing pressure on the MFIs to ensure a relatively high-net return at the expense of the social mission. Therefore, there was a lot of discussion about the ‘double bottom line’, and how to ensure that these can both be emphasized. Though the investors are less strict in requirements on reporting social impact after they have invested, the MF industry wants to ensure soundness of the social mission. Some of the key messages around this were to emphasize consumer protection measures, transparency, and financial education, to ensure that customers know what they are paying especially in a competitive market. Another key message was on preventing over-indebtedness of clients. In these areas the regulators could play a key role supporting both infrastructure such as establishing credit bureaus, and consumer protection. Some specific recommendations were that central banks should prohibit the use of flat interest rates and require publication of annual percentage rates rather than monthly.
There was some discussion around impact of MF in general and the challenges to confirm its long-term impact on poverty reduction, in particular noting many recent writings on this topic in the media and elsewhere for example if you are interested to look:
http://www.cgdev.org/content/publications/detail/1422302/
http://kristof.blogs.nytimes.com/2009/12/28/the-role-of-microfinance/
http://www.ft.com/cms/s/2/ae4211e8-dee7-11de-adff-00144feab49a.html
http://online.wsj.com/article/SB125012112518027581.html
However, there was only a bit of discussion on use of specific poverty measurement tools. Generally though the message was that it’s not been proven with hard data that MF reduces poverty, but evidence shows that MF is an important tool that helps people manage/control their lives and cope with poverty.
Where does the money come from for MF investment?
CGAP conducted a 2009 survey of 60 MIVs and found that globally, 48% funding for MF comes from donors and 52% from investors.
Symbiotics estimated that the current funding for financing and equity in MFIs is about:
42% from Institutional investors such as Foundations, NGOs, networks
34% from retail and high-net worth individuals
21% from DFIs (Development Finance Institutions such as UN, IFC, etc)
3% from specific MIVs
Generally though, Asia has not been investing a lot of money, though there is potential to harness this from both institutional and retail/individual investors.
In terms of accessing this type of investment financing and equity, of course many of the MIVs are currently in markets that have strong performance like E Europe and S. America, while looking to enter markets that promise lots of growth—namely China and India. Seems there is a lot of money chasing the large, 1st tier institutions while the smaller, newer ones will still rely on the ‘donor’ funding.
Please contact me at marcella.willis@undp.org if you have questions or would like more information.
For more information on the Microfinance Investments in Asia Conference, please click on the following link; http://www.hansonwade.com/events/microfinance-investments-in-asia/index.shtml