Archive for: Regions

This is the final post in the short series on microfinance in Russia. You can find the previous two posts here and here.

In the two previous blog posts on this topic, we wrote on the situation with exorbitant interest rates charged by a few Russian commercial lending companies calling themselves “microlenders” (though we prefer to label them “payday lenders”).  We also shared suggestions from the Russian MFI community to the Russian regulatory authorities, which have been favorably received.

Certainly, Russia is not alone facing this issue; there are many other countries struggling with the question whether it is possible to draw a meaningful line between “justifiable” and “exploitative” interest rates – in other words, trying to answer the question “how much is too much?” The question has enormous political as well as operational relevance.  In this final post of the series, we would like to explore the issue by going back to the basics of what can – and should – go into setting the price of a loan. Read the rest of this page »

With around 20 million borrower accounts estimated for March 2012, India still has one of the largest microfinance industries in the world – even though the number is much lower than 32 million in October 2010 when the microfinance crisis began.  However, in March 2012 it also had the dubious distinction of having perhaps the worst portfolio quality in the world (at the national level).  Since October 2010 commercial bank lending to MFIs, which made up over 70% of their funding, has been consistently drying up mainly because of perceived political risk. Read the rest of this page »

This post kicks-off a three-part series on Russia’s financial inclusion space. This short series will feature prominent voices from Russia’s microfinance industry and discuss new developments and implications for the global industry as a whole.

Just as the dust settled after a controversial entrance of new players in the Russian microfinance sector about a year ago – those claiming themselves to be ”microfinance organizations”  and yet charging 730% interest per annum, another “innovative microfinance” product has totally shocked visitors of the Russian Post, as reflected in a multitude of blogs and in numerous media articles published in recent weeks.  Promotional booklets found in post offices in several major Russian cities were advertising microloans in the amounts starting from $100 that, if taken for one week, would cost 2772% p. a. (and a “special offer for low-income pensioners” – at 2598%).  The largest amount of 5000 rubles (about $167), for a one-month term, is offered at a “mere” 720%. Read the rest of this page »

For the Arab World, 2011 was historic. The Arab Spring, ignited in Tunisia, quickly spread to Egypt, Libya, Syria and other Arab countries.  The year brought much hope and a sense of opportunity as Arabs from the Atlantic Ocean to the Arabian Gulf saw the possibility of a future without dictatorship, corruption and hypocrisy – the reasons underlying the poverty, unemployment, and political grievances which sparked the Arab Spring. Read the rest of this page »

The Water Dragon symbolizes new frontiers, changes and innovations. This could be good news for financial inclusion in China and the rest of the region.

East Asia and the Pacific host a variety of countries when it comes to financial inclusion. South Korea and Singapore boast excellent levels of financial inclusion whereas countries like Indonesia, the Philippines, or Vietnam still show limited access to the variety of services the poor need to manage their financial lives. I can see two challenges and opportunities in the region for the coming year. Read the rest of this page »

Sub-Saharan Africa (SSA) continues to be a region plagued with challenges but ripe with opportunities in microfinance. Just one in five households has access to formal financial services, with high operating expenses as well as a general lack of financial infrastructure, supervisory frameworks or consumer protection plans being just a few of the stumbling blocks to greater financial inclusion. Read the rest of this page »

The year 2011 was not particularly easy for microfinance institutions (MFIs) in Eastern Europe and Central Asia (ECA).  Though overall many managed to overcome crisis, many MFIs have not yet returned to their pre-crisis growth rates, and delinquency levels were still higher last year than in 2007. One of the issues commonly faced has been client over-indebtedness in the most saturated markets, such as Azerbaijan, Read the rest of this page »

2011 was not a good year to be in the headlines in microfinance. So for Latin America flying under the radar last year was probably more good luck than bad publicity. However, in 2012 with the focus shifting away from “hot-spots” and yes/no debates on microfinance, and hopefully towards greater product diversity and complete financial ecosystems, Latin America is poised to assume a leadership role. Over the next year we hope to see three key developments within the region in financial inclusion.

A seat at the table for the non-banks
Latin America’s well-developed infrastructure, growing consumer base, and urban populations set a promising scenario for new financial services and products. And with millions of citizens leaving poverty en masse in countries like Brazil, Peru, and Mexico, the time is ripe for fresh innovations. Interesting and promising advances in markets such as Colombia, Peru, and Brazil showcase products that may reach the poor with new financial services. However, the financial sector in Latin America remains bank-heavy, and banks for the most part still find it hard to justify a move to serving mass markets, which has resulted in a slow start for most markets throughout the region. Read the rest of this page »

In some parts of South Asia there is a long standing tradition of accumulating gold as a preferred form of saving. Acquiring gold allows small amounts to be accumulated at different intervals; it is not easily lost or destroyed; it is small and lightweight compared to its value; and it is easily divisible into small units which can be sold off as needed. Gold is often worn as decorative jewelry by women, and is passed on from one generation to the next. Given that it can be easily liquidated, though often with the risk of considerable loss, jewelry shops and pawnbrokers do brisk business in buying or pawning gold. Read the rest of this page »

In January 2005, the Ministry of Planning and International Cooperation (MoPIC) in Jordan formed a Microfinance Committee to prepare, with technical support from CGAP and through a consultative and participatory process, the first national strategy for microfinance in the Arab world. The strategy document which was ratified by the cabinet, included working plans and development strategies for the microfinance sector in Jordan for the decade ending 2010. It also specified the roles of the main players in the sector such as MFIs, the government, NGOs, commercial banks, and donors. Read the rest of this page »