MICROFINANCE PAPER WRAP-UP: “Analysis of the Strategy of #Microfinance for Financial Inclusion of Refugees,” published by the European Microfinance Network

Turkey is host to an estimated 4 million refugees, more than are living in any other country. This paper assesses “the feasibility of microfinance as an appropriate strategy for the financial inclusion of refugees in Turkey.” The authors identify some of the risks of lending to refugee populations and steps that can be taken to mitigate them. Borrowed funds may be used for unapproved purposes such as to repay other debts. This may be mitigated by visiting the borrower’s place of work to assess how the credit is to be used. Excluding local residents from lending programs can create resentment. This may be mitigated by issuing loans to groups whose members span both the local and refugee populations. Refugees may move away, making recovery of loan repayments more challenging. This can be mitigated by assessing a loan applicant’s level of integration into the local community.

MICROCAPITAL BRIEF: The Philippines Passes Law to Encourage Islamic Finance

President Rodrigo Duterte of the Philippines recently signed a law mandating Bangko Sentral ng Pilipinas (BSP), the nation’s central bank, to provide for the regulation and supervision of Islamic banks. An Interagency Working Group on Islamic Banking and Finance will work to develop a regulatory framework, which is intended to expand the number of banks in the country that operate in accordance with Shariah principles.

MICROCAPITAL BRIEF: Blossom Finance Launches Shariah-compliant #Microfinance #Fund to Invest in BMT Microfinance Institutions in #Indonesia via PBMT Ventura

US-based Blossom Finance recently launched a fund that will lend local-currency on the Indonesian island of Java via Permodalan BMT (PBMT) Ventura. Baitul Maal wat Tamwil (BMTs) are financial institutions that follow Shariah law. They provide savings and loan services primarily to people who do not use traditional banks. The new fund is Blossom’s first microfinance fund that is open to investment from the public. The minimum investment is USD 1,000, although US-based investors must be accredited before participation. Blossom is accepting investments into the fund in US dollars as well as the cryptocurrencies Bitcoin, Bitcoin Cash and Ethereum. In testing its platform since 2015, Blossom has generally returned investors annualized profits around 7% with terms of 6 to 12 months.

#MICROFINANCE EVENT: MENA Governance and Strategic Leadership #Seminar; March 7 – 9, 2017; Amman, Jordan

The goal of this event is to strengthen boards of directors of microfinance institutions in the Middle East and North Africa (MENA) region. The case studies include topics such as governance, risk management, client centricity, sustainable growth and operating in challenging environments. This event is organized by Calmeadow, the Center for Financial Inclusion (CFI) and Sanabel. Calmeadow is a Canada-based NGO with 30 years of experience in financial inclusion and corporate governance initiatives. CFI brings eight years of experience in risk management and governance. Sanabel is a microfinance network with 90 members which serve a total of approximately 1.6 million clients in 13 Arab countries.

#MICROCAPITAL #BRIEF: Islamic Development Bank’s ICD, #Gabon’s #CDC to #Launch #Fund #Aimed at #Growing #SMEs in #Central #Africa

The Islamic Corporation for the Development of the Private Sector (ICD), a development finance institution of the Saudi Arabia-based Islamic Development Bank (IsDB) and the Caisse des Dépôts et Consignations Deposit (CDC), a financial institution backed by the government of Gabon, recently announced that they have signed a memorandum of understanding for the creation of a private equity fund to support small and medium-sized enterprises (SMEs) in Gabon and elsewhere in Central Africa.The goal of the fund is to foster the growth of SMEs that have been ill-served by banks and thus to grow the region’s economy as a whole.
As of October 13, 2015, ICD reported total assets of USD 1.7 billion and annual income of USD 97 million. No financial information for CDC is available. CDC has a balance sheet of XAF 195 billion (approximately USD 315 million).

MICROFINANCE EVENT: Executive #Forum: Financial Inclusion and Islamic Finance, November 11-16, 2016, Kuala Lumpur, #Malaysia

The Financial Inclusion and Islamic Finance Forum is scheduled to take place in Kuala Lumpur between the 11th and 16th of November. The event is hosted by the IFSB, a Malaysia-based standard-setting organization that issues guiding principles for banking, capital markets and the insurance sectors. The other host is the International Centre for Education in Islamic Finance, a university also based in Malaysia and centered around the Islamic finance industry. The standard fees to attend are USD 1,200 if registering by November 2, 2016, and USD 1,500 if registering after.

MICROFINANCE EVENT: Islamic #Microfinance #Summit, September 26-27, 2016, Dubai, United Arab Emirates

The Islamic Microfinance Summit takes place on September 26-27, 2016 in Dubai and is organized by Uniglobal, a Prague-based provider of workshops and conferences. The theme of this conference is "raising awareness and ensuring compliant and targeted product development to aid poverty alleviation." Its goal is to promote Islamic microfinance, particularly to the international donor community.

Central Bank of Nigeria (CBN) Releases Categorization System for “Non-interest Islamic Microfinance Banks”

The Central Bank of Nigeria (CBN) recently released a new categorization system for "Non-Interest Islamic Microfinance Banks" (NIMFBs). CBN organized NIMFBs into three categories: "Unit", "state" and "national". Unit NIMFBs must have a minimum capital of NGN 20 million (USD 71,000) and may open one branch location within the same municipality as the organization’s headquarters. State NIMFBs may operate in one state if they maintain minimum capital of NGN 200 million (USD 350,000). Institutions in this category may open multiple branches in the state within which their headquarters are registered. A national NIMFB is permitted to operate in any state or territory of Nigeria so long as it holds NGN 2 billion (USD 7 million) in capital.

#Microfinance Institution Alif Capital of Tajikistan Receives Banking License

Alif Capital has been approved by the National Bank of Tajikistan to provide banking services in both hard currency and somoni, the currency of Tajikistan. Alif Capital is marketed as the first regulated microfinance institution in Tajikistan that offers Sharia-compliant finance. Its loan terms vary from four to six months, with an average size of $4,000 as of 2015.

MICROCAPITAL BRIEF: Dahabshiil’s “MicroDahab”, SolarGen Technologies Announce “Lease to Purchase” Energy Product for Low-Income Somali Farmers, Small-scale Entrepreneurs in Somalia

MicroDahab MFI, the microfinance subsidiary and corporate social responsibility initiative of the United Arab Emirates-based conglomerate Dahabshiil Group; and SolarGen Technologies, a Somalia-based distributor of renewable energy technologies, have announced a joint energy project in Somalia. The project will allow low-income Somali farmers and entrepreneurs to acquire a “solar-powered water pump” under a “lease to purchase” agreement. The African Enterprise Challenge Fund (AECF), a Kenya-based fund that promotes for-profit enterprises operating in Africa, has provided unspecified support to the initiative. MicroDahab will bear both the capital cost and risk of asset ownership, while its clients reap the benefits of using the water pumps, at minimal rents.

MICROFINANCE PAPER WRAP-UP: “Global Financial Development Report 2015/2016,” Published by the World Bank

The “Global Financial Development Report 2015/2016,” published by the World Bank in September 2015 presents how long-term finance may lead to growth and prosperity in developing economies, based on research and analysis of the global financial services market and in addition recommends policies that the authors believe would increase it. According to the report, the use of long-term finance, which is defined having a time horizon exceeding one year, is more restricted in developing countries, especially for smaller firms and poorer households. The availability of equity is limited for firms of all sizes. In addition, the 2008 financial downturn reduced leverage by 0.3 percent for large firms and 1.56 percent for small and medium-sized firms.

MICROFINANCE EVENT: Arab Gulf Fund Program for Development (AGFUND) to Co-Host 18th Microcredit Summit, “Frontier Innovations in Financial Inclusion,” March 15-17, 2016, Abu Dhabi, United Arab Emirates

The 18th Microcredit Summit, “Frontier Innovations in Financial Inclusion” will be held in Abu Dhabi, United Arab Emirates on March 15-17, 2016. The objective of the event is to provide a platform for participants to discuss financial inclusion policies, regulatory frameworks, resilience and empowerment solutions, microfinance products, and synergies with the aim of promoting social inclusion for all. The conference will address themes: (1) “National Financial Inclusion Strategies;” (2) “Pathways to Social & Financial Inclusion;” and (3) “Partnerships that Build Bridges to New Frontiers.” Additional information is available on the event website http://18microcreditsummit.org/.

MICROCAPITAL BRIEF: FinMark Trust, Centre for Financial Regulation & Inclusion, The MasterCard Foundation to Create “insight2impact” Data Facility to Assess Banking Needs of Poor People

The FinMark Trust, a nonprofit that promotes financial inclusion and regional financial integration; the Centre for Financial Regulation & Inclusion (CENFRI), a nonprofit affiliated with FinMark Trust; and The MasterCard Foundation, a Canadian organization founded by the US-based payments firm MasterCard, recently have announced that they will launch a joint data facility named “insight2impact” (i2i). The facility, which is expected to have a budget of USD 9.6 million, is intended to assist financial services providers in assessing the financial needs of low-income populations.

MICROFINANCE PUBLICATION ROUND-UP: Islamic Banking and Growth; Sharia-Compliant Microfinance Products; Islamic Financial Services in Yemen

The paper “Is Islamic Banking Good for Growth?”; by Patrick Imam and Kangni Kpodar analyzes the relationship between the development of Islamic banking and economic growth in low- and middle-income countries. The focus note “Costs and Sustainability of Sharia-Compliant Microfinance Products” by Mayada El-Zoghbi and Kaylene Alvarez assesses the operational costs, overall cost structures and business models of Sharia-compliant financial service providers (FSPs). The paper “Islamic Microfinance in Yemen: Challenges and Opportunities;” by Ali Saleh Alshebami and Dr DM Khandare reviews the Islamic banking sector in Yemen from 1997 to 2013, identifying challenges to the implementation of Islamic banking practices in the country.

SPECIAL REPORT: On Financial Stability, Inclusion, Exclusion and “Big Mistakes”

Timothy Lyman of CGAP (Consultative Group to Assist the Poor) discussed the interactions among financial inclusion, financial stability, financial integrity (anti-crime) and consumer protection (I-SIP). Referring to previous work by the International Monetary Fund, he said the idea that financial inclusion supports the other three long-term and vice versa is supported by a growing body of research. On the other hand, the message is decidedly not that financial inclusion equals stability. The reality is highly nuanced. Adalbert Winkler of the Frankfurt School of Finance & Management shared his research, which also revealed mixed signals regarding whether financial inclusion supports financial stability.

MICROFINANCE EVENT: Triple Bottom Line Investing Presents ‘TBLI Conference Europe 2015’, November 19-20, Zurich, Switzerland

The TBLI Conference Europe 2015 is going to take place at the Gottlieb Duttweiler Institute in Zurich on November 19-20, 2015. The cost of the event is CHF 625 (USD 639). A set of three private meetings with potential investors and business partners is available for an additional fee of CHF 500 (USD 511). Additional meetings can be booked at CHF 150 (USD 154) each. TBLI Conference offers a series of presentations and workshops that focus on environment, social, governance (ESG) and impact investing topics. This year’s conference will focus on ESG and impact investing across asset classes. Find more information on http://www.tbligroup.com/tbliconference/europe2015.html.

MICROFINANCE EVENT: Women’s World Banking (WWB) Presents Making Finance Work for Women Summit, November 11-12, 2015, Berlin, Germany

The event "Women’s World Banking (WWB) Presents Making Finance Work for Women Summit, November 11-12, 2015, Berlin, Germany" is going to take place on November 11-12, 2015 in Berlin, Germany. The Making Finance Work for Women Summit is a two-day event that will focus on how women’s access to financial services relates to economic opportunity and macroeconomic growth. Sessions will cover best practices to serve the women’s market for financial services. The fee to attend the event is USD 500.Find more information on http://www.womensworldbanking.org/summit/.

MICROCAPITAL BRIEF: World Economic Forum (WEF) Leaders Aim for Cooperation among Regulators for Financial Inclusion in Africa

During the World Economic Forum (WEF) in South Africa in June, business and political leaders from multiple African countries including Kenya, Nigeria, and South Africa among others, have emphasized the need for collaboration between regulators in order to promote financial inclusion globally. Nigeria’s minister of Finance, Ngozi Okonjo Iweala stressed the need for cooperation between banking and telecommunication regulators to contribute to further financial inclusion through the use of mobile banking. One of the stated goals of those advocating for financial inclusion is for individuals to keep their money within the formal financial system instead of holding it in cash.

MICROCAPITAL BRIEF: Silatech Develops Crowdfunding Website Narwi for Shariah-Compliant Microfinance in Middle East, North Africa

Silatech, a Qatar-based social enterprise aiming to increase employment and entrepreneurship among youth in the Middle East and North Africa, recently announced the development of Narwi, a nonprofit crowdfunding platform that will support microentrepreneurs via Islamic charitable giving. The platform is scheduled to be launched in late June 2015. Through Narwi, donors will be able to establish an endowment called a “Narwi Waqf” to fund microentrepreneurs with donations as small as USD 25. Projects featured by Narwi are sourced solely from lenders in Egypt, Iraq, Jordan, Lebanon, Palestine, Somalia and Yemen that are compliant with Shariah.

MICROFINANCE PUBLICATION ROUND-UP: Social Performance in Nepal, Sharia-Compliant Financial Inclusion, Private Sector Employment

The report “State of Social Performance in Nepal” from the US-based Microfinance Information Exchange (MIX) examines the social performance (SP) of microfinance institutions (MFIs) in Nepal. The report notes that the biggest SP management challenge facing the 37 Nepali MFIs is that of tracking outcomes related to institutions’ development goals. The report “Trends in Sharia-Compliant Financial Inclusion” presents an analysis of recent advancements in Sharia-compliant financial inclusion as well as challenges inhibiting its further expansion. Finding sustainable Islamic models could be the key to providing financial access to millions of poor Muslims. In the report “Private Sector Development Solutions – Jobs”, the International Finance Corporation (IFC) argues that good jobs provide a clear pathway out of poverty. Because 60 percent of the developing world’s current jobs are in micro-, small and medium-sized enterprises, the authors highlight the need for enhanced access to finance to allow for more investment and growth.

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