Research Insight Peru - Model Market for Microfinance

Size: px
Start display at page:

Download "Research Insight Peru - Model Market for Microfinance"

Transcription

1 Research Insight Peru - Model Market for Microfinance Research Insight is a publication of responsability research. At irregular intervals, responsability research conducts and compiles analyses, studies, and comments on countries, themes, companies, and commodities in responsability s areas of investment. March

2 The Role of Microfinance in Development By Christian Etzensperger, Senior Research Analyst After two decades of financial sector development in Peru, it is time to take stock. The Peruvian microfinance industry, centered on 40 regulated local banks, serves 3. million poor households at ever-decreasing costs. The sector has remained profitable while the level of interest rates has declined consistently. The rise of microfinance has been accompanied by a steady fall in official poverty rates as well as lower income inequality. The case of Peru underlines the argument that financial sector building is a necessary condition of economic development and suggests that microfinance plays a key role by offering opportunities to poor households. The open secret of Peruvian microfinance success, sound regulation and strict supervision, should spur imitation worldwide. As the advanced economies are going through a prolonged crisis, Peru is arguably the fastestgrowing economy in the Western hemisphere. Its poverty share is falling relentlessly. Consumer, financial, and labor markets are thriving. The democratic system works reasonably well. Twenty years ago, Peru was a broken country. Hyperinflation had wrecked the economy and pushed millions into poverty. Misguided government policies including zero cost credit programs heavily distorted markets, while terrorism ruled the countryside. Many factors led to this astonishingly positive development over the last two decades. The rise of microfinance was one of the stylized facts that accompanied the economic development of Peru. While the poverty incidence, which had risen to % by 2001, dropped to 30% in one decade, 1 microfinance gross loan portfolios grew fifteenfold (Figure 1) or by 31% annually. 2 Microfinance in Peru has roots going back to the 190s, but private-sector microfinance took off in the 1990s, boosted by a new policy framework of economic liberalization. The new framework built on the work of economist Hernando de Soto, laid out in his best-selling book The Other Path. 3 Its central message is that huge economic potential is locked away in informality. People need formal rights over their resources in order to control them. Moreover, in order to use the resources they control productively and to manage them effectively, people need access to finance. Figure 1: Microfinance growth in Peru [Billion USD] Gross Loan Portfolio Deposits Number of Borrowers Consequently, microfinance was very much the fertilizer that allowed growth in Peru to spread from a few mines 4 out to the masses. While the share of the population living on less than USD 2 per day was reduced by half, the Gini coefficient, a measure of income inequality, has also declined steadily. The degree of freedom provided by a variety of financial services (microloans, deposit accounts, money transfers, and others) allowed for self-employment on a large scale. Microfinance was probably not a fundamental cause of economic growth, but surely a means of dispersing, transforming, and catalyzing [People in millions] 1 Peruvian Institute of Statistics and Information (INEI) 2 Gross loan portfolio growth of regulated microfinance institutions. Sources: Superintendencia de Banca, Seguros y AFP (SBS) and Consorcio de Organizaciones Privadas de Promoción al Desarrollo de la Pequeña y Microempresa (COPEME) 3 El otro Sendero, by Hernando de Soto, Enrique Ghersi, and Mario Ghibellini, first published in 1986, reeditions in 1989, 2002, 2006, and 4 Peru is a world-leading producer of gold (6th), silver (1st), copper (2nd), zinc (2nd), lead (4th), tin (3rd), molybdenum (4th), rhenium (4th), bismuth (3rd), and arsenic trioxide (4th) (source: USGS). However, the 41 large mines provide only 47,00 jobs (source: INEI). IMF Article IV Report

3 GDP growth into broad prosperity and thus reducing poverty (Figure 2). Figure 2: Poverty reduction in Peru 6 The virtue of financial sectors Financial development is an indispensable condition for sustaining economic growth. Financial systems provide vital services: they evaluate, screen, and allocate capital, monitor the use of that capital, and facilitate transactions and risk management. If financial systems provide these services effectively, capital flows to the most promising firms, promoting and sustaining economic growth. 7 Any enterprise or household excluded from access to finance is severely impaired. This is a reality for 2. billion individuals in the world, 8 and 47% in Peru. 9 One should note that the distribution of the unbanked half of households is by no means even across the country, but heavily tilted to povertystricken areas, in particular in the countryside. People in such areas have been totally neglected by banks, on the premise that they lack the collateral or the wealth that would make them worthy banking clients. Consequently, banks would not provide financial access for poor households, excluding them from credit, savings accounts, insurance and transfer services. Furthermore, the capacity of small businesses to grow and the ability of households to save, manage risks, and smooth and diversify income and consumption, were all restricted. 6 INEI, Encuesta Nacional de Hogares Anual, 2001, 200, and 7 Ross Levine (2011) 8 2. billion according to CGAP (2009) and even slightly more according to the Financial Access Initiative in collaboration with McKinsey & Company (2009) 9 Microrate (2011) The innovation of microfinance Microfinance is the provision of financial services to low-income clients who traditionally lack access to financial services. The long-term goal is to build comprehensive financial sectors that provide a broad range of everyday financial products to all segments of society. 10 Microfinance requires a set of specialized tools to carry out the screening and monitoring of clients as well as to enforce repayment. Traditional banks require hard information such as audited statements, asset appraisals, tax receipts, and investment plans and use the threat of asset loss in cases of default. In contrast, a microfinance credit officer analyzes the cash flows generated by a household s (often numerous) micro-entrepreneurial activities. Close and frequent contact between both lender and borrower is key. Moreover, credit officers analyze the whole social and economic environment in which a micro-entrepreneur operates. Microfinance in Peru Microfinance has deep roots in Peru, as can be seen from the time line on page 4. Mohammed Yunus, a Bangladeshi entrepreneur and Nobel Prize winner often perceived as the inventor of modern microfinance, started microlending operations in the late 1970s with his Grameen bank, in operation since Developments in Peru were contemporary (Acción, an NGO, soon joined by IPC, a German consultancy) and subsequently evolved into a financial sector whose breadth and depth went far beyond that of the Bangladeshi market. In contrast to group lending with joint liability as practiced by Grameen Bank or Mexico s Compartamos Banco, Peru saw rapid advances in individual lending. Moreover, the Peruvians focused on savings as a key complement to borrowing, drawing on the German savings bank model. The resulting Cajas Municipales emerged at a time when the general wisdom of policy makers and development planners stated that poor people did not have significant savings capacity. Accompanied by savings, individual lending techniques prospered, and the predominance of group loans in Peru decreased sharply. 10 CGAP (2004): Key Principles of Microfinance 3

4 The Cajas Municipales were followed by the Cajas Rurales in the 1990s. The latter focused on the agricultural sector, filling a gap left by the closure of Banco Agrario, a government bank that failed in Specialized microfinance firms called Enterprises for Development of Small Businesses and Microenterprises (EDPYMEs) were also established in an effort to regulate the steadily increasing number of entities working in this area, thus adding to the growing diversity of the Peruvian microfinance landscape (Figure 3). Figure 3: Loan portfolio growth of Peruvian MFI s 11 [Billion USD] EDPYMEs Cajas Rurales Cajas Municipales Financial Services Providers Banks The evolution of MFIs 200 The leading MFI in Peru is Mibanco, an institution set up in 1998 as the first MFI fully equipped with a banking license. Mibanco did have a head start, as its mother group s (Grupo ACP) experience with microlending dates back to the 1970s. By 2003, Mibanco served 120,000 credit clients and 42,000 savings clients. As of 2011, it served 420,000 credit clients and 260,000 savings clients. 12 Mibanco s lead spurred efforts by its competitors, many of which started as humble MFIs and climbed up the formalization ladder to grow into fully fledged financial services providers. A further notable market event was the acquisition of Financiera Crear, an Arequipabased financial company, by Compartamos Banco, Mexico s leading MFI. This USD 63 million transnational equity transaction was yet another sign of healthy competition in the Peruvian microfinance market. It was preceded by a USD 9 million transaction, the 2009 acquisition of EDYFICAR, a financial company, by Banco de Crédito, Peru s largest commercial bank. Later on, Mibanco and EDYFICAR (then an EDPYME) were the first microfinance insti tutions (MFIs) to emit corporate bonds, in 2007 and 2008, respectively. In addition to those significant transactions, a large number of lesser moves by smaller market participants kept the Peruvian microfinance market in a state of continuous evolution. Due to the system of Peruvian regulation, which oversees six different regulatory types of MFIs, each with its rights and obligations, MFIs can move up the ranks and are indeed encouraged to do so. 13 The goal is a financial sector consisting of different forms of institutions, but with increasing numbers of institutions capable of providing a broad range of services, including deposit taking. Time line of microfinance in Peru 190s and 1960s First credit unions and saving and loans organizations set up by Priest Daniel McLellan (known as Father Dan the Money Man ) 1968 Acción International ventures into Peru, creates Groupo ACP (Acción Comunitaria del Perú) Early 1980s 1980s Gabriel Gallo Olmos and Claus-Peter Zeitinger s IPC start building municipal savings banks (CMAC) in Peru with the support of GTZ USAID and the IDB promote microfinance models featuring technical assistance and financing 1982 Acción International launches the microcredit program Progreso, the first selfsustaining microcredit program in Latin America Early 1990s COPEME starts tracking the credit history of microfinance clients 1992 Peru creates Rural Savings and Loans Banks (CRAC) to promote financial sector development in rural areas 1994 Creation of EDPYMEs incentivizes NGOs to seek formalization 1997 Private credit bureaus established in Peru 11 Superintendencia de Banca, Seguros y AFP (SBS) 12 Mibanco Such upward mobility was made easier by an amendment of Law in

5 1998 Grupo ACP creates Mibanco, a private microfinance bank 2009 Banco de Crédito acquires EDYFICAR, a large financial company founded as an NGO 12 years earlier, for USD 9 million 2011 Compartamos Banco (Mexico) takes over Financiera Crear Arequipa (Peru) for USD 63 million The Peruvian regulation The Peruvian microfinance regulation is based on the following pillars: Modular diversity of regulatory types and upward mobility between them Extensive supervision Nondiscrimination between domestic and foreign capital Nonintervention by the state, albeit with a few exceptions (Banco de la Nación, Banco Agropecuario) Freedom of capital allocation Freedom to determine prices (interest rates and commissions) Permission to take deposits for several regulatory forms (banks, financial services providers, CMAC, CRAC) These principles brought about one of the world s leading microfinance industries. Unfortunately, other countries have been excruciatingly slow in detecting and copying such success factors. In fact, government intervention, price controls, no upward mobility or an outright ban on deposit taking remain among the most significant obstacles to the goal of providing access to finance for the poor in many countries. Governments use taxpayers money to pursue their development agendas. This is welcome as long as public aid does not hinder or crowd out the emergence of private markets. Microfinance is one of the rare development success stories. It has extensively proven its ability to operate under market conditions; and at a more fundamental level, microfinance pays for itself by creating value in the development of new markets and market segments. In contrast, direct government involvement in financial intermediation, e.g., direct lending to poor people or to small businesses, has resulted time and again in failure, i.e. not achieving its stated goals. The Peruvian example is Banco Agrario, whose perennially loss-making subsidized lending scheme to farmers ended in insolvency. Another typical government intervention is to protect the poor by imposing interest rate caps. Such a measure may be politically appealing in the short run, but inevitably bears negative consequences in the long run. The difficulty is that by making it impossible to cover costs, interest rate ceilings undermine the ability of many MFIs to become sustainable, thus forcing many poor people to rely on much more expensive and limited informal alternatives. Conscious of such consequences, the Peruvian state has never attempted to manipulate interest rates and has so far restricted itself to very selective public intervention in microfinance. 14 One example would be the supply of public banking infrastructure to MFIs in rural areas where the MFIs could not yet afford to build such infrastructure themselves. Credit bureaus A further key element of the Peruvian microfinance market is its credit bureaus. The Peruvian regulator, SBS, operates a public credit bureau that collects information on regulated lenders. Banks and regulated MFIs are required to share their clients information on current, contingent, and total debt, as well as default records, on a monthly basis. 1 Since 1997, the bureau has also covered microfinance. At around the same time, private risk bureaus, namely Certicom and Equifax, began operations in Peru, the latter of which included non-regulated MFIs and is today s market leader. Peru now has some of the most complete and timely credit information coverage in the world. The result, a reduction in credit risk was brought about to a large extent by the market mechanism, once the state permitted it to work efficiently in a diligently regulated environment. 14 Law 26702, Article 7: The state shall not participate in the financial system, except for its investments in COFIDE as a second-floor bank, in the Banco de la Nación and in the Banco Agropecuario. 1 The Data Protection Law of Peru, enacted in August 2001, covers the private credit bureaus that collect and process credit information of both individuals and companies. The law specifies what type of information and records credit bureaus can legally collect. The law also states that individuals have the right to information and the right to modify or cancel their personal data.

6 The diverse and wide dissemination of information about clients, high liquidity levels in the market, and open access to funding sources have generated increasing numbers of shared clients (clients of two or more institutions) and the approval of higher loan amounts. This naturally entails risks. However, thanks to credit bureaus, these risks are visible and appear well understood. It is preferable to have known unknowns, i.e., risks well defined on the basis of information provided by specialized, professional, and neutral agencies, rather than the unknown unknowns of a murkier environment, prevalent in many developing economies. Outcomes Today, the micro-enterprise and small-business segment is of paramount importance to Peru s economic development, representing almost half of the GDP and three-quarters of the economically active population of 14 million people. The micro segment of the Peruvian financial sector serves 3. million active borrowers plus their household members. Both microcredit and microdeposits have grown at a rate of 30% annually over the last decade. 16 The microfinance market is characterized by a wide range of institutional formats, which have all found a solid client base (Figure 4). Figure 4: Number of borrowers by regulatory type, in thousands 17 Part of the social benefit of financial sector development can be captured by the decline in creditsupply prices over time. The market mechanism has led to steadily lower prices of financial products. Interest rates charged to clients (shown by proxy via MFI loan portfolio yields) have declined over the last decade (Figure ). 16 SBS, COPEME 17 SBS, Planetrating Banca Multiple Mibanco Financial Services Providers CMAC CRAC EDPYME NGO Figure : Portfolio yield over time 18 4% 40% 3% 30% 2% 20% Meanwhile, profit margins consistently remained positive, even during the worst period of the financial crisis. 19 Given the growth potential of the Peruvian economy and its fast-expanding domestic demand (shown in Figure 6), the Peruvian financial sector is set to evolve much further. Figure 6: Growth projections for Peru 20 [Thousand USD] Risks Portfolio yield (regulated) Portfolio yield (broad market) A market cannot grow fifteenfold without facing substantial risk. But the level of risk depends on how it is identified, monitored, and managed. Peru opted for transparency early on, enabling market actors to react to changing market signals. Thanks to the presence of constantly updated indicators in a clearly defined framework of rules, the strong expansion in Peruvian microfinance did not come at the price of extensive MFI failure or widespread overindebtedness. Despite fast growth and often ferocious competition, the supervisor, SBS, has seldom had to intervene in the market. 18 SBS, MIX market 19 The lowest quarterly return on assets was 1.6% in the second quarter of Source: SBS, COPEME 20 Economist Intelligence Unit Private consumption per head GDP per head (PPP) Population [People in millions] 6

7 Figure 7: Portfolio development (PAR30) 21 8% 7% 6% % 4% Bolivia Colombia 3% Ecuador 2% Peru 1% 0% Nevertheless, the share of nonperforming loans has been at a persistently higher level than in other major Latin American microfinance markets (Figure 7). In the absence of fundamental reasons for permanently higher levels, the cause often cited is that of higher levels of transparency in the Peruvian market. Even if that sounds plausible, these higher levels of nonperforming loans certainly keep the regulator on its toes. In for instance, SBS implemented additional capital requirements for financial institutions: 22 A countercyclical capital requirement is activated or deactivated according to a dynamic provisioning activation rule, based on GDP growth. The requirement takes into account default probabilities during a recession period and expected losses by type of loan. A capital requirement for concentration risks associated with individual exposures as well as sectoral and regional exposures. A capital requirement for interest rate risks on balance sheet level applies to banks dedicated to consumer lending and financial companies. Even so, as a country that holds high levels of international reserves (currently USD 47 billion or 30% of the GDP), whose public finances are sound (surplus of >1% of the GDP in 2011), and that holds little debt (20% of the GDP), Peru appears resilient to economic shocks and its microfinance industry well shielded. 21 MIX market 22 IMF Article IV Report

8 Conclusion Peru has come a long way in terms of financial sector development. A dynamic market of diverse players, serving millions of households in the lowerincome segment at low prices, is an impressive result. This is an early assessment, though, as even this success story depicts a country that is only roughly halfway to the access for all goal. This must be put into perspective, however, by the many developing economies still lagging far behind Peru, the model market in terms of financial sector development. Few governments have learned from the reforms that Peru introduced in the early 1990s. Policy makers have shown frustratingly little interest in how to effectively regulate and supervise microfinance, despite the fact that poor households value access to finance more than any other income segment and are more vulnerable to a malfunctioning system. The fact that 97% of microcredits across the world are repaid 23 while tax collection in developing economies is usually dismal should not have escaped policy makers attention. Indeed, the benefits of better connecting large parts of society to markets and the key role of soundly regulated finance in achieving this goal are too compelling to ignore. The Peruvian sector itself still has as much as halfway to go in order to reach out to the many remaining households and small enterprises still without proper access to financial services, particularly in the countryside. Financial depth continues to be low in Peru when compared to advanced economies, with private credit volume representing only 29% of GDP. 24 Housing finance for the poorer segments of society, the financing of fixed assets (as opposed to short-term working capital) in enterprises, and rural finance are all poorly developed. Moreover, blessed as it is with rich biodiversity, Peru boasts a promising agricultural sector, but financing to farmers, particularly smallholders, remains severely constrained. 2 Further potential for social investors lies in health care and schooling, given that medical services are precariously insufficient, 26 and that 20% of the rural population is illiterate. This leaves plenty of room for investment activities that yield important economic as well as social returns. responsability in Peru With almost 10% of the worldwide investment volume, Peru has been the largest country exposure in responsability s investment portfolio for many years. Investments in debt and equity amount to USD 90 million. In 2011, responsability opened a branch office in Lima to act as the hub for its Latin American investment volume of USD 360 million. Acknowledgments Valuable input to this report came from: Jorge Arias, ASOMIF William Ferrer, FEDECMAC Jacinta Hamann, Consultant Jorge Meza Marín and Jesús Del Prado, COPEME Felipe Portocarrero, IFC Luis Felipe Derteano Marie and Julia Sobrevilla, Grupo ACP Carolina Trivelli, Minister of Development and Social Inclusion of the Republic of Peru 23 Data from responsability, MIX market, and a broad range of official sources 24 IMF Financial Access Survey Felipe Portocarrero % of children in rural Peru suffer from chronic malnutrition, according to the IMF Article IV Report

9 responsability Social Investments AG Josefstrasse 9, 800 Zurich, Switzerland Phone , Fax This document was produced by responsability Social Investments AG (hereinafter responsability ). The information contained in this document (hereinafter information ) is based on sources considered to be reliable, but its accuracy and completeness is not guaranteed. The information is subject to change at any time and without obligation to notify the recipient. Unless otherwise indicated, all figures are unaudited and are not guaranteed. Any action derived from this information is always at the recipient s own risk. This document is for information purposes only. The information does not release the recipient from making his/her own assessment. This document may not be reproduced, stored in a retrieval system, or transmitted, in part or in full, in any form or by any means, whether electronically, mechanically, photocopied, recorded, or otherwise, without the prior written consent of responsability. Additional information is available upon request. Copyright. responsability Social Investments AG, All rights reserved. 9

Microfinance Regulation in Peru: Current State, Lessons Learned and Prospects for the Future

Microfinance Regulation in Peru: Current State, Lessons Learned and Prospects for the Future ESSAYS ON REGULATION AND SUPERVISION Microfinance Regulation in Peru: Current State, Lessons Learned and Prospects for the Future ALFREDO EBENTREICH April 2005 ESSAYS ON REGULATION AND SUPERVISION No.4

More information

Commercialization of Microfinance

Commercialization of Microfinance 8/16/2011 1 13 Commercialization of Microfinance Robert Lensink (RUG/WUR) Presentation for the UMM Conference in Frankfurt Schedule 8/16/2011 2 13 Some preliminary remarks Recent trend: commercialization

More information

Credit Bureaus and the Rural Microfinance Sector: Peru, Guatemala, and Bolivia

Credit Bureaus and the Rural Microfinance Sector: Peru, Guatemala, and Bolivia Credit Bureaus and the Rural Microfinance Sector: Peru, Guatemala, and Bolivia A joint project between The University of California at Berkeley and The FAO Office for Latin America December 8, 2003 University

More information

Microfinance in Peru: Key Findings and Perspectives

Microfinance in Peru: Key Findings and Perspectives 2011/GFPN/WKSP/010 Session 3 Microfinance in Peru: Key Findings and Perspectives Submitted by: Profinanzas Workshop on Microfinance Best Practices Ha Noi, Viet Nam 7-8 April 2011 Maria Rosa Morán Member

More information

Over-indebtedness and Microfinance Constructing an Early Warning Index

Over-indebtedness and Microfinance Constructing an Early Warning Index leading social investments Center for Microfinance University of Zurich Over-indebtedness and Microfinance Constructing an Early Warning Index Executive Summery Summary 2 Over-indebtedness and Microfinance

More information

Ex Post-Evaluation Brief Peru: SMEs Subordinate Loans II (COFIDE II)

Ex Post-Evaluation Brief Peru: SMEs Subordinate Loans II (COFIDE II) Ex Post-Evaluation Brief Peru: SMEs Subordinate Loans II (COFIDE II) Programme/Client Financing Subordinate Loan Capital II/BMZ No. 200166181 Programme executing agency Corporación Financiera de Desarollo

More information

Microfinance Institution Life Cycle Case Study

Microfinance Institution Life Cycle Case Study Publication Series Microfinance Institution Life Cycle Case Study Financiera Edyficar, Peru Kathleen Dischner, Treetops Capital Mike Gabriel, Grameen Foundation April 2009 www.grameenfoundation.org i 2009

More information

Research Insight Efficiency is the key to lower interest rates in microfinance. Executive Summery

Research Insight Efficiency is the key to lower interest rates in microfinance. Executive Summery Research Insight Efficiency is the key to lower interest rates in microfinance Executive Summery March 14 Key findings Microfinance provides hundreds of millions of low-income households with access to

More information

Peruvian Banks vs. US Banks

Peruvian Banks vs. US Banks Overview Earlier this year we published a series of notes that described the banking systems in Jamestown Latin America s target markets. On a quarterly basis, we will provide updates on the financial

More information

Microfinance in the Modern World. Janell MacDonald. University of Prince Edward Island

Microfinance in the Modern World. Janell MacDonald. University of Prince Edward Island Microfinance in the Modern World 1 Running Head: Microfinance in the Modern World Microfinance in the Modern World Janell MacDonald University of Prince Edward Island Microfinance in the Modern World 2

More information

IMPULSE MICROFINANCE INVESTMENT FUND

IMPULSE MICROFINANCE INVESTMENT FUND IMPULSE MICROFINANCE INVESTMENT FUND INVESTMENT OBJECTIVES AND GUIDELINES Investment objective The Investment Fund is being established primarily to build a well-structured portfolio of microfinance investments,

More information

A Comparison of Housing Finance Programs for Low Income People in Peru

A Comparison of Housing Finance Programs for Low Income People in Peru A Comparison of Housing Finance Programs for Low Income People in Peru Case Study Submitted to Cities Alliance ACCION International May 2007 Until recently, access to housing-related finance has remained

More information

The Sovereign Wealth Fund Initiative Fall 2012

The Sovereign Wealth Fund Initiative Fall 2012 The Sovereign Wealth Fund Initiative Fall 2012 Growing a Middle East- Middle Class: Where Small Investment Goes a Long Way Summary By Elissa McCarter Vice President of Development Finance CHF International

More information

Introduction1. Sample Description. Drivers of Costs and the Empirical Approach or Explanatory Variables:

Introduction1. Sample Description. Drivers of Costs and the Empirical Approach or Explanatory Variables: Efficiency Drivers of Microfinance Institutions (MFIs): The Case of Operating Costs 1 Adrian Gonzalez, Researcher, MIX (agonzalez@themix.org) The findings, interpretations, and conclusions expressed in

More information

Supporting Income Generation Programs

Supporting Income Generation Programs Supporting Income Generation Programs From Program Priorities and Operations in Foundation Building Sourcebook: A practitioners guide based upon experience from Africa, Asia, and Latin America A. Scott

More information

FINANCE for the POOR Equipment Leasing and Lending: A Guide for Microfinance 1

FINANCE for the POOR Equipment Leasing and Lending: A Guide for Microfinance 1 FINANCE for the POOR Equipment Leasing and Lending: A Guide for Microfinance 1 GLENN D. WESTLEY Senior Advisor, Micro, Small and Medium Enterprise Division Inter-American Development Bank As microfinance

More information

Zurich Venezuela: Providing insurance to Venezuela s low-income population

Zurich Venezuela: Providing insurance to Venezuela s low-income population Zurich Venezuela: Providing insurance to Venezuela s low-income population What once started with a coffee chat between a priest and the President of Zurich Venezuela on a Sunday morning after church service

More information

Loans to customers Savings. banks. Cooperative 49,8% banks 5,2% Private. banks 45,0%

Loans to customers Savings. banks. Cooperative 49,8% banks 5,2% Private. banks 45,0% Credit Unions and their strong competitors in Spain: Saving Banks Cajas de ahorros Elizabeth Aro Sofia, March 2009 The cooperative banking sector in Spain represents only a small part of the whole banking

More information

MICROFINANCE. Orrick, Herrington & Sutcliffe. Legal guide. Type: Published: Last Updated: Keywords: Microfinance; lending; development.

MICROFINANCE. Orrick, Herrington & Sutcliffe. Legal guide. Type: Published: Last Updated: Keywords: Microfinance; lending; development. MICROFINANCE Orrick, Herrington & Sutcliffe Type: Published: Last Updated: Keywords: Legal guide Microfinance; lending; development. This document provides general information and comments on the subject

More information

CrediFaCtor CrediFaCtor CrediFaCtor IDB Group

CrediFaCtor CrediFaCtor CrediFaCtor IDB Group CASE STUDY CrediFactor The factor that multiplies earnings 1 IntroducTIOn CrediFactor commenced operations on March 17, 2000, taking on a major challenge, as factoring in Nicaragua was not yet developed.

More information

Human Movements and Immigration (HMI) World Congress, 2-5 September 2004, Barcelona, Spain. Track: Economics and Development

Human Movements and Immigration (HMI) World Congress, 2-5 September 2004, Barcelona, Spain. Track: Economics and Development Human Movements and Immigration (HMI) World Congress, 2-5 September 2004, Barcelona, Spain Track: Economics and Development Dialogue Session on Remittances and Development Title: Connecting People on the

More information

The Impact of Interest Rate Ceilings on Microfinance Industry

The Impact of Interest Rate Ceilings on Microfinance Industry The Impact of Interest Rate Ceilings on Microfinance Industry Ali Saleh Alshebami School of Commerce & Management Science, SRTM University, India E-mail: Talk2aliii@gmail.com Prof. D. M. Khandare School

More information

SECTOR ASSESSMENT (SUMMARY): FINANCE 1. 1. Sector Performance, Problems, and Opportunities

SECTOR ASSESSMENT (SUMMARY): FINANCE 1. 1. Sector Performance, Problems, and Opportunities Country Partnership Strategy: Bangladesh, 2011 2015 SECTOR ASSESSMENT (SUMMARY): FINANCE 1 Sector Road Map 1. Sector Performance, Problems, and Opportunities 1. The finance sector in Bangladesh is diverse,

More information

Microfinance Expert, CEO of YOSEFO Finance Chairman of the Board of Directors of Mbinga Community Bank

Microfinance Expert, CEO of YOSEFO Finance Chairman of the Board of Directors of Mbinga Community Bank A CLKnet FORUM PRESENTATION BY ALTEMIUS MILLINGA Microfinance Expert, CEO of YOSEFO Finance Chairman of the Board of Directors of Mbinga Community Bank 11 th April, 2012 1 Tanzania s Financial Sector Landscape

More information

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO) Executive Summary. Access to finance for youth and women entrepreneurs in Myanmar

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO) Executive Summary. Access to finance for youth and women entrepreneurs in Myanmar UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO) Executive Summary Access to finance for youth and women entrepreneurs in Myanmar Prepared by: IPC - Internationale Projekt Consult GmbH On behalf

More information

AN ENABLING ENVIRONMENT FOR MICROBUSINESS AND THE RULE OF LAW Mike Dennis Department of State

AN ENABLING ENVIRONMENT FOR MICROBUSINESS AND THE RULE OF LAW Mike Dennis Department of State AN ENABLING ENVIRONMENT FOR MICROBUSINESS AND THE RULE OF LAW Mike Dennis Department of State UNCITRAL Colloquium on Microfinance Vienna, January 16-18, 2013 1 An Enabling Environment for Microbusiness

More information

SECTOR ASSESSMENT (SUMMARY): MICRO, SMALL AND MEDIUM-SIZED ENTERPRISE DEVELOPMENT 1 Sector Road Map 1. Sector Performance, Problems, and Opportunities

SECTOR ASSESSMENT (SUMMARY): MICRO, SMALL AND MEDIUM-SIZED ENTERPRISE DEVELOPMENT 1 Sector Road Map 1. Sector Performance, Problems, and Opportunities Small Business and Entrepreneurship Development Project (RRP UZB 42007-014) SECTOR ASSESSMENT (SUMMARY): MICRO, SMALL AND MEDIUM-SIZED ENTERPRISE DEVELOPMENT 1 Sector Road Map 1. Sector Performance, Problems,

More information

Arab Republic of Egypt: Commercial Microfinance The National Bank for Development

Arab Republic of Egypt: Commercial Microfinance The National Bank for Development Arab Republic of Egypt: Commercial Microfinance The National Bank for Development There is a large unmet demand for microfinance services among the entrepreneurial poor in Egypt. It is estimated that Egypt

More information

28.10.2013. The recovery of the Spanish economy XVI Congreso Nacional de la Empresa Familiar/Instituto de la Empresa Familiar Luis M.

28.10.2013. The recovery of the Spanish economy XVI Congreso Nacional de la Empresa Familiar/Instituto de la Empresa Familiar Luis M. 28.10.2013 The recovery of the Spanish economy XVI Congreso Nacional de la Empresa Familiar/Instituto de la Empresa Familiar Luis M. Linde Governor Let me begin by thanking you for inviting me to take

More information

BETTER LENDING AND BETTER CLIENTS: CREDIT BUREAU IMPACT ON MICROFINANCE

BETTER LENDING AND BETTER CLIENTS: CREDIT BUREAU IMPACT ON MICROFINANCE BETTER LENDING AND BETTER CLIENTS: CREDIT BUREAU IMPACT ON MICROFINANCE by Alain de Janvry alain@are.berkeley.edu, Jill Luoto luoto@are.berkeley.edu, Craig McIntosh ctmcintosh@ucsd.edu, Greg Rafert rafert@are.berkeley.edu,

More information

SMALL BUSINESS LENDING OPPORTUNITIES FOR CREDIT UNIONS

SMALL BUSINESS LENDING OPPORTUNITIES FOR CREDIT UNIONS SMALL BUSINESS LENDING OPPORTUNITIES FOR CREDIT UNIONS February 14, 2012 Terrence K. McHugh President Commercial Alliance 1 Business Lending in Credit Unions 1998 regulation limits business lending in

More information

FINANCIAL INCLUSION INDICATORS FOR DEVELOPING COUNTRIES: The Peruvian Case

FINANCIAL INCLUSION INDICATORS FOR DEVELOPING COUNTRIES: The Peruvian Case FINANCIAL INCLUSION INDICATORS FOR DEVELOPING COUNTRIES: The Peruvian Case Mrs. Giovanna Priale Reyes Head of the Office of Products and Services to the Consumer gpriale@sbs.gob.pe Superintendency of Banking,

More information

SECTOR ASSESSMENT (SUMMARY): FINANCE

SECTOR ASSESSMENT (SUMMARY): FINANCE Microfinance Expansion Project (RRP PNG 44304) Sector Road Map SECTOR ASSESSMENT (SUMMARY): FINANCE 1. Sector Performance, Problems, and Opportunities 1. During 2000 2006, the growth in population in Papua

More information

Main Street ECONOMIST: ECONOMIST THE THE. Economic information. Financing Young and Beginning Farmers. By Nathan Kauffman, Economist

Main Street ECONOMIST: ECONOMIST THE THE. Economic information. Financing Young and Beginning Farmers. By Nathan Kauffman, Economist THE Main Street ECONOMIST: ECONOMIST Economic information Agricultural for the and Cornhusker Rural Analysis State September 201 0 Federal Reserve Bank of of Kansas City Financing Young and Beginning Farmers

More information

Volume 21 October 2009 www.speerandassociates.com. Evolution of Programs for the Unbanked in Latin America: Microlending at the Forefront

Volume 21 October 2009 www.speerandassociates.com. Evolution of Programs for the Unbanked in Latin America: Microlending at the Forefront Strategic Commentary 30YEARS Vision, Experience, Partnership 1980 2010 Volume 21 October 2009 www.speerandassociates.com Evolution of Programs for the Unbanked in Latin America: Microlending at the Forefront

More information

The Global Banking Crisis: an African banker's response

The Global Banking Crisis: an African banker's response Sir Patrick Gillam Lecture The Global Banking Crisis: an African banker's response Mallam Sanusi Lamido Sanusi Governor, Central Bank of Nigeria Professor Judith Rees Chair, LSE Suggested hashtag for Twitter

More information

Microfinance and the Role of Policies and Procedures in Saturated Markets and During Periods of Fast Growth

Microfinance and the Role of Policies and Procedures in Saturated Markets and During Periods of Fast Growth Microfinance and the Role of Policies and Procedures in Saturated Markets and During Periods of Fast Growth Microfinance Information Exchange & Planet Rating An evaluation of the role that lending methodologies,

More information

Flexible Repayment at One Acre Fund

Flexible Repayment at One Acre Fund Executive Summary To meet client needs cost- effectively, on a large scale, and in difficult operating environments, microfinance institutions (MFIs) have relied on simple and standardized loan products.

More information

TECHNICAL NOTE 2 EQUITY & LEVERAGE IN INDIAN MFIS

TECHNICAL NOTE 2 EQUITY & LEVERAGE IN INDIAN MFIS TECHNICAL NOTE 2 EQUITY & LEVERAGE IN INDIAN MFIS Micro-Credit Ratings International Limited, Gurgaon, India September 2005 The purpose of this technical note is to provide a practical understanding of

More information

China's debt - latest assessment SUMMARY

China's debt - latest assessment SUMMARY China's debt - latest assessment SUMMARY China s debt-to-gdp ratio continues to increase despite the slowing economy. A convincing case can be made that the situation is manageable: the rate of credit

More information

FACTORS AFFECTING THE LOAN SUPPLY OF BANKS

FACTORS AFFECTING THE LOAN SUPPLY OF BANKS FACTORS AFFECTING THE LOAN SUPPLY OF BANKS Funding resources The liabilities of banks operating in Estonia mainly consist of non-financial sector deposits, which totalled almost 11 billion euros as at

More information

Two trillion and counting

Two trillion and counting Two trillion and counting Assessing the credit gap for micro, small, and medium-size enterprises in the developing world OCTOBER 2010 Peer Stein International Finance Corporation Tony Goland McKinsey &

More information

The following report summarizes the primary findings from this study. A. Institutions involved in Housing Microfinance (HMF)

The following report summarizes the primary findings from this study. A. Institutions involved in Housing Microfinance (HMF) Status Report: Housing Microfinance in Latin America Center for Innovation in Shelter and Finance Regional office for Latin American and the Caribbean, Habitat for Humanity International November 9, 2011

More information

Paper 4: Which local factors determine the presence of microfinance institutions? Evidence from Peru *

Paper 4: Which local factors determine the presence of microfinance institutions? Evidence from Peru * Paper 4: Which local factors determine the presence of microfinance institutions? Evidence from Peru * Abstract This paper addresses the uneven spread of microfinance institutions across Peru. It identifies

More information

of the microcredit sector in the European Union 2010-11

of the microcredit sector in the European Union 2010-11 Overview of the microcredit sector in the European Union 2010-11 Summary For the first time the EMN Overview survey covered Non-EU member states including all potential EU candidate states. A special emphasis

More information

The Economists Voice

The Economists Voice The Economists Voice Volume 2, Issue 1 2005 Article 8 A Special Issue on Social Security Saving Social Security: The Diamond-Orszag Plan Peter A. Diamond Peter R. Orszag Summary Social Security is one

More information

MICROLENDING IN THE UNITED STATES A TIMELINE HISTORY, 1973-2010

MICROLENDING IN THE UNITED STATES A TIMELINE HISTORY, 1973-2010 MICROLENDING IN THE UNITED STATES A TIMELINE HISTORY, 1973-2010 OVERVIEW Microfinance offers fair and empowering products loans, savings accounts, insurance, and more that help people get ahead financially.

More information

Recent Developments in Small Business Finance

Recent Developments in Small Business Finance April 1 Recent Developments in Small Business Finance Introduction In 1, a Small Business Panel was formed by the Reserve Bank to advise it on the availability of finance to small business. At about the

More information

Large and Small Companies Exhibit Diverging Bankruptcy Trends

Large and Small Companies Exhibit Diverging Bankruptcy Trends JANUARY, 22 NUMBER 2-1 D I V I S I O N O F I N S U R A N C E Bank Trends Analysis of Emerging Risks In Banking WASHINGTON, D.C. ALAN DEATON (22) 898-738 adeaton@fdic.gov Large and Small Companies Exhibit

More information

Definition of an enhanced Bank strategy in the microfinance sector

Definition of an enhanced Bank strategy in the microfinance sector Definition of an enhanced Bank strategy in the microfinance sector The present policy document outlines an enhanced strategy for the Bank in the microfinance sector, alongside the European Commission and

More information

Increasing Indebtedness, Institutional Change and Credit Contracts in Peru

Increasing Indebtedness, Institutional Change and Credit Contracts in Peru Inter-American Development Bank Banco Interamericano de Desarrollo Latin American Research Network Red de Centros de Investigación Office of the Chief Economist Working paper #R-378 Increasing Indebtedness,

More information

Policy Response Buy to Let Tax Relief

Policy Response Buy to Let Tax Relief Savills World Research Policy Response Buy to Let Tax Relief Autumn 215 savills.co.uk/research In his May budget the Chancellor announced a limit on mortgage interest relief for buy to let investors in

More information

Evolution of informal employment in the Dominican Republic

Evolution of informal employment in the Dominican Republic NOTES O N FORMALIZATION Evolution of informal employment in the Dominican Republic According to official estimates, between 2005 and 2010, informal employment fell from 58,6% to 47,9% as a proportion of

More information

Adjusting to a Changing Economic World. Good afternoon, ladies and gentlemen. It s a pleasure to be with you here in Montréal today.

Adjusting to a Changing Economic World. Good afternoon, ladies and gentlemen. It s a pleasure to be with you here in Montréal today. Remarks by David Dodge Governor of the Bank of Canada to the Board of Trade of Metropolitan Montreal Montréal, Quebec 11 February 2004 Adjusting to a Changing Economic World Good afternoon, ladies and

More information

Peru: Microfinance Investment Environment Profile

Peru: Microfinance Investment Environment Profile Peru: Microfinance Investment Environment Profile January 2005 Peru Team: Sean Kane Divya Nair Victor Orozco Shampa Sinha 1 CONTENTS Methodology Abbreviations I. Country Profile II. Overview of the Microfinance

More information

Performance Indicators for Microfinance Institutions. Section on Portfolio Quality. 3rd Edition. MicroRate

Performance Indicators for Microfinance Institutions. Section on Portfolio Quality. 3rd Edition. MicroRate Performance Indicators for Microfinance Institutions T ECHNICAL G UIDE Section on Portfolio Quality 3rd Edition MicroRate & Inter-American Development Bank Sustainable Development Department Micro, Small

More information

Statement of problem. Why microfinance?

Statement of problem. Why microfinance? WANT IMPACT? BUILD MARKET-RELEVANT MICROLENDERS Joyce Klein, Director of the Aspen Institute Microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination The Aspen Institute Microenterprise

More information

FIRST ANNUAL REPORT ON THE LATIN AMERICA SMALL BUSINESS LENDING INITIATIVE AUGUST 2008

FIRST ANNUAL REPORT ON THE LATIN AMERICA SMALL BUSINESS LENDING INITIATIVE AUGUST 2008 FIRST ANNUAL REPORT ON THE LATIN AMERICA SMALL BUSINESS LENDING INITIATIVE AUGUST 2008 I. OVERVIEW This report summarizes the first year of implementation of the Latin America Small Business Lending Initiative

More information

Micro Lending: A Case Study

Micro Lending: A Case Study Micro Lending: A Case Study Feraidoon (Fred) Raafat, College of Business Administration, San Diego State University, San Diego, CA 92182, (619) 594-5685, fred.raafat@sdsu.edu Massoud M. Saghafi, College

More information

China s Economic Reforms and Growth Prospects. Nicholas Lardy. Anthony M Solomon Senior Fellow. Peterson Institute for International Economics

China s Economic Reforms and Growth Prospects. Nicholas Lardy. Anthony M Solomon Senior Fellow. Peterson Institute for International Economics China s Economic Reforms and Growth Prospects Nicholas Lardy Anthony M Solomon Senior Fellow Peterson Institute for International Economics Paper Prepared for the CF-40 PIIE 2014 Conference Beijing May

More information

Microfinance in Egypt:

Microfinance in Egypt: The Egyptian financial Supervisory authority Microfinance in Egypt: An Overview Ghada Waly Advisor to the Chairman for Microfinance EFSA Content Definition of Microfinance (MF) Historical Background of

More information

Econ 330 Exam 1 Name ID Section Number

Econ 330 Exam 1 Name ID Section Number Econ 330 Exam 1 Name ID Section Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If during the past decade the average rate of monetary growth

More information

Microfinance in Cambodia

Microfinance in Cambodia Microfinance in Cambodia Investors playground or force for financial inclusion? Sanjay Sinha M-CRIL, December 2013 Introduction to the social investors playground Cambodia is one of the smaller countries

More information

FINANCING SMALL AND MICRO ENTERPRISES IN AFRICA 2. THE CHARACTERISTICS OF MICROFINANCE ARRANGEMENTS IN AFRICA

FINANCING SMALL AND MICRO ENTERPRISES IN AFRICA 2. THE CHARACTERISTICS OF MICROFINANCE ARRANGEMENTS IN AFRICA FINANCING SMALL AND MICRO ENTERPRISES IN AFRICA 1. THE ISSUES There is the perception that the demand for finance by small enterprises far exceeds the supply, but recent research in 4 countries shows that

More information

Economic Commentaries

Economic Commentaries n Economic Commentaries Sweden has had a substantial surplus on its current account, and thereby also a corresponding financial surplus, for a long time. Nevertheless, Sweden's international wealth has

More information

THE ACCESS TO FINANCE IN MOLDOVA - BANKING COMPARED TO MICROFINANCE ORGANIZATIONS

THE ACCESS TO FINANCE IN MOLDOVA - BANKING COMPARED TO MICROFINANCE ORGANIZATIONS THE ACCESS TO FINANCE IN MOLDOVA - BANKING COMPARED TO MICROFINANCE ORGANIZATIONS Viorica POPA, PhD Student Abstract The objective of this article is the comparative analysis of the banking sector with

More information

General guidelines for the completion of the bank lending survey questionnaire

General guidelines for the completion of the bank lending survey questionnaire General guidelines for the completion of the bank lending survey questionnaire This document includes the general guidelines for the completion of the questionnaire and the terminology used in the survey.

More information

Facilitating Remittances to Help Families and Small Businesses

Facilitating Remittances to Help Families and Small Businesses G8 ACTION PLAN: APPLYING THE POWER OF ENTREPRENEURSHIP TO THE ERADICATION OF POVERTY The UN Commission on the Private Sector and Development has stressed that poverty alleviation requires a strong private

More information

An overview from. Report 3 in the Payday Lending in America series Payday Lending in America: Policy Solutions. Oct 2013

An overview from. Report 3 in the Payday Lending in America series Payday Lending in America: Policy Solutions. Oct 2013 An overview from Report 3 in the Payday Lending in America series Payday Lending in America: Policy Solutions Oct 2013 Overview About 20 years ago, a new retail financial product, the payday loan, began

More information

Update: Rating Triggers in the U.S. Life Insurance Industry In 2004

Update: Rating Triggers in the U.S. Life Insurance Industry In 2004 Special Comment July 2004 Contact Phone New York Laura Bazer 1.212.553.1653 Marc Abusch Robert Riegel Update: Rating Triggers in the U.S. Life Insurance Industry In 2004 Overview Rating triggers, their

More information

Building up Business Microenterprise Demand for Credit in the Caribbean

Building up Business Microenterprise Demand for Credit in the Caribbean Building up Business Microenterprise Demand for Credit in the Caribbean January 28, 2014 Barbara Magnoni, Derek Poulton and Danielle Sobol EA Consultants Outline 2 1. Study Objectives 2. Methodology 3.

More information

RURAL AND AGRICULTURE FINANCE Prof. Puneetha Palakurthi School of Community Economic Development Sothern New Hampshire University

RURAL AND AGRICULTURE FINANCE Prof. Puneetha Palakurthi School of Community Economic Development Sothern New Hampshire University RURAL AND AGRICULTURE FINANCE Prof. Puneetha Palakurthi School of Community Economic Development Sothern New Hampshire University DRIVERS OF RURAL DEVELOPMENT High overall economic growth Effective land

More information

How Should Microfinance Institutions Best Fund Themselves?

How Should Microfinance Institutions Best Fund Themselves? How Should Microfinance Institutions Best Fund Themselves? Felipe Portocarrero Maisch Álvaro Tarazona Soria Glenn D. Westley Inter-American Development Bank Washington, D.C. Sustainable Development Departament

More information

MICROFINANCE A SUCCESS STORY OF SOLIDARITY AND SUBSIDIARITY: THE STATE OF THE ART

MICROFINANCE A SUCCESS STORY OF SOLIDARITY AND SUBSIDIARITY: THE STATE OF THE ART Pursuing the Common Good: How Solidarity and Subsidiarity Can Work Together Pontifical Academy of Social Sciences, Acta 14, Vatican City 2008 www.pass.va/content/dam/scienzesociali/pdf/acta14/acta14-pratgay.pdf

More information

Some examples of what the author and his institution have experienced in the past ten years, are as below;

Some examples of what the author and his institution have experienced in the past ten years, are as below; To: CPPM 2007 Paper For Presentation Page 1 of 10. Real Interest Rates Prevalent In Informal Money Lending In India, & Its Implications For Public Policy Making For Micro Credit In India, By Dr. Ramesh

More information

How To Understand And Understand The Financial Sector In Turkish Finance Companies

How To Understand And Understand The Financial Sector In Turkish Finance Companies FEBRUARY 14, 2013 BANKING SECTOR COMMENT Turkish Finance Companies: New legislation on Financial Leasing, Factoring and Financing Institutions Is Credit Positive Table of Contents: SUMMARY OPINION 1 OVERVIEW

More information

The Development of Credit Unions in Belarus

The Development of Credit Unions in Belarus GERMAN ECONOMIC TEAM IN BELARUS 76 Zakharova Str., 220088 Minsk, Belarus. Tel./fax: +375 (17) 210 0105 E-mail: research@research.by. Internet: http://research.by/ PP/09/06 The Development of Credit Unions

More information

How fund managers can make money from lending

How fund managers can make money from lending How fund managers can make money from lending In the seven years that have elapsed since the financial crisis, the number of funds raising capital to lend to the real economy has increased significantly.

More information

MicroFinancialOrganization

MicroFinancialOrganization 2011 MicroFinancialOrganization December 2011 LTD MFO Capital Credit Content Business Plan 1. Index of tables and figures 1.1.Georgia........................................................................

More information

Following decades of instability and several natural disasters,

Following decades of instability and several natural disasters, IDA at Work Nicaragua: Innovative Approaches Reach the Poor in Remote Rural Areas IDA is helping Nicaragua to scale-up its model interventions for tacking rural poverty Following decades of instability

More information

Acknowledgments Executive Summary

Acknowledgments Executive Summary Foreword p. xiii Acknowledgments p. xv Executive Summary p. xix Abbreviations p. lix Currency Equivalents p. lxxii Assessing Access p. 1 Growth, Poverty Reduction, and Access to Financial Services p. 1

More information

FINSCOPE Zambia 2009. FinScope Zambia 2009 M & N ASSOCIATES LIMITED

FINSCOPE Zambia 2009. FinScope Zambia 2009 M & N ASSOCIATES LIMITED FINSCOPE Zambia 2009 FinScope Zambia 2009 The Government of the Republic of Zambia (GRZ) has been committed to reforming the country s financial sector for several years. Financial access is now a priority

More information

Credit Lectures 26 and 27

Credit Lectures 26 and 27 Lectures 26 and 27 24 and 29 April 2014 Operation of the Market may not function smoothly 1. Costly/impossible to monitor exactly what s done with loan. Consumption? Production? Risky investment? Involuntary

More information

Village banks: the new generation. How IFAD helped FINCA set its village banking programmes on the road to commercialization

Village banks: the new generation. How IFAD helped FINCA set its village banking programmes on the road to commercialization Village banks: the new generation How IFAD helped FINCA set its village banking programmes on the road to commercialization What is FINCA? FINCA International, Inc. provides financial services to the world

More information

Further Developments of Hong Kong s Offshore RMB Market: Opportunities and Challenges

Further Developments of Hong Kong s Offshore RMB Market: Opportunities and Challenges Further Developments of Hong Kong s Offshore RMB Market: Opportunities and Challenges Zhang Ying, Senior Economist In recent years, as the internationalization of the RMB has been steadily carrying out,

More information

The Profile of Microfinance in Latin America in 10 Years: Vision & Characteristics Beatriz Marulanda y María Otero

The Profile of Microfinance in Latin America in 10 Years: Vision & Characteristics Beatriz Marulanda y María Otero The Profile of Microfinance in Latin America in 10 Years: Vision & Characteristics Beatriz Marulanda y María Otero Published April 2005 For reproduction rights, contact: Robin Ratcliffe (rratcliffe@accion.org)

More information

Report of 3Q 2015 consolidated results Information reported in Ps. billions (1) and under Full IFRS (1) We refer to billions as thousands of

Report of 3Q 2015 consolidated results Information reported in Ps. billions (1) and under Full IFRS (1) We refer to billions as thousands of Report of 3Q 2015 consolidated results Information reported in Ps. billions (1) and under Full IFRS (1) We refer to billions as thousands of millions. isclaimer Grupo Aval Acciones y Valores S.A. ( Grupo

More information

The Business Case For SBA 7a Lending For Community Banks

The Business Case For SBA 7a Lending For Community Banks The Business Case For SBA 7a Lending For Community Banks How Community Banks Can Prudently Make Loans to Small Business By: Joanne Thompson SBA OneSource, LLC This paper examines the business reasons for

More information

ABN AMRO / Real Microcredito Self-sustaining micro-finance programs to help Brazil s poor

ABN AMRO / Real Microcredito Self-sustaining micro-finance programs to help Brazil s poor DEDICATED TO MAKING A DIFFERENCE World Business Council for Sustainable Development Case study 2004 This version of the Real Microcredito case study is based on the full business school case prepared by

More information

Assessing the Sustainability of Savings and Credit Cooperatives

Assessing the Sustainability of Savings and Credit Cooperatives Assessing the Sustainability of Savings and Credit Cooperatives Markus Distler (markus.distler@die-gdi.de) and Daniel Schmidt (daniel.schmidt@diegdi.de) 1 1. Introduction Microfinance has been centered

More information

RELEVANT TO ACCA QUALIFICATION PAPER F9

RELEVANT TO ACCA QUALIFICATION PAPER F9 RELEVANT TO ACCA QUALIFICATION PAPER F9 Analysing the suitability of financing alternatives The requirement to analyse suitable financing alternatives for a company has been common in Paper F9 over the

More information

PROPERTY/CASUALTY INSURANCE AND SYSTEMIC RISK

PROPERTY/CASUALTY INSURANCE AND SYSTEMIC RISK PROPERTY/CASUALTY INSURANCE AND SYSTEMIC RISK Steven N. Weisbart, Ph.D., CLU Chief Economist President April 2011 INTRODUCTION To prevent another financial meltdown like the one that affected the world

More information

BUSINESS FINANCING IN TANZANIA (CHALLENGES & OPPORTUNITIES)

BUSINESS FINANCING IN TANZANIA (CHALLENGES & OPPORTUNITIES) BUSINESS FINANCING IN TANZANIA (CHALLENGES & OPPORTUNITIES) 1 The Agenda Why long term financing? The current status and existing alternatives Challenges of raising long term capital in Tanzania Capital

More information

Chapter 1 Introduction

Chapter 1 Introduction Chapter 1 Introduction 1.1 Aim of the study Development economists and policy makers generally identify access to credit as one of the main determinants of economic activity and alleviation of poverty

More information

HOUSE COMMITTEE ON SMALL BUSINESS. Hearing on. SBA Microloan Program. June 14, 2007

HOUSE COMMITTEE ON SMALL BUSINESS. Hearing on. SBA Microloan Program. June 14, 2007 HOUSE COMMITTEE ON SMALL BUSINESS Hearing on SBA Microloan Program June 14, 2007 Written Statement of Elaine L. Edgcomb, Director, FIELD The Aspen Institute Washington, D.C. Madam Chair Velazquez, Ranking

More information

The Business Credit Index

The Business Credit Index The Business Credit Index April 8 Published by the Credit Management Research Centre, Leeds University Business School April 8 1 April 8 THE BUSINESS CREDIT INDEX During the last ten years the Credit Management

More information

LIST OF MAJOR LEADING & LAGGING ECONOMIC INDICATORS

LIST OF MAJOR LEADING & LAGGING ECONOMIC INDICATORS APRIL 2014 LIST OF MAJOR LEADING & LAGGING ECONOMIC INDICATORS Most economists talk about where the economy is headed it s what they do. Paying attention to economic indicators can give you an idea of

More information

Fewer net errors and omissions, that is a new format of the balance of payments

Fewer net errors and omissions, that is a new format of the balance of payments Fewer net errors and omissions, that is a new format of the balance of payments The size of net errors and omissions in the balance of payments decreased from 4.4% to 2.3% of GDP. This resulted from data

More information

Inequity of the Circular Economy. By Daniel Cochran, Appalachian State University 2015

Inequity of the Circular Economy. By Daniel Cochran, Appalachian State University 2015 Inequity of the Circular Economy By Daniel Cochran, Appalachian State University 2015 Author Note Daniel Cochran, Masters of Business Administration, Appalachian State University, Boone, North Carolina

More information