The transformation of NGO-MFIs in Indian microfinance has not received much opposition as such. This is evident from the increasing number of NBFCs in the sector. Emerging field like microfinance does not have a dominant player to institutionalize the norms. Issues of this nature indirectly helped in emergence of NBFCs. As discussed, the position of institutional entrepreneurs also worked in their favor. There are not strong institutional arrangements in the sector, which can act as a barrier for any divergent change. The institutional entrepreneurs, being at the periphery, have relatively low embeddedness in the institutional logic of NGO functioning. Unlike, their predecessors, they are inclined to join the mainstream financial institutions, while serving the rural poor.

The institutional entrepreneurs have successfully legitimized their action by aligning their interest with important resource holders like commercial banks, investors etc. For institutional entrepreneurship, developing a stable relationship with various actors is necessity. The formation of NBFCs through spinning off, have helped NGO-MFIs to be regulated by the Reserve Bank India, and thus relieving them from the ambiguous relationship with registrar office under Societies Act. Now, the investors have no hesitation to invest in NBFCs, unlike in NGOs and hence the tension for accessibility of capital has been eased out for NBFCs.

The paper makes an attempt to look into the already much discussed topic on transformation of NGO-MFIs from the perspective of institutional entrepreneurship. It has an implication for the theory of institutional theory, because till now, studies on institutional entrepreneurship in emerging field have identified institutional entrepreneurs as dominant players (Maguire et al., 2004). But, like in a mature organizational field, the organizations at the periphery can also become institutional entrepreneurs in an emerging field as we have seen in case of Indian microfinance. There are some specific attributes, the institutional entrepreneurs required, which are not confined to a large resource base; but a leadership that is open to new paradigm, a vision that can facilitate synergistic relation with stakeholders, ability to develop stable relation with other actors in an enabling environment, and ability to legitimize the form in existing legal framework. Thus, if an actor can leverage from both endogenous as well as exogenous factors, then an emerging field like that of microfinance, can provide scope for institutional entrepreneurship.

The Transformation of NGO-MFIs in Indian Microfinance is a post from: Microfinance Organizations

FEFISOL is the first fund rural microfinance specialist of Africa to support fair trade and organic small business. It has been launched to fund microfinance institutions and producer organizations across the continent in local currency. African microfinance organizations will benefit from a loan funded by the AFD, which absorbs the loss of foreign exchange in local currency. There will be specific support for fair trade and organic producer organizations to help improve the quality and development of their long-term activities, particularly through access to new market sectors. SOS Faim and the Network of Microfinance Institutions in Africa help in this process, along with organizations specializing in fair trade.

Among investors, the European Investment Bank will provide 5 million euros to this fund to help develop microfinance operations and small farms in rural areas of Africa while helping to improve access to fair trade and organic export. The support of private and public investors is crucial to the success of this fund.

In addition, also provided technical assistance to help microfinance institutions to develop new products, improve business planning and developing the skills of legal and human resources. The EIB also supports other initiatives in the world to boost access to finance for small business through microcredit. This initiative complements the REGMIFA fund to support microfinance in rural areas and launched earlier this year and supported by the European Investment Bank and financial institutions development.

The First Microfinance Fund For Farmers Sustainable African is a post from: Microfinance Organizations

Microfinance aspire to a gradual reduction of the interest which will be reversed in loans coincides Central Bank president, Dr. Antenor Rosales

The Law on the Promotion and Regulation of Microfinance was approved yesterday in particular, with two motions which did not succeed as the inclusion of Alba Caruna under regulation and with the optimism of the microfinance sector augur, after effect, a gradual reduction in interest rates and recovery between 2011 and 2012 of $ 80 million for the placement of credits.

Discussion and adoption of the Law on the National Assembly, one of the commitments that the Government was pending with the International Monetary Fund, IMF, was attended by 75% of the 92 deputies. The law provides for seven titles and 82 articles, among which stand out those related to interest rates, regulation and user protection.

Article 72 of the Act, for example, provides that the interest rate must be agreed freely, i.e. depending on supply and demand. However, in this sense, the chairman of the Committee on Production, Economics and Budget Committee of Parliament, Wálmaro Gutierrez, said that this rate is “effective”, i.e. not include other fees as operating expenses and commissions.

“In other words if the agreed rate is 16% I can not charge or include commissions, maintenance of value, technology transfer, field trips or anything that I can think for expenses and commissions, that the law forbids such the only way that you can charge criminal rates in addition to the current interest rate is the interest rate moratorium, “he said.

The behavior of interest rates
In this context, the same provision states that can not be more than a quarter of the current interest rate agreed. “In other words the interest rate will not continue prostituting as in today,” he said.

In this regard the President of the Nicaraguan Association of Microfinance Institutions, ASOMIF, Rene Romero, argued that the rates be gradually reduced over the next three to five years. He recalled that the current industry average is between 16 and 48% depending on credit risk.

“Yet they are lower compared to the rate of credit card interest exceeding 60%,” he recalled.

Prohibit compounding
Gutiérrez moreover recalled that the statute described the interest rates can not be charged on the total credit, but on what should be of credit. “It prohibits the capitalization of interest unless otherwise agreed with the debtor, based on a restructuring process,” he said.

Another aspect of the law’s regulation. Article five of the states that all entities that provide micro-credit will be supervised by the National Microfinance CONAMI, which shall consist of five persons to be appointed by the Executive and ratified by the National Assembly.

Benefits of the law

“Now charanga microfinance can not make the resources of international cooperation it will have a watchful eye of the state. And that obviously many people machuca tripe, but the benefit for them, for the sector, leading to more confidence going to get external funds to channel loans, “argued the legislature.

Romero said that “important” in that sense, is that the law gives credibility to the union institutions and thus contributing to its growth. “What we see is that transparency will allow the credit. Customers now have the opportunity of knowing how much your credit, today there is little transparency in this regard, “he said.

No more contracts with fine print

But there’s more. The law in Article 71 states that contracts must be clear and precise. At that point, Romero said there will be no contracts with fine print. These “shall be made publicly on websites,” he said.

To this Gutiérrez said that the law is to prohibit the waiving of domicile of the debtor, also prohibits discounting in advance the interests on loans.

Other than that, prohibits charging prepayment penalties and establishes that the only court competent to hear a case of microcredit is the address of the debtor. Or is “no more, that the debtor was Masaya, they will sue in Puerto Cabezas, another area where there is a party, now it is forbidden,” he said.

The chairman of the Central Bank of Nicaragua, BCN, Antenor Rosales, summarized the law of entry is an opportunity for greater availability of financing.

No credit ceiling limits

Another advantage of the Law on the Promotion and Regulation of Microfinance is not necessarily limited to microcredit, it indicates that the entities can provide the equivalent of ten times the national percita GDP, which would amount between 11 thousand and 12 thousand dollars.

But “CONAMI could allow an additional amount for agricultural production up to 15 thousand and 20 thousand dollars,” said the president of ASOMIF, Rene Romero.

Moreover, the NGO microcredit and want to give the bank or financial break, they must first apply to the CONAMI, an entity that has the final say on the matter.

Microfinance Act Approved is a post from: Microfinance Organizations

Congressman Gutierrez Wálmaro tries to convince his counterpart Freddy Torres back to support the Microfinance Bill.

The National Assembly decided today not to approve the Development Act and Regulation to Microfinance as initially planned, to allow time for the President of the Committee on Production, Economics and Budget, the Sandinista legislator Wálmaro Gutierrez, who achieved an understanding with the rest Members of liberal members of the legislature.

Is expected to be made at noon today for an emergency meeting of a subcommittee composed of Gutierrez and the deputy also Freddy Torres, Consticionalidad Liberal Party (PLC), and other Members. They have also invited the president of the Superior Council of Private Enterprise (COSEP), Joseph Adam Aguerri and Rene Romero, president of the Association of Microfinance Institutions (ASOMIF).

Rep. Gutierrez today reacted strongly against criticism that it is pretending to protect Alba Caruna with the legislative proposal, as formulated, it does not cooperatives to regulatory standards.

Gutierrez called “ignorant” to his colleagues who have questioned the bill, insisting that cooperatives are not regulated because they do not develop a proper microfinance activity.

Meanwhile Deputy Torres responded immediately and said “yes it is ignorance,” because Rep. Gutierrez, along with COSEP, ASOMIF, and government officials agreed to the bill ignored parliamentary procedure. Torres added that now claim that the project is endorsed and approved.

The Mayri of the liberal deputies insist that what we want is to protect Caruna Alba, which manages the oil supply agreement signed by President Daniel Ortega and his Venezuelan counterpart Hugo Chávez.

Parliament Suspends Approval of the Microfinance Act is a post from: Microfinance Organizations

The financial system has 1,355 ATMs across the country. Strong growth is projected for this year’s machine. Details of ATMs by state and region.

Owning a debit card to withdraw money for the day, make a transfer or money, pay utility bills, recharge your cell phone, buy tickets to an event, choose the language of interaction and even make deposits, are part of the options that add up ATMs that are the subject of an aggressive expansion by financial institutions.

In the second week of February the financial system has 1,355 ATMs belonging to 24 institutions including banks, private financial funds, cooperatives and mutual. The figure is no less significant if one considers that the provision of these machines grew by 53% compared with 2008 when they reached only 883 units.

Looking at the investments undertaken by the entities is that the Banco Mercantil Santa Cruz (BMSC) has the largest network of ATMs, totaling 249 machines, 67 more than his rival, Banco Nacional de Bolivia (BNB) with 182 ATMs. The group of states with the greatest amount of cash is also constituted by the banks of Credit (179), Bisa (173), Union (105) and Prodem FFP (92).

In mid-2008 the outlook was different. Of the 883 ATMs, about 560 were owned by banks, Santa Cruz and Cochabamba concentrated the largest number of machines, 273 and 241 respectively, the leadership in providing this service was in the hands of the BCP with 181 ATMs, escorted by the BMSC (171) and BNB (119) and Bisa (90).

At the regional level in the department of Santa Cruz are installed near La Paz 461 and 347, which added to the 68 machines in the city of El Alto totaling 415. In Cochabamba are 225 ATMs.

With just over 1.3 million debit cards and enabled more than 300 million dollars in transactions, ATMs are becoming more important. Card customers have not only clears the window care agencies, but also lowers the costs of the entities. Additionally, entities, some more than others, assimilated that tellers are another way of expanding service to suburban areas.

“The tellers are very important for the BMSC and to the public. Favorable factors are accessibility, care for 24 hours, the speed with which it trades and more choices. Therefore we plan to make significant investments to increase our ATM network, replace equipment that have outlived their useful life and increase our range of transactions, said Sara Ruiz, assistant manager of Product of the BMSC.
But from the Union State Bank, its general manager, Marcia Villarroel, recently made an announcement aggressive. The agency plans to purchase 100 cash to complete the management of 205 machines and thus achieve the objective of banking and service expansion.

BIE Bank-turned bank since last year, also plans to enter the ATM service. Elizabeth Nava Salinas, general manager of the company, said that 2011 will incorporate 20 ATMs.

In the same way is the financial background Fassil already has 45 cash and it plans to add 25 machines, which will add to its aggressive expansion strategy by opening new agencies provided comprehensive and inclusive service.
Other entities such as banks BNB, BCP and the BISA also have expansion plans. In the case of Bisa, in February began to aggressively expand the cash deposit option through “Depobisa.”

Financial System and Expanding ATM is a post from: Microfinance Organizations

Lessons from Bolivia

Today we attended a master class since Afi Foundation considers one of the great scholars of microfinance worldwide. A gift from AECI, ICO Foundation Microcredit and the Master of the UAM to all attendees that we are meeting today in the auditorium of the AECI. Claudio Gonzalez-Vega, great communicator as well as academic, has led us on a tour of the most interesting parts of this industry, as questioned – by a few, but noisy “in recent months.

Using the example of Bolivia, a country that knows very well it is worth noting the important contribution that microfinance has had with the development of the financial system as a whole, in a low income country, and shaped by institutions are still incomplete. The indicators shown testify to his claims.

In the current context of questioning the goodness of microfinance, part of the problem arises from the huge and often disproportionate expectation that all we have placed in this instrument / working method / approach to banking. Poverty alleviation, empowerment of women, promotion of entrepreneurship, access to housing, employment generation, food security, etc. are some of the expected outcomes of microfinance, but are not we asking too much? Seize his undeniable contribution to the financial inclusion of much (the majority) of people in countries at various latitudes. Access the financial system brings concrete results if they are in the scope and range of microfinance, productive and can take advantage of business opportunities, build assets, stabilize consumption and diversify risks.

And fundamentally, the key to the success of microfinance is still the same: the correct assessment of the ability (and willingness) to pay the customer, based on personal relationships and trust in both directions.

In this year of celebration in Spain of the Global Microcredit Summit, sure we will have chance to enjoy many activities such as the one we witnessed today. For our part, we are working to contribute to enriching as interesting agenda.

Microfinance, Financial Systems and Crises is a post from: Microfinance Organizations

FSP-UGT sources have indicated to Europa Press that the union “abide by the decision of the TC”, while acknowledging that “by this decision of the TC, we fear that the remaining resources will be resolved in the same line as the Case constitutional. “

According to the trade union “social and wage cuts are not appropriate measures and is the best way to solve economic problems.”

He also noted that the union “will fight to regain that lost wages in other ways.”

The Federation of Public Service UGT-A last year filed an administrative appeal before the High Court of Justice of Andalusia (TSJA) of the Board of Andalusia, which approved urgent action on remuneration within the scope of the Andalusian public sector.

He appealed against the decree which provides for wage cuts for public employees, was brought by the special procedure for the protection of fundamental rights. UGT-A then remembered that this decree amends the Budget Act of the Autonomous Community of Andalusia in 2010 and has been used as “contrary to law and cause of injury to the legitimate interests of our constituents,” said the union.

Nationally, the Federation of Public Service CCOO and UGT will squeeze “the maximum” the courts with new initiatives to address the officials pay cut passed in May 2010, although the TC has not admitted to pending the constitutional challenge presented by the National Court, thus endorsing the Government’s action.

FSP-UGT Against The Decree Of The Ministry Of Finance And Administration is a post from: Microfinance Organizations

What is the vision we have as president of Asobo on interest rates?

Lending rates have evolved to the downside, the product of competition in the financial system. The banks are fighting the centimeter to have the customer’s preference. That is, one way to get customers is to lower rates. In the case of the passive, the second half of last year could see a rise especially to depositors with smaller amounts even though it had enough liquidity. That effort also has been a sectoral and coordinated with the government. Since the last months of 2010 has warned that further movement was drifting toward the high liquidity loans.

This downward trend will continue these rates 2011

It depends from the structure of each bank. Some banks may lower its lending rates and there are those who can raise their rates even more passive. Depends on each of the participants, the strategy and the size to support a bail on its margins.

Do you think the financial system will continue to present positive results as Bonanca as in recent years?

Clearly have been good, but these results are not explained solely by the performance of institutions. If you continue to do well to customers, banks will do well. If you are active and make more new business and will able to pay your principal and interest. That good condition will be reflected in financial institutions.
Then, see conditions for this to continue utilities
I think so, we are in a positive environment. It is difficult to predict the levels of profitability to be achieved, but it will be a good year.

Recent months have presented as an inflationary pressure had not been warned in recent years. Do not think you can affect the health of the system?

Obviously there has been this sharp upward trend, the result of higher international prices has been reflected internally, however, is not an effect on financial activity. The BCB is acting in the control of this variation and I think the results are adequate.
A lack of control, a worsening of this indicator, in any case generates risk
We have in mind what was the inflationary period during the administration of the UDP in the ’80s. Nobody wants that scenario and control efforts are adequate.

Microfinance Inflation and Possible Banking Risks is a post from: Microfinance Organizations

BancoSol is a leading microfinance reference, but now you are at the head of a business entity as Asobo, do you fear that is affecting the image gained by the bank?

Quite the contrary. The fact that BancoSol as an icon of the microfinance industry in Bolivia was put at the head of Asobo clearly shows the role we play. We specialize in microfinance but also bank and as such we believe the system has an important role in the whole and has much to contribute. We see it rather as an opportunity, as a way to reflect our participation in the financial system.

How will his presidency to combine work and other organizations as Asobara Asofin working in the field of microfinance?
Not only are Asobara and Asofin; are Univiv, Finrural, and Asocoop. This is an opportunity to work together. I think that this post will contribute to the articulation of proposals and solutions to enable the further expansion and improvement of financial services.

What are the main tasks that run from Asobo?

Continue in the jobs that were being done. As vice president was in previous administrations. The agenda is not new and is not intended to change. Will remain our concern the representation of banks, coordinate with the BCB, with the Legislature, coordination with sectoral authorities and associate members in order to have a healthy and robust financial system.

The financial system had been talking about new rules and reforms with the government. What are the most pressing for the optimum performance of the business?

You have to understand that the financial system complements several other aspects that are already business performance. Sometimes it is considered that the claim is resolved everything that can go on many projects. In fact the credit is only one link in the chain. Companies need to have staff, managerial, strategy, markets and a number of things and when capital is required to supplement the financial system. The financial system has no role whatsoever for anything just complements. It is in this sense that we have been working to viable projects that are supported and backed.

Microfinance to Control Asoban is a post from: Microfinance Organizations

The success of microfinance has spread to commercial banks and several of them are entering this niche

Do not see a risk of losing the lead so far holds?
It is a very interesting question. When you talk to the founders of institutions and BancoSol and precursors of microcredit in Bolivia, they said: “I hope that one day others will follow. Hopefully an example for others we want to do the same and generate an industry that is competitive renewed, because it will allow the client to have better products, better services, and better prices. Since the post of president of Asobo see commercial banks and microfinance institutions are obviously commercial banks have made inroads into the SME segment, not so much in microfinance. Competition means that institutions are best, which products are best, which increase and improve services and lower prices. In short, the client wins.

Microcredit will remain the large vein of recent years?
Bolivia is already a mature market microcredit we are talking about U.S. $ 1,200 million provided here and the big question is always how big is the market and what remains to be expanded. Surely the expansion will come in slightly different ways, the institutions has entered a bit more in rural areas because the financial business is primarily urban. We will use other methods to reach rural audiences, will deepen the segments where microfinance has not yet come. If we keep doing the same thing the market can be complicated and spaces will probably be smaller. You can not grow indefinitely at a rate of 25% as we have been doing in recent years. The expansion of micro-credit must be accompanied by new products, new areas, and other populations.

In Peru, bad loans have grown in the field of microfinance and SMEs. Do not see a possible risk in consumer credit?
We had an experience quite critical in the late ’90s with consumer loans. Consumer organizations were admitted to our market very aggressively which damaged much the culture of payment and debt overhang generated schemes were too complicated. In Peru also being symptoms of over-indebtedness, there is a large supply of consumer credit and often the nature of Microempreendedor is not to say no to money. Offers come and offer money left, right, up and down and you accept. Few people say no.

Do not you think that this phenomenon is moved to Bolivia?
I do not think. The difference and advantage over Peru is that we have a past experience which microfinance institutions and the overall system not learned the lesson of indebtedness; have learned the lesson of methodologies to measure the true ability to pay the customer. We learned to share information, we now have credit bureaus to credit bureaus from which we get reports of debt, to the point that if a client is being consulted BancoSol to give him credit at another institution, and you will automatically receive an alert to measure their ability to pay. There is always a risk, of course, that people will borrow more, but I think we reached the maturity to avoid a return to past wrongs.

But while there is a lot of liquidity to be placed and no shortage of bidders …
True, there are many offers, but also the market is segmented. There are those who engage in smaller operations, which is our case, are those working in the field of SMEs and those devoted to big business. They are different markets, but I see no slippage or risk.

Success of Microfinance is a post from: Microfinance Organizations