Microfinance News Synopsis: MFIN to appoint four regional ombudsmen

Microfinance Focus, July 5, 2010: Microfinance News Synopsis brings a compilation of industry headlines broadcasted by other news media from across the world.

MFIN to appoint four regional ombudsmen: The Microfinance Institutions Network (MFIN), which has 39 members, would appoint four regional ombudsmen within three months to oversee good governance in the sector, according to MFIN president and Basix chairman Vijay Mahajan. Speaking to the media here on Firday, Mahajan said the step was part of an effort to ensure transparency in activities of MFIN member institutions. The ombudsmen would not be from the MFIs, he said. MFIN, which was formed in December last year, held its first annual general body meeting in Hyderabad on Friday. It appointed Alok Prasad, who earlier was the country director of Citi Microfinance Group, as its chief executive officer Mahajan said MFI industry was working with a mission to reach out to 100 million households by 2020 from the present 25 million families [Business Standard]

LOLC to expand micro finance in North-East: PROPARCO, the private sector arm of the French Development Agency, AFD Group, will sign a 10 million Euro loan on Tuesday in Colombo with Lanka Orix Leasing Company (LOLC) to support the development of the latter’s operations in the North and East of the country. PROPARCO is a financial institution partly held by AFD and private shareholders from European and emerging countries, which is providing long-term resources to the private sector in emerging countries. A statement from the French Embassy said both AFD and PROPARCO have started working in Sri Lanka in the aftermath of the tsunami. LOLC said it has benefited from the support of various international financial institutions for the development of its activities, and PROPARCO has already extended a US$5 million financing to LOLC in 2005 in the framework of the post-tsunami reconstruction programme [Sunday Times]

‘Creating competition the only solution for financial inclusion’: Three decades after Independence, most poor Indians still lack institutionalised access to insurance, savings, remittances and loans. The outcomes are predictable. Migrant labour, carrying hard cash when they head back home, run the risk of being robbed. The poor rely excessively on loans to cope with a crisis — accidents, unpredictable weather, sick cattle — though insurance would be more appropriate. KC Chakrabarty, Deputy Governor of Reserve Bank of India, is concerned over the state of affairs, and rightly so. He talks about regulation of the microfinance sector, under the scanner for its lending practices and corporate misgovernance and on universalising financial services in the next 10 years. The Andhra Pradesh government recently put microfinance institutions (MFI) on notice, saying it would ask the RBI to derecognise some of them operating in the state [Economic Times]

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