Microfinance News Synopsis: World Bank to lend $407 mn for microfinance, quality stats

Microfinance Focus, July 9, 2010: Microfinance News Synopsis brings a compilation of industry headlines broadcasted by other news media from across the world.

World Bank to lend $407 mn for microfinance, quality stats: The World Bank and India today signed two agreements for a total loan of $407 million to scale up microfinance services in unbanked areas and improve capacity to generate quality statistics.The assisted projects are ‘Scaling up Sustainable and Responsible Microfinance Project’ ($300 million loan) and ‘India Statistical Strengthening Project’ ($107 million loan), the government said in a statement. “The objective of the project is to scale up access to sustainable microfinance services to the financially excluded, particularly in under-served areas of India,” it said.The project will be implemented by the Small Industries Development Bank of India (SIDBI) over a period of 5 years. SIDBI will use the funding for on-lending to microfinance institutions (MFIs). The funding, among other things, will enable MFIs to leverage private commercial funds to on-lend larger amounts to the under-served [Economic Times]

LonZim reports strong growth in Zimbabwe microfinance business: Specialist Zimbabwe investment company LonZim (LON:LZM) told investors that the recovering market in Zimbabwe has driven strong growth at the microfinance division of its Paynet business. In June alone, Tradanet collected US$3.5m in principal and interest payments. The company said that since Tradanet’s re-launch in mid-2009, aided by LonZim’s financing, the microfinance business has issued over US$25m payroll based microfinance loans to 22,000 individuals. LonZim said that Tradanet is currently in advanced talks with other financial institutions within Zimbabwe to replicate the successful loan processing service to a wider range of payroll based clients. The company highlighted that “Payroll based microfinance loans are considered by both economists and development organizations to be an important component in the rebuilding of the Zimbabwe economy” [Proactive Investors]

Microfinance institutes urged to go beyond lending: As learned from past experiences, lending money to the poor is not the way to go to eradicate poverty. From this line of thought, the Microfinance Council of the Philippines, Inc (MCPI) is now promoting for the development of social empowerment program and not just economic. Updates on President Benigno Aquino III’s presidency MCPI gathered that the standard micro-enterprise loan was not reaching the poorest and that MFIs need to continue exploring new products and services. MCPI president Ruben de Lara cited some of the practices of MFIs actively implementing social empowerment programs such as the provision of medical insurance to members of the MFI. Here, the Tulay sa Pag-Unlad Inc partnered with the government to provide medical insurance to its members. With a mere P1,200 the whole family of the member is now covered, he said [Sunstar]

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