[Microfinance] -- Microfinance needs active clients and skilled, efficient workforce

Livemint.com, a news organization partnered with the WSJ from India, ran a interesting piece today about the Microfinance industry. Good reading for readers looking for a nice synopsis of what exactly is Microfinance.

I have a included a excerpt of the article I feel is especially relavant and worthy of your attention. If you would like, you can click here to access the greater article from Livemint.com.

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Microfinance calls for active, participating clients as well as skilled and efficient work force. Its main challenge remains recovering timely repayments, considering the unstable nature of the clients’ cash flows, making efficient risk management critical to the success of an MFI.

There is also a need for constructive collaboration between the formal sector finance institutions and MFIs, in which the former provides funds and the latter extends savings and loan facilities to the urban poor. On the demand side, focus must be to organize and make clients more participative. They must be made accountable to the use of the credit given. Savings must be encouraged. On the supply side, the concentration must be to transform MFIs into professionally managed, externally regulated entities. There must be uninterrupted supply of services to clients. The profitability and viability of the service must be given importance. All MFI credit models lack an appropriate legal and financial structure and so there must be a more formal environment to regulate and coordinate the activities of MFIs. Government should provide an enabling legal and regulatory framework which encourages the development of a range of institutions and allow them to operate as recognized financial intermediaries subject to simple supervisory and reporting requirements.

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Kiva Launches Online Microfinance in the United States

[Microfinance] -- United States

The website That Pioneered Online Microloans to Entrepreneurs in Developing Countries Now Brings Same Opportunity to U.S. Entrepreneurs in Partnership With Maria Shriver, First Lady of California

Kiva.org -- the world's first person-to-person micro-lending website -- has launched a pilot expansion in the United States, allowing individuals anywhere to make small loans to U.S. entrepreneurs through the Kiva.org website.

Kiva.org brings its global, online micro-lending platform to the United States at a financial tipping-point for many small businesses. Small businesses represent more than 87 percent of all businesses in the United States, and, on average, these microenterprises are responsible for 900,000 new jobs created per year.(1) Despite these statistics, more than 10 million business owners faced difficulty obtaining business capital -- even before the credit crisis and economic slowdown.

Beginning today on Kiva.org, through partnerships with local microfinance institutions ACCION USA and Opportunity Fund, individuals will be able to browse and lend to small businesses across the United States. Through Kiva's website (www.kiva.org), a loan of $25 can be made to support an entrepreneur, and the specific progress of the loan can be tracked, from initial funding to repayment. Upon receiving repayment, lenders can withdraw their funds or relend to another entrepreneur, thereby continuing the lending cycle.

"Most people think of microfinance as something that helps people in the developing world alone, but the impact of microfinance can be felt in any community that supports creative, industrious entrepreneurs," said Premal Shah, President of Kiva.org. "Kiva's micro-loan model is extremely relevant to low-to-moderate income, U.S. based entrepreneurs, especially given the current economic conditions which makes access to credit a very real problem. The Internet could become a significant source of community driven, low-cost capital for the everyday small business owner in the U.S., and Kiva.org is excited to expand its platform to the U.S. at a time when the need for such capital is greatest."

[Source] -- Marketwire

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Las Flores Group -- Kiva.org
Ayachucho, Peru

Loan request -- $188 loan / per entrepreneur

Donate here @ Kiva.org

The members of Las Flores Community Bank are from the Paltamarca community, in the Pachamarca Distrint, of the Churcampa Province. The Paltamarca community is located at 2800 M.S.N.M. For the most part, the population is engaged in farming activities. They produce corn and raise livestock.

Paulina is married and has seven children. Paulina has a store in her house where she sells general groceries. Paulina needs a loan for 400 PEN to buy groceries and plastic products. Paulina’s dream is for her children to become professionals.

Rufina is married and has five children. Rufina buys small animals and sells them in the different fairs. She also sells food and drinks. Rufina plans to use the loan to buy more products to expand her business. Rufina’s dreams are to expand her business and devote her time to fattening her animals.

Rosa is married and has seven children. Rosa buys and sells small animals and cheese. Rosa needs a loan for 200 PEN to buy a pig. Rosa’s dreams are to educate her children and to devote her time to fattening her animals.

Group Name:	Las Flores Group
Group Members:	Olga Donitila Julia Julia Paulina Ignacia Rosa Rufina Donatilda Martha
Location:	Ayacucho, Peru
Primary Activity:	Retail
Loan Amount:	$1,875.00
Loan Use:	Buy rice, sugar, drinks, small animals and grain
Repayment Term:	9 months - View details below
Lenders Repaid:	Monthly
Date Listed:	Jun 8, 2009
Date Disbursed:	May 30, 2009

A world without poverty -- ACCION & LendtoEndPoverty.org

Microfinance is a topic i've touched upon before on this site (See June 17, 2008 post). In this turbulent time, Microfinance borrowers believe it or not but are still paying back their loans despite the credit crisis.




Microfinance is an effective, long-term solution to ending poverty that empowers poor families with the financial resources they need to improve their lives.

But there is an urgent need to expand these services. Right now, microfinance is only reaching 10-20% of the estimated 500 million people who would benefit from these life-changing opportunities.

As you'll see in the two-minute video, microfinance has the power to improve the lives not just of individuals, but of families and entire communities around the world.

~ ACCION Video Link courtesy of Youtube

Microfinance in focus: IDB to donate $4.3 billion to ACCION over the next 5 years -- ACCION's website now in Spanish

ACCION International Newsletter - July 17, 2008

The Inter-American Development Bank (IDB) has committed $4.3 million to ACCION over the next five years to extend microfinance into rural Latin America. Around the world, the rural poor – often among the most impoverished – are under-served by microfinance.

ACCION will work with five of its long-term partners in Latin America – Banco Ademi in the Dominican Republic, CREDIFE in Ecuador, Financiera FAMA in Nicaragua, FINAMERICA in Colombia and Mibanco in Peru – to overcome barriers and explore new technological and methodological solutions. The project will provide financial services and training to the rural poor that are less expensive, better tailored to the client and easy to replicate.


ACCION website now in Spanish! / ¡La página web de ACCION ahora en Español!
The ACCION International website is now available in Spanish, providing information to Spanish-speaking microfinance enthusiasts about our mission and clients served, as well as our partners, products and services. Visit www.accion.org/espanol to see the new site.



About ACCION

The mission of ACCION International is to give people the tools they need to work their way out of poverty. By providing microloans, business training and other financial services to poor men and women who start their own businesses, ACCION's partner lending organizations help people work their own way up the economic ladder, with dignity and pride. With just a little capital, people can grow their own businesses. They can earn enough to afford basics like running water, better food and schooling for their children.

In a world where three billion people live on less than $2 a day, it is not enough to help 1,000 or even 100,000 individuals. ACCION’s goal is to bring microfinance to tens of millions of people – enough to truly change the world. We know that there will never be enough donations to do this. That's why ACCION has created an anti-poverty strategy that is permanent and self-sustaining.

To read more about ACCION International visit there website - http://www.accion.org

The growth of the Micro-Finance Industry in Peru: Mi Banco of Peru helps thousands overcome poverty

Microfinance, is a economic development tool which aims to reduce poverty and empower the global poor with the skills and means to generate sustainable development through, providing small "micro-loans" and other financial services to poor entrepreneurs whom otherwise lack the knowledge or means to acquire them from the formal sectors in their home countries.

In 2006, over 10,000 Micro-finance Institutions where in active operation within 85 countries; financing 150 million micro-entrepreneurs all over the world and offering an array of financial services otherwise inaccessible for poor people in the developing world.

(Note decided to re-publish, or in this case change the publication time of this post with editions / update from yesterday June 19 to today June 20.)

ACCION International, Established in 1961 and a leader in microfinance since 1973, ACCION has over 45 years of experience in the field of international economic development. Please visit the following pages to learn more about who we are, what we do, and how we do it.

In Peru, ACCION International is partnered with a local Peruvian bank called Mi Banco, which serves as ACCION's main avenue in which to access the Peruvian market on a wide scale, would ordinarily be impossible or very difficult to say the least due to the restrictions in place by formal Peruvian Institutions which at the moment impede many smaller MFI's from evolving into a official bank which can accept deposits and make loans.

I would like to especially extend my gratitude, to a dear professor of mine, whom I was fortunate enough to have on multiple occasions while attending American University, who was a true inspiration. A charismatic and energized teacher who drew upon his real world experience in business, international development and financial management/ investments in over 20 countries-- and a individual whom I truely respect a great deal: Dr. Ghiyath Nakshbendi. International Business Professor at American University Kogod School of Business, he single handedly created and organized the first course to be offered in the Washington D.C area focusing on Micro-Finance. To that I give him my most esteemed gratitude and respect for his forward thinking of mentoring students in what is a very fast growing and continuously more influential field of study and work.

The video below truely describes the power of Microfinance and micro-credit. Consider these ladies, who relied and used micro-credit through to survive... Having to cope with 3 currencies, 4 presidential elections, 1 dictator, hyper inflation, terrorism, violence, abusive husbands... and still prospered beyond what would have in any other shape or matter have been possible.

I use the word prosper loosely here, for they are will working hard, in a hard world and face adversity and challenges on a daily basis. No less it is a incredible example of the power of micro-credit and MFI's and the inspirational ability of such individuals to persevere through such difficult times.

Last, they are a success story so to speak, many examples persist which are sad case studies. Despite this all, progress through the use of Microfinance institutions is being made, especially in comparison to past methods of poverty alleviation.





Great Video below describing what is one of the first cities in the America's... Special thanks to Five Talents International, helping with international development around the world.



And to end this post -- a bit of mixing modern pop culture with helping the dis-empowered, historically ignored, people of the 3rd world.

The power and capabilities of Microfinance to help the global poor is truely unimaginable. I'll personally be investing assets of my own in the Microfinance / Bank / public traded traded company-- Compartamos.

Described here in Businessweek

Summed up in a nice poppish music video / footage from this youtube video