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Explosive Growth of Micro-Credit in China

A note published by Xinhua, the Chinese press agency, reports that in 2011 China’s micro-credit sector witnessed “an explosive growth”. In a statement published in its website the People’s Bank of China asserted that the number of micro-credit companies rose 63.81% year-on-year to reach 4,282 by the end of December. They extended 193.5 billion Yuan of new loans last year, up from 120.2 billion Yuan one year earlier. The growth of microcredit in China has been possible thanks to new official measures. In December the Central Bank launched a project to optimize credit structure and serve the development of the real economy with more emphasis on small and micro-enterprises.

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Financial Inclusion 2020

Two years ago the Center of Financial Inclusion launched an initiative aimed to accelerate progress to achieve a full financial inclusion around the world by 2020. The project has provided tools to enable institutions to make policy, business and resource allocations that will substantially advance the process. In a new text Larry Reed, director of the Microcredit Summit Campaign analyzes the project and assures that the microfinance industry should better understand the client’s needs, capabilities and aspirations: “With this improved understanding, we will be able to provide the full range of financial services they need and deliver them in a way that makes them easy to understand and utilize”.

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Microfinance Growth Fund Invests in Latin America

Managed by Switzerland’s Blue Orchard Finance, the Microfinance Growth Fund (MiGroF) supports microfinance institutions in Latin America. It closed 2011 with US 85 million in outstanding loans and 23 million in un-invested capital in the region. Its total assets are expected to grow between US 140 million and US 250 million. The majority of investments will go to microfinance institutions in Bolivia, Ecuador, Colombia, Mexico and Peru. Blue Orchard is a Swiss commercial microfinance intermediary that provides loans and invests in the equity of microfinance institutions and microfinance network funds.

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Mexico’s National Council for Financial Inclusion

The delivering of financial services at affordable costs to disadvantaged and low income segments of society is a common objective of many central banks and entities among the developing nations. Mexico is no exception: a Presidential decree issued on September 30th 2011 created the National Council for Financial Inclusion, comprised of ten relevant financial authorities, including the Ministry of Finance and the Governor of the Central Bank of México. According to the decree its main functions are analyzing and formulating policy proposals related to financial inclusion, planning and executive financial inclusion policies and programs, coordinating activities on financial education and proposing necessary changes to the regulatory frameworks. According to Juan Manuel Valle, Head of the Banking, Securities and Savings Department at the Mexican Ministry of Finance, “Mexico is convinced of the importance of a coordination body like the National Council of Financial Inclusion and will promote, during its G20 Presidency, the establishment of similar bodies in other countries”.

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India: MF Industry Confident for Recovery

In 2010 India microfinance industry suffered the deepest crisis in its history. Fifteen months after, major players appear to be optimistic for a revival in 2012. There are positive developments including the Microfinance Bill and an easing of liquidity crunch. According to PH Ravikumar, Chairman of SKS Microfinance, the sector is out of trouble: “Banks have started opening up their purses and there is a flow of liquidity in microfinance institutions”. SKS has cleansed his balance sheet and has many plans for the future: “We are looking ahead and trying to grow MFI book in non-AP states. This quarter we expect disbursements to be more that Q2 and Q3 put together. We are working on new schemes of business which will kick in the new fiscal year”.

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