Archive for Microfinance
Cashpor Micro Credit – India’s Finest Microfinance Institution
Cashpor Micro Credit - India’s finest Microfinance Institution, Amongst the world’s best.
Cutting the clutter:
- Cashpor Micro Credit is a profitable Microfinance Institution, headquartered in India.
- Cashpor Micro Credit was India’s first MFI to receive an Equity Investment, from a pedigree investor i.e. Vinod Khosla (co founder of Sun Microsystems and venture capitalist, ex KPCB). Read here
- Cashpor works in India’s poorest ‘n most neglected areas (Read: Bihar and Uttar Pradesh) in a truly very focused manner.
- Cashpor genuinely and only targets the poorest of the poor clients through its unique Cashpor Housing Index.
- Cashpor voluntarily charges amongst the lowest rates of interest from its clients in India. No hidden charges, whatsoever.
- Cashpor has a brilliantly talented management team comprising of senior bankers led the almost legendary Prof David Gibbons
- Cashpor has never defaulted on any financial institution credit facility till date
- Cashpor employees are extremely motivated and believe in the vision of the company, which has resulted in low attrition.
- Above all, Cashpor is sincere, fair, transparent and ethical with all its stakeholders – Employees, Clients, Investor, Bank, Regulator and the Indian Microfinance Sector
Other Interesting Facts:
- Cashpor is headquartered in Varanasi, One of the oldest and holiest cities of India. Varanasi was voted as amongst the top ten places to visit before something by Lonely Planet.
- Varanasi or Banaras is the oldest living city in the world. Established in 7th century B.C., Varanasi is the holiest of the holy cities to Hindus. The sacred river Ganga (Ganges) flows towards the north here which is considered very auspicious by the Hindus. The most famous of all temples of Lord Shiva is situated here(Temple of Lord Viswanath). Varanasi is full of temples, probably thousands of temples are here. There are about 365 GHATs or places of bathing on the river Ganga.
- These GHATs are always crowded with devotees & pilgrims, & there are hundreds of priests to help them in their sacred rights. At evening, priests perform AARTI (worship with lighted lamps) at some of the more famous GHATs, & the scene is just beyond descriptions. Thousands of people attend this AARTI ceremony, including hundreds of foreigners. With its narrow streets teeming with people as well as (sacred) bulls, Varanasi is a must for all the foreign visitors to India who want to have a glimpse of the eternal India & Indian culture.
- Every fifth shop in Varanasi either sells Paan (Betel Leaf with a dozen filings of Indian herbs) or Milk/Milk Products
- Certain days of the year, Thandai (Thick shake made from milk, pistachios, almonds and cashew nuts) laced with marijuana cream is consumed by devotees of Shiva (Who George Clooney refers to The God of Death, in the superb Michael Clayton)
- Varanasi is home to the Banaras Hindu University, housed in some 1250 acres.
Microfinance – No.1 CSR Activity – TNS/The Times of India Survey
As per a recent TNS/Times of India Survey, The priority areas that the respondents felt ought to be covered under CSR initiatives included microfinance (99%), environment (81%), health (81%), education (82%), women empowerment (63%), livelihood promotion (62%), sanitation (61%), HIV/AIDS (54%), child care (55%), slum improvement (50%), disaster management (36%) and agricultural development (29%) .
http://timesofindia.indiatimes.com/Delhi/EVERYBODYS_BUSINESS/articleshow/3375706.cms
Source: The Times of India
The 12 Point Guide: Camouflaging an NBFC to an MFI
The Rules of the Game:
1. Rename the NBFC to some ethnic-Hindi name meaning and/or Progress,Happiness,Development,Light,Opportunity…
2. VOW never to refer your operations as business BUT always as “Program/Program Outreach..”
3. Re-Write on the website/print brochures your firm’s vision, focusing only on “alleviating poverty/improving livelihoods”
4. Re-Brand existing loan products by affixing/prefixing/suffixing “micro” to them
5. Edit your reporting style. Refer to Assets as “Borrowers/Micro Loans/Program Outreach”
6. Rating – get the NBFC rated by a rating co. specializing in MFI ratings, just for the heck of it !
7. Partner with some renowned technical advisory firm, just for the heck of it !
8. Obtain a Membership of some industry association of Microfinance, just for the heck of it !
9. Attend ALL industry events – seminars, conferences etc
10. Appoint a sector specialist debt advisor to help you raise debt from commercial banks, he will try to position you well.
11. Approach VC firms for possible equity dilution (they’ll prefer you over “not for profit” firms, anyway !)
12. Send periodic emails to the entire sector regarding the above, periodically, refer to them as milestones !
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Higher CAR – RBI Draft Guidelines for NBFC’s ; WILL Impact MFI’s
The draft guidelines have increased CAR of systemically-important non-deposit-taking NBFCs from 10% to 12% immediately, and to 15% by April 1, 2009. This would limit the way the NBFCs leverage their capital. Some experts say that with a 15% CAR, MFIs can leverage only up to five times.
The regulator’s concern was triggered because NBFCs raised short-term resources to fund their asset books.
So far, only deposit-taking NBFCs were subject to prudential regulations on income recognition, asset classification and provisioning capital adequacy, among others, while non-deposit-taking NBFCs were subject to minimal regulation. Most of the systemically-important NBFCs are those promoted by banks. There are 173 systemically-important non-deposit-taking NBFCs.
According to RBI, “In view of recent international developments, the risk associated with highly-leveraged borrowings and the reliance on short-term funds by some NBFCs, there have been concerns regarding the enhanced systemic risk associated with the activities of the entities.”
Non-deposit-taking NBFCs with an asset size of over Rs 100 crore would be considered NBFC-ND-SI, and a new regulatory framework involving prescription of capital adequacy and exposure norms for such NBFC-ND-SI was put in place from April 1, 2007. The companies were advised to maintain a minimum capital-to-risk weighted assets (CRAR) ratio of 10%.
The Big Trouble In Small Loans – Time
Interesting Article – Must Read, Click here to read the article in TIME
Starship Enterprise – M2i
M2i - A 2 year old, truly promising, management consulting firm for MFI’s was recently covered by The Economic Times !
Click here to read the Economic Times writeup – Starship Enterprise.
Started by a team of highly motivated IRMA + Ex-Mcril Alumni, M2i has advised, mentored, trained ”several” MFI’s since inception. Website: www.m2iconsulting.com/.
Client List Sampler (source: ET): Rashtriya Grameen Vikas Nidhi (RGVN), Sa-Dhan, Development Alternatives, ESAF, Cashpor, BISWA, Nirmaan Bharati,Appropriate Technology India (ATI).
Report of the Committee on Financial Inclusion
The Report of the Committee on Financial Inclusion is finally out !! Please download it by clicking this link.
Background of the Report: The Government in June 2006, had constituted a Committee to prepare a strategy of ‘Financial Inclusion’. The Ten Member Committee, was constituted under the Chairmanship of Dr. C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister. The terms of reference of the Committee included:
i) To study the pattern of exclusion from access to financial services disaggregated by region, gender and occupational structure.
ii) To identify the barriers confronted by vulnerable groups in accessing credit and financial services, including supply demand and institutional constraints.
iii) To review the international experience in implementing policies for financial inclusion and examine their relevance/applicability to India.
iv) To suggest
- strategy to extend financial services to small and marginal farmers and other vulnerable groups, including measures to streamline and simplify procedures, reduce transaction costs and make the operations transparent.
- measures including institutional changes to be undertaken by the financial sector to implement the proposed strategy of financial inclusion.
- a monitoring mechanism to assess the quality and quantum of financial inclusion including indicators for assessing progress.
Government had been concerned that despite the vast expansion, modernization and diversification of ownership of financial institutions, a large number of vulnerable groups remain excluded from the opportunities and services provided by the financial sector. Such excluded groups include women, small and marginal farmers, people in the unorganized sector, the self employed and the pensioners. Government was anxious to correct this situation and extend the reach of the financial sector to such vulnerable group by minimizing, if not eliminating, the formal and informal barriers to access encountered by such groups.
The members of the Committee were Shri Vinod Rai, Special Secretary, Ministry of Finance, Dr. (Ms.) Rohini Nayyar, Adviser, Rural Development, Shri M.B.N. Rao, CMD, Canara Bank, Shri Yogesh Agarwal, MD, State Bank of Patiala, Prof. Mahinder Dev, Director, Centre for Economic and Social Studies, Hyderabad, Shri Vijay Mahajan, CEO, BASIX, Shri R. Gopalkrishnan, ED, TATA Sons, Shri A.P. Fernandes, Director, MYRADA and Dr. Y.S.P. Thorat, Chairman, NABARD.(PIB)
RANGDE.ORG Launched, As promised, On 26th January 2008.
RangDe.Org has been launched today. I had met the founders, Smita and Ram, both highly motivated and wanting to make a difference. They want to reduce the rate of interest to the final consumer. They have a point.
The solution is www.RangDe.org , an online P2P lending platform like KIVA.
Best Wishes to Smita and Ram !!
Deutsche Bank – Microfinance – An Emerging Business Opportunity
Deutsche Bank – Microfinance – An Emerging Business Opportunity - Click to Download.
Must Read, Informative, Useful and Interesting Report !!
Background: The report examines the attractiveness of microfinance for private sector investors. The report represents one of the first formal research paper on microfinance investments produced by a major financial institution. The study suggests that microfinance will evolve into a niche investment product that will increasingly attract both retail and institutional investors. Microfinance is also said to benefit from a further strong rise in socially responsible investments and to increasingly appeal to a wider range of commercial investors. As a result, the study forecasts individual and institutional investments to rise to USD 20 billion by 2015.
India Financial Sector Technology – Vision 2010
The Reserve Bank of India on Friday had placed on its website the revised draft Financial Sector Technology Vision (2008-10) for public comments.
Download the document for your reference. Interesting Read !!
DB Online P2P Lending – Interesting Report
Good Report by DB Research on Online P2P Lending. Click to download the DB Research Report – Online P2P Lending
