the mif blog

Stories of inspiring entrepreneurs and organizations, discussion and commentary of new trends in private sector development, and the latest events and publications.

Microfinance places hope in big data, but other things are also needed

By Fermín Vivanco

What a micro lender does after giving a loan matters too

Microfinance was created in part because banks were not meeting the needs of the large segments of the population. One of the barriers to reaching those segments was the fact that formal credit records for those clients were nonexistent, leading microfinance institutions to consider other information instead. And for decades, the microcredit industry has considered two main factors when doing credit analysis: ability and willingness to pay.  

$180 million on the line: Bank de-risking reaches the Caribbean

By Rebecca Rouse

There has been much conversation in recent months about the effective shut down of remittance services to Somalia from key sending markets such as the United Kingdom, United States and Australia. Somalia receives more than $1.3 billion in remittances a year, representing at least a quarter its GDP and far outweighing international aid. However, fears surrounding money laundering and terrorism financing have led banks to determine that holding remittance service provider accounts is simply too much of a risk, leading bank partners to drop their accounts until there were simply none left. Humanitarian workers fear that these moves will destroy the vital lifelines that keep many Somali families afloat. If remittances hold equal importance in some Latin American economies, should stakeholders fear that this trend could spread to our region?

Una historia de crecimiento e inclusión financiera

By Martha Lucía Muñoz

Hace 30 años en Popayán, una pequeña ciudad del departamento de Cauca en Colombia, rodeada por tierras aptas para cultivar café, criar animales, y devastada por el gran sismo de 1983, vio nacer y crecer una entidad que ayudaría a crecer la región del suroeste de Colombia.  Un grupo de mujeres visionarias, lideradas por Leonor de Melo, decidieron en 1985 convertirse en agentes de cambio para el desarrollo económico de la región, y con el aporte individual de US$4 crearon laFundación Mundo Mujer de Popayán (FMMP), reuniendo un capital de US$80 para apoyar a las mujeres que no podían acceder a créditos financieros. La FMMP comenzó con una metodología de otorgamiento de créditos oportunos, de fácil acceso y rápidos que se fueron extendiendo también a los microempresarios del sector rural, y. con el pasar de los años, esta institución se convirtió en la principal institución microfinanciera de la zona. Esta es una historia de crecimiento de una entidad, en donde el apoyo otorgado por el FOMIN, permitió que hoy la institución pueda acceder a otro tipo de instrumentos y montos más grandes de préstamos.

What we’ve learned about remittance recipients in the Dominican Republic

By Guest

 By Rocío González del Rey Armenteros

Unlike the majority of remittance recipient countries, the Dominican Republic has the peculiarity of handling the vast majority of its remittance transfers as cash delivered to their home. Just 3.5% of Dominican remittance recipients receive their remittances as a direct deposit to a bank account. Though it doesn’t get much more comfortable than receiving your remittances in cash at your doorstep, the home delivery of remittances represents a major limitation for financial inclusion efforts. These clients are accustomed to the service and are resistant to traveling to a branch office to pick up their money or access other financial products and services. 

CMF VI food for thought: Carib-Cap III and other ideas about future microfinance development in the Caribbean

By Ryan Tang

Panelists share lessons learned from Carib-Cap

During the second session of the Caribbean Microfinance Forum VI (CMF VI), one of the panelists, Curven Whyte, Microfinance Coordinator of a major Jamaican credit union, cited the growth in the industry brought about by the Caribbean Microfinance Capacity Building projects (Carib-Cap) I and II and called for a Carib-Cap III. The audience applauded and I couldn’t help but smile because at the CMF last year, the donors—MIF included—had said they would continue supporting microfinance in the Caribbean but not through a regional, multi-donor Carib-Cap III project. Nevertheless, throughout the remainder of the CMF VI, calls for a Carib-Cap III resounded and it became evident that many microfinance stakeholders thought Carib-Cap I and II had accomplished a lot but that need for additional support remained in the Caribbean.