Weekly Round-Up: Microfinance News

Darya Kuts, a Senior Associate at International Resource Group on the Knowledge-Driven Microenterprise Development (KDMD) project, is one of Microlinks' resident Financial Services experts with a strong interest in microfinance. Here is her weekly round-up on the latest in microfinance news:

• For the last five years or so, microfinance was considered the most effective and sustainable tool of economic development. Therefore, the recent microfinance crisis in India, where almost 100 borrowers committed suicides allegedly because they could not repay their loans, attracted much criticism to microfinance in general. Last week, the central bank of India announced caps on interest rates that microfinance institutions (MFIs) can charge their borrowers. Some MFIs fear that the new regulations will result in the “death of microfinance in India”. That subject was also covered in the recent edition of Economist in the article "Grameen Bank: Saint under Siege".
• While browsing through the recent events at the Microfinance Club of New York, I ran across a video recording of a presentation delivered by Asad Mahmood, Managing Director of Deutsche Bank's Global Social Investment Funds. In his presentation Asad focused on comparisons between commercial and social approaches to microfinance, as he compared work of ACCION and Grameen Foundation. Asad pointed out that both approaches have their drawbacks and are not sustainable in the long run, and the only way forward is to create microfinance institutions that combine both approaches (commercial and social).
• This is a very interesting post by David Roodman, where he talks about econometrics in microfinance and how changing variables such as the size of land that a borrower must own in order to qualify for Grameen's loan can change default rates.
• David Roodman also attended the Microfinance Summit 2010 in India, where he presented his ideas in the session on “Rethinking Development in Microfinance: Changing Paradigms.” Some of the other speakers that presented during that session included: Rajiv Lall (Managing Director and CEO of IDFC), Steve Rasmussen (Head Technology Program, CGAP), and Sam Daley Harris (Director, Microcredit Summit Campaign).
• I enjoyed reading an interview of the CEO of Planting Promises, Rocco Falconer, whom I met last year at the TEDxYSE event. Here is a video from Rocco's talk at TED.
• While preparing for the upcoming After Hours Seminar on Mobile Banking and Financial Inclusion, I ran into an interesting presentation that took place in Microfinance Club of New York last year.