MicroRate just published their State of Microfinance Investment: The 2010 MicroRate MIV Survey that highlights the fact that, even with the recession and financial problems around the globe, interest in microfinance funds still remains strong.

Microfinance investment vehicles (MIVs) are a relatively new category of funds that mobilize investments in rich countries and channel them to microfinance institutions (MFIs) in the developing world. “The flow of funding through MIVs is one of the little noticed triumphs of development,” says Sebastian von Stauffenberg, CEO of MicroRate.

While MIVs’ assets continued to grow at a commendable 22% (2009) reaching over $6 billion, prior to the financial crisis, the annual rate of growth was 97% (2007). “Pre-crisis growth rates were not sustainable. MIVs now have an opportunity to strengthen their organizations and lending criteria, focusing on the needs of MFIs,” reflects Sebastian von Stauffenberg.

“While demand from microfinance investors remains, it is being met by weaker demand for funding from MFIs,” says Sebastian von Stauffenberg. “We’ve observed that MFIs tend to borrow from local funding sources first and MIV funding is used during peaks of growth. When MFI growth slows as it has in 2008 and 2009, demand for MIV funding decreases disproportionally. MIVs are now faced with notably higher levels of liquidity than previously observed due to this decrease in MFI’s need for funding.”

The significant increase in liquidity was exacerbated by lending to MFIs by public development finance institutions (DFIs). A liquidity-providing facility was announced by DFIs at the end of 2008, but by the time the funds were disbursed in mid-2009, there was no credit shortage to relieve and instead these funds displaced private funding. Damian von Stauffenberg, founder of MicroRate, comments “One would wish that DFIs were less intent on meeting their lending targets and more attuned to the needs of the institutions they are trying to help.”

You find find further details on MicroRate.com.

Last Friday, Unitus, which provides capital and expertise to microfinance institutions in developing countries, announced that it is closing its doors to its Seattle headquarters and is redirecting its efforts from non-profit microfinance to new social ventures.  This comes as a big suprise, as Unitus has directed $40 million in donations and $30 million in investment capital to microfinance partners over the last 10 years.  Joseph Grenny, chair of the board states:

“For the past decade, Unitus has been working to increase access to capital for the working poor, under the central premise that this vast, underserved segment of the world’s population was a good investment and could be well-served by commercial capital providers. We are gratified that this core belief has been validated—capital markets have embraced microfinance to the extent that there are tens of billions of dollars in microfinance capital now available annually, with additional providers entering the marketplace at an aggressive clip. We now feel that there is greater need for our capital and energy in other areas—which we are currently exploring—aligned with our overarching mission of alleviating poverty through opportunity.”

Ed Bland, the president and COO of Unitus said:

“The fact that we have become largely unnecessary in the microfinance arena is fantastic news and is a tribute to our generous, enlightened donors and the phenomenal staff at Unitus, who worked tirelessly to validate and refine the microfinance model, and advance the operations of our partners. Brigit Helms, our outgoing CEO, merits our gratitude for her outstanding leadership in surveying the global socio-economic landscape, evaluating future options for Unitus and working with the staff to assure that our partners are on solid footing. Outgoing members of the Unitus team can now leave with the assurance that they have contributed to a tremendous legacy of success here, prepared to make a continuing positive difference in the world.”

As Unitus transitions away from microfinance to other strategic areas, Geoff Woolley, a former Unitus board member, will serve as future CEO for the reinvented organization. Bland will remain in his role as acting President and COO. Helms will serve as a key advisor during the organization’s transition. The Unitus Board and executive team are currently considering various strategic opportunities, with the goal to maximize the socio-economic impact for those currently not being served in today’s marketplace.

Unitus has always been a big player in the microfinance industry, especially here in Seattle.  I’ve seen a couple of other news articles on the web with interviews from Unitus employees which all reiterate that Unitus is leaving microfinance in a positive light, and is not leaving a sinking ship.  It hasn’t been announced yet what the new social ventures that Unitus will be involved in are, but I am really eager to see what new initiative is drawing them away from microfinance.  Although it is a big loss having Unitus leave, as long as all of the press releases are true, it’s for the greater good.  I guess we’ll just have to wait and see…

Sources:
Seattle Times
Unitus


SKS Microfinance Ltd, one of the founding and largest microfinance institution based out of India has files its preliminary paperwork on the Indian Capital Market where it aims to raise about $250 million.  If they go IPO, this would make SKS the very first microfinance institution to go public.  Personally, I think this is great.  I’m sure there are pros and cons to this, and there will be people scrutinizing this decision, but I think it is a great idea to help raise money with an initial public offering.  When microfinance platforms first started, people loaned money without any incentives of making money.  Then microfinance platforms such as Microplace came along and gave investors and opening into microfinance.  The next step was donating to MFIs.  First it started with simple donations, but then Microfinance platforms like Dvelo.org came along that allow lenders to give to MFIs as well as entrepreneurs. I think that by SKS offering an IPO, it is the first step to the next level of the natural microfinance progression to gaining more access to capital.  It is going to be interesting to see what kind of reception this gets.
Read the entire Wall Street Journal article for for more details about SKS’s IPO preliminery prospectus.

World Vision recently launched their own Kive-like lending platform named Micro. They are the latest microfinance lending platform to launch, joining more established players such as Kiva, Wokai, and Microplace. It looks like the site was launched in September (also on UrbanMinistry), but I was made aware of the site from SocialEarth’s blog post today. According to their site, World Vision has disbursed 3,500,000 loans totaling more than $1.8 billion since 1993, has 604,000 active entrepreneurs, and loaned $396 million last year — so they are not new to microfinance by any means. Loan sizes range from $25 all the way up to $500+. Currently, Micro only offers loans for entrepreneurs in Rwanda, Mexico, and the Phillipines — but I’d guess they will be adding new markets in the coming year.

I’m certainly a fan of anything that brings microfinance into the spotlight and am thrilled that World Vision is tapping their existing donors to help raise capital for microfinance, but am yet to be convinced software development time and effort should continue to be spent on building technology to power lending platforms. As I said in August, I’d still like to see Kiva.org open source, or white-label, some of their software to other players in the market who want to specialize in a particular geographic area or type of business; that would enable development time and dollars to be spent building features on top of some of the great P2P lending technology that already exists.

For those interested in following Micro’s progress, you can follow them on Twitter here. Head over to SocialEarth for more details.

This month, the Grameen Foundation launched the Ingenuity Fund Challenge.  The Ingenuity Fund is a new program that inspires individuals to start their own fundraising efforts to help and inspire others to become a part of microfinance.  There are millions of people around the world who have ideas, with the Ingenuity Fund, Grameen is trying to tap into that resource.
From November 2009 through February 2010, Challenge participants will develop compelling, creative personal fundraising pages on Grameen Foundation’s website, and raise awareness of and funds for Grameen Foundation’s work through personal networks, social media and other offline activities.  By joining this campaign, not only are participants helping spread the awareness of microfinance, but the participant who has the most ingenious web page and outreach effort will travel abroad with the Grameen Foundation to visit one of their on-the-ground microfinance or technology programs. They’ll document the experience through blogging, photos and videos featured on the Grameen web site, giving a new voice to the global community that believes poverty is unnecessary.

Take the first step by creating a fundraising page!

Click here for the official rules

Evan Carmichael, a journalist, entrepreneur, and consultant runs a blog that ranks number one for resources and information amongst small business owners and entrepreneurs. He has been interviewed by the NY Times, The Wall Street Journal, the National Post, etc, and has business owner showcases that include Henry Ford, Andrew Carnegie to present entrepreneurs like Calvin Klein, Oprah Winfrey, Michael Dell.  Recently Evan has put together a list of the top 50 Social Entrepreneur blogs that are making a huge impact in the world.  The Grameen Foundation, which combines the power of microfinance, technology and innovative solutions to defeat global poverty, has it’s own blog, Creating A World Without Poverty, which was chosen as one of Evan’s top 50.  Check out the other 49 blogs that made the list.

The Green Children are a pop duo from Europe that joined together with Muhammad Yunus in 2006 to help raise money for microfinance.  Recently they joined with the Whole Planet Foundation in a new fundraising campaign for more microfinance projects in India. On August 1, they released their newest song “Hear Me Now” which is available on iTunes.  This is one of the first times that microfinance initiatives have been available on iTunes, which I think is a great milestone. So everyone spread the word because 50% of the proceeds go to fund a new microfinance project!

Source: Mother Nature Network – The Green Children fight poverty on iTunes

There is some exciting news in the microfinance world today – Dr Muhammad Yunus was 1 of 16 recipients awarded a Presidential Medal of Freedom! Given Dr Yunus’ importance to the microfinance movement, it’s no surprise there is lots of chatter about the news on Twitter today. Congratulations, and thank you for everything you’ve done to further the microfinance movement!

Here’s the news release from the Grameen Foundation:

Grameen Foundation is pleased to announce that Nobel Laureate Professor Muhammad Yunus, founder and managing director of Grameen Bank, and member emeritus of Grameen Foundation’s board of directors, has been awarded a 2009 Presidential Medal of Freedom. Dr. Yunus will receive his medal from President Barack Obama at a special White House ceremony on August 12.

In announcing this year’s recipients, President Obama said, “These outstanding men and women represent an incredible diversity of backgrounds… Yet they share one overarching trait: Each has been an agent of change. Each saw an imperfect world and set about improving it, often overcoming great obstacles along the way. “

Dr. Yunus is one of 16 recipients who include Archbishop Desmond Tutu; Mary Robinson, former prime minster of Ireland; Senator Ted Kennedy; Justice Sandra Day O’Conner; and Reverend Dr. Joseph Lowery.

“Professor Muhammad Yunus’ unwavering belief in the power of poor people to help themselves escape poverty is an inspiration to all of us. Thirty-three years after he began working with and financing the entrepreneurial initiative of poor people outside his university classroom in his native Bangladesh, his challenge to all of us remains working to root out poverty wherever it exists. His leadership and advocacy, has helped create a groundswell that has opened up microfinance to more than 150 million poor families around the world. I had the privilege of working with Professor Yunus in Bangladesh for six years and I am especially gratified that he is being honored with the Presidential Medal of Freedom for his unprecedented accomplishments,” said Alex Counts, president of Grameen Foundation.

Deemed the nation’s highest civilian honor, the Presidential Medal of Freedom honors those who have made “an especially meritorious contribution to the security or national interests of the United States or to world peace or to cultural or other significant public or private endeavors.” Past recipients include Mother Teresa, Nelson Mandela, Muhammad Ali and Martin Luther King, Jr.

Click here to send your congratulatory message to Professor Yunus.

Anybody and everybody who has used the internet has most likely used Craigslist at some point or another.  Founded by Craig Newmark, Craigslist is a network of online communities, including sections that cover jobs, personals, housing, forums, services, and classifieds.  This week, Craig Newmark has officially announced that he is joining the Advisory Board for LendForPeace.org . Craig has alway been a supporter of peace initiatives in the Middle East, and with his experience as being one of the pioneers of community building, he should be a great asset to LendForPeace.org and can hopefully create some great microfinance initiatives in the Middle East and within the microfinance community.
Read the entire press release here.

Michael Cimarusti, one of the contestants on Top Chef is competeing for the Grameen Foundation. Top Chef has become a very popular show, so I think that this is great press for not only the Grameen Foundation but microfinance in general.  Check out Michael’s video about why he is supporting Grameen:

In support of Chef Cimarusti’s effort, the Grameen Foundation is asking its supporters to help raise an additional $10,000 in online donations around the episode’s airing on July 22nd.  To help support the Grameen Founation donate here.