Financial Inclusion Newsflash

"The model had its genesis as a poverty alleviation tool, focused on economic and social upliftment of the marginalised sections" "But, in their quest for growth and profitability, the social objective of MFIs—to bring in improvement in the lives of the marginalised sections of the society—seems to have been gradually eroding." - Jagriti Bhattacharyya

This week, the Microfinance Society’s Research Team summarizes “MFIs in India: Need social impact monitoring”, an opinion article by Jagriti Bhattacharyya, research scholar at IISc, Bangalore. He addresses a prominent debate on impact central to the world of Microfinance - staying afloat without neglecting the reason they exist: to create financial inclusion, reduce poverty and improve living standards.

“COVID-19 threatens 20 million jobs in Africa as small business owners close shops under the economic strain from the outbreak” “It’s essential that we support SMEs right now in Africa because they are the beating heart of the continent’s economies.” - Neanda Salvaterra

This week, the Microfinance Society’s Research Team summarizes “Microfinance Institutions Could Help African Entrepreneurs Beat Back the Pandemic”, an opinion article by Neanda Salvaterra, a reporter at Karma with almost a decade of experience working at The Wall Street Journal, where she covered the oil business, the global transition to renewable energy, national elections in Nigeria and Angola and U.S. foreign policy on Africa. She addresses the key roles that financing institutions have in providing liquidity to Microfinance companies, and the importance of Microfinance in African Entrepreneurs weathering the pandemic.

This week, the Microfinance Society’s Research Team summarizes "Microfinance industry may require external capital of Rs 8,500-10,000 crore: Icra", highlighting the problems faced by India's Microfinance Sector along with some recommendations for regulatory authorities.

While borrowers around the world have been hit hard by the Covid pandemic, the microfinance sector, particularly that in India, has suffered significantly. The sector has morphed into a global enterprise over the years offering tremendous reach, covering over 140 million borrowers, 80% of which are women. Yet, the pandemic has unravelled some of this progress, causing devastating effects such as soaring default rates on loans as borrowers are unable to repay their loans. In this week's newsbite, Kristin breaks down the current situation in India and suggests several recommendations.

“CBIRC and PBOC issued draft rules for online microlenders on Monday, days before Ant makes its public markets debut. Rules could crimp profits of online lending platforms, analysts say”

This week, the Microfinance Society Research Team summarizes “What China’s clampdown on online microlending means for fintech giant Ant Group”, written by Alison Tudor-Ackroyd who is the Wall Street Journal's Asia Pacific Senior Finance Correspondent and previously Reuters' Asia Private Equity Correspondent. She has more than 20 years' experience reporting on finance while based in London, Milan, Paris, Tokyo and now Hong Kong. Baron’s highlights the adverse implications that new rules on microlending has on Microfinance Institutions.