GLOBAL TRUST BANK INVESTS IN SHARE

Collaboration with the commercial banks and corporate companies in India is considered to be an achievement from SHARE’s point of view.

SHARE has been successful in mobilizing financial resources as a loan from Global Trust Bank (GTB), Hyderabad. Two million has been sanctioned & released by GTB for on lending. With these additional financial resources, SHARE plans to open 6 new branches taking the total number of branches to 23. These branches will provide financial and support services to about 46,000 clients. These funds are forwarded to SHARE at 10.5% plus 2.5% tax on interest by GTB. NABARD will be refinancing the same to GTB at 6.5%. Based on the utilization of these funds, GTB will invest 2 crores in SHARE in the near future.

COMMERCIAL BANKS IN MICROFINANCE

A new publication titled The Role of Commercial Banks in Microfinance: Asia-Pacific Region has been published by FDC. The report was prepared by consultant Ms. Ruth Goodwin-Green, and funded by AusAID. The study was based on in-depth interviews with over 40 bankers from 22 banks in India, the Philippines and Australia, and from speaking with 17 banks in the other countries in the Banking With The Poor (BWTP) Network.

Only four commercial banks in the region had profitable microfinance businesses. Two of these are network members, Bank Rakyat Indonesia (BRI) and Hatton National Bank in Sri Lanka. In 1996-97, BRI made loans of $ 1.7 billion to 2.5 million clients through its Unit Desa system, making a profit of $ 170 million. The success of this system can be attributed primarily to adherence to the fundamentals of banking, including the provision of competitive saving services.

By contrast, the majority of commercial banks that undertook microfinance lending did so only because it was required of them by their governments. These commercial bankers distrust the poor and NGOs. They experience poor repayment, look at the high costs, and assume that the problem is with the poor rather than with the design or delivery of their bank’s products.

The study found that the most effective way for governments to encourage commercial banks to become involved in microfinance is to maintain sound macroeconomic policies and ensure an appropriate regulatory and prudential framework.

The study also identified a number of key success factors for microfinance in commercial banks:

• create a small specialized bank or a separate microfinance unit within a large commercial bank
• treat savings as equally important as lending
• charge interest rates to cover all the costs of the lending products
• ensure excellent management information systems and portfolio management
• recruit staff from outside the bank and /or give staff specialist training, and
• find a champion or visionary who will see the program through to success.

THE MICROCREDITCONFERENCE IN THE UK

A Conference on Microcredit and Enterprise: Experience and Innovation will be held in Norwich on April 4th and 5th, 2000.

The aims of the conference are to:

• Raise the profile of microcredit in the UK
• Learn from international experience
• Launch a national network/ umbrella organization
• Share information and experience
• Inspire and support new initiatives
• Influence policy

• NGO practitioner organizations
• Policy, funding organizations and banks
• Statutory bodies

• Mitty Owens - Association of Enterprise Opportunity (USA) - 'The AEO as a model for a national micro-credit and enterprise network' (confirmed)
• The Prime Minister, Tony Blair - 'Equal access to Enterprise in the UK'
• Macolm Hayday, CAF Investors in Society - The Big Picture (confirmed)
• Andrew Robinson, Nat West - Banks and Micro-credit (confirmed)
• Elaine Kempson - Financial Exclusion and Enterprise.
• Ruth Pearson, UEA - Learning from the South (confirmed).
• Erika Watson, WEETU - The Full Circle Fund (confirmed)

TRAINING ON GRAMEEN BASICS

A training program on Grameen Basics jointly organized by GT & GB was held from July 6 – 30, 1999 for 14 staff from GT funded projects. Participants from India, Nepal, Philippines, Kyrghystan and Bosnia participated in the training program. Another similar training program was held from September 4 – 13, 1999, for 8 staff from 7 GT funded projects working in Bangladesh. After giving necessary briefing on the program, the trainees were sent for field training at different Grameen Bank branch offices in the rural areas of Bangladesh. In the field, they practically learnt how to form groups, manage centres, propose loans and disburse those. Moreover, they learnt in detail about GB financial system, i.e.; loan supervision, loan recovery, budgets, planning, accounting, group fund savings, loan proposal planning and monitoring. At the GB Training Centre in Dhaka, they were imparted with class room training.

33RD INTERNATIONALDIALOGUE PROGRAM

Grameen Bank and Grameen Trust had jointly organized the 33^rd International Dialogue program. It was held from September 19 to October 1, 1999. Eleven participants from Myanmar, India, Argentina, Indonesia and Korea attended the program.

Dr. Djumila Zain, "Mitra Karya East Java (MKEJ), from Indonesia and Mr. Nurul Amin from "Myanmar Grameen Replication Project" attended the Dialogue as resource persons, both of them shared their own experiences of Grameen replication in their respective countries.

CEP FUND ACHIEVES INSTITUTIONAL VIABILITY

For the very first time, a Grameen Trust-funded Grameen Bank replication project has achieved full institutional viability. The Capital Aid Fund for Employment of the Poor (CEP Fund), belonging to the Ho Chi Minh City Labour Confederation in Vietnam, is currently serving nearly 22,000 poor women with microcredit, and has become financially self-sufficient in the process.

Grameen Trust has provided a total of $ 145,500 for CEP Fund’s Grameen replication project through three separate agreements, the first of which was signed in September, 1992. By June 1999, the project had disbursed $ 7,691,230 to the poorest women in the urban-fringe areas of Ho Chi Minh City, with a repayment rate of 100%. Loans have been used primarily for small trade, animal husbandry and handicrafts.

CEP Fund has concentrated on the strengthening of its human resources and management system over the past five years, with a view to effective poverty reduction while expanding in a sustainable manner. It requires external funds for training of new and existing staff in order to achieve its target of serving 88,836 poor borrowers with microcredit by the year 2005.