Monday, August 31, 2009
Microfinance Institutions Weathering the Economic Storm
While the microfinance industry undoubtedly suffered from the economic slowdown, the industry is surviving amongst deteriorating economic conditions in poor countries and the high cost of capital. To date, no microfinance banks have failed, and many report better repayment rates than traditional corporate banks. The Grameen Bank, founded in 1983, continues to boast a 95% average repayment rate, partly because the majority of its loans are invested in retail shops, small scale agriculture, and crafts making. These businesses are all local in nature and thus partially insulated from the global slowdown.
Microfinance is More Than Loans
The demand for banking services in poor nations often goes well beyond simple loans, according to an article in Time. The demand for depositories in some areas is strong enough that Bank Rakyat in Indonesia has ten depositors for every loan. According to the bank, 30% of those who receive microfinance loans end up using part of the loan for household and personal expenses, not out of a lack of savings, but because their savings are often placed in illiquid assets such as livestock or jewelry.
African Union Troops in Somalia Underfunded
Peacekeeping troops in Somalia are underfunded and undermanned as they battle rebel troops. Six troops died and dozens were sickened from a mysterious illness that proved to be beriberi, a vitamin deficiency usually seen only in famines. There are reports of AU peacekeepers using sticks and cigarette packs to aim mortar shells and the Burundi’s contingent of the AU forces lacks any bomb detection equipment despite a daily threat of roadside bombs. The mission’s budget has never been fully funded and the 8,000 troops pledged, only 5000 of which are actually on the ground, is considered by experts to be about half of what is necessary to bring peace and stability to the country.
Two Civilian UNAMID Workers Kidnapped in Darfur
On Saturday, an unidentified man and woman working for UNAMID as civilians were kidnapped at gunpoint in Darfur. This is the first time staff of UNAMID has been attacked in the region. UNAMID is a joint peacekeeping operation consisting of United Nations and African Union troops.