All Publications

• 

  Indian Microfinance: Looking Beyond The AP Act and its Devastating Impact on the Poor

  PUBLISHED: March, 2012

  Tags: Financial Services

  Region: Asia

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• 

  Finish Line in Sight but Hurdles Remain: A Perspective on the Draft Microfinance Institutions Bill 2011

  PUBLISHED: July, 2011

  Tags: Financial Services

  Region: Asia

  READ MORE
• 

  Beyond Profit Special Issue: Property Rights, Identity and Dignity

  PUBLISHED: March, 2011

  Tags: Financial Services

  Region: Asia

  READ MORE
• 

  The Perfect Balancing Act with an Imperfect Outcome: Malegam Committee Recommendations on Microfinance Sector

  PUBLISHED: February, 2011

  READ MORE
• 

  The Perfect Balancing Act with an Imperfect Outcome: Malegam Committee Recommendations on Microfinance Sector

  PUBLISHED: February, 2011

  Tags: Financial Services

  Region: Asia

  READ MORE
• 

  Finish Line in Sight But Hurdles Remain: A Perspective on the Draft Micro Finance Nstitutions (Development and Regulation) Bill 2011

  PUBLISHED: January, 2011

  READ MORE
• 

  The Perfect Balancing Act with an Imperfect Outcome: Malegam Committee Recommendations on Microfinance Sector

  PUBLISHED: January, 2011

  READ MORE
• 

  Opportunities for Private Sector Engagement in Urban Climate Change Resilience Building

  PUBLISHED: December, 2010

  Tags: Energy

  Region: Asia

  READ MORE
• 

  Indian Microfinance Crisis of 2010: Finding the Silver Lining An Update to the Intellecap White Paper Released on October 25, 2010

  PUBLISHED: October, 2010

  READ MORE
• 

  Indian Microfinance Crisis of 2010: Turf War or a Battle of Intentions? An Intellecap White Paper

  PUBLISHED: October, 2010

  READ MORE


Indian Microfinance: Looking Beyond The AP Act and its Devastating Impact on the Poor
PUBLISHED: March, 2012
In December 2010 the Government of Andhra Pradesh (“AP”) passed a law (the “AP Act”, originally conceived in October 2010) which effectively shut down private sector microfinance in the State. The AP Government stated that its goal was to protect the poor. Now, 18 months later, the impact of the AP Act is clear: rather than protecting the poor, it has had the opposite effect, harming the poor by starving them of access to credit and basic financial services.
A study by Legatum Ventures, with contributions from Intellecap.
Download Pdf Here


Finish Line in Sight but Hurdles Remain: A Perspective on the Draft Microfinance Institutions Bill 2011
PUBLISHED: July, 2011
The Ministry of Finance of the Government of India unveiled draft legislation earlier this month,
aimed at bringing the microfinance industry within a central regulatory framework, and has
opened it up for comment and feedback from various stakeholders.
The draft „Micro Finance Institutions (Development and Regulation) Bill 2011‟ comes nearly
nine months after the Andhra Pradesh State Government passed an ordinance – later passed into
state law – that imposed stringent restrictions on microfinance firms, particularly in terms of
recovery and interest rates, and practically froze bank lending to the sector.
The size of the microfinance industry in India is estimated to be about Rs24,000 crore, of which
Andhra Pradesh alone is estimated to account for almost a quarter, or Rs7,400 crore.
The AP law practically paralysed the microfinance industry, forcing some of the largest MFIs to
enter corporate debt restructuring programs. The effect on smaller firms has been even more
catastrophic.
Even now, the AP government is defending a court case filed in the state High Court against its
MFI Act.
The draft Bill, though late in coming, is welcome, and will help resolve long-festering
uncertainties about interest rates, margins, and an appropriate regulatory structure for the
industry, while freeing up MFIs from the purview of differing state-level moneylending statutes.
However, the industry might have to wait a while before it can breathe entirely easy – the
monsoon session of Parliament is due to run August 1 through September 8, and it is anybody‟s
guess if the Bill will be taken up in this session, or indeed if it will pass.
Download Pdf Here


Beyond Profit Special Issue: Property Rights, Identity and Dignity
PUBLISHED: March, 2011
Beyond Profit was a social enterprise magazine launched by Intellecap in 2009 to present the stories, people and ideas behind innovative social enterprises. It brought together first-hand insights and expert commentary across Intellecap’s Focus Sectors and related themes.
This special issue of Beyond Profit looks into “property rights” – an important, but often overlooked, aspect of poverty alleviation. Tackling the problem of how to improve access to and implementation of property rights poses real challenges to policy-makers and development practitioners because of the complexity of the issue and its controversial nature.
Download Pdf Here


The Perfect Balancing Act with an Imperfect Outcome: Malegam Committee Recommendations on Microfinance Sector
PUBLISHED: February, 2011
The Malegam Committee was constituted by the Reserve Bank of India’ as a Sub-Committee of its Board of Directors (referred to in this paper as “the Malegam Committee” or simply “the Committee”), to review the definition and practice of microfinance in India, delineate a regulatory framework, and make related recommendations.
The Committee’s recommendations” were released on 19 January 2011. This paper represents Intellecap’s effort to examine the Malegam Committee’s recommendations for the private-sector commercial microfinance industry (referred to in this paper as “the industry”), some questions that its recommendations raise, and the impact of its recommendations on the industry.
Download Pdf Here


The Perfect Balancing Act with an Imperfect Outcome: Malegam Committee Recommendations on Microfinance Sector
PUBLISHED: February, 2011
In the fall of 2010, a microfinance crisis started in the southern Indian state of Andhra Pradesh, and had implications for the industry nationwide. One of these had been the recommendations put forth to the Reserve Bank of India (RBI) by the Malegam Committee. Intellecap released a white paper responding to these recommendations.
Download Pdf Here


Finish Line in Sight But Hurdles Remain: A Perspective on the Draft Micro Finance Nstitutions (Development and Regulation) Bill 2011
PUBLISHED: January, 2011
The Ministry of Finance of the Government of India unveiled draft legislation earlier this month, aimed at bringing the microfinance industry within a central regulatory framework, and has opened it up for comment and feedback from various stakeholders.
The draft „Micro Finance Institutions (Development and Regulation) Bill 2011‟ comes nearly nine months after the Andhra Pradesh State Government passed an ordinance – later passed into state law – that imposed stringent restrictions on microfinance firms, particularly in terms of recovery and interest rates, and practically froze bank lending to the sector.
The size of the microfinance industry in India is estimated to be about Rs24,000 crore, of which Andhra Pradesh alone is estimated to account for almost a quarter, or Rs7,400 crore.
The AP law practically paralysed the microfinance industry, forcing some of the largest MFIs to enter corporate debt restructuring programs. The effect on smaller firms has been even more catastrophic.
Even now, the AP government is defending a court case filed in the state High Court against its MFI Act.
The draft Bill, though late in coming, is welcome, and will help resolve long-festering uncertainties about interest rates, margins, and an appropriate regulatory structure for the industry, while freeing up MFIs from the purview of differing state-level moneylending statutes.
Download Pdf Here


The Perfect Balancing Act with an Imperfect Outcome: Malegam Committee Recommendations on Microfinance Sector
PUBLISHED: January, 2011
The Malegam Committee was constituted by the Reserve Bank of India’ as a Sub-Committee of its Board of Directors (referred to in this paper as “the Malegam Committee” or simply “the Committee”), to review the definition and practice of microfinance in India, delineate a regulatory framework, and make related recommendations.
The Committee’s recommendations” were released on 19 January 2011. This paper represents Intellecap’s effort to examine the Malegam Committee’s recommendations for the private-sector commercial microfinance industry (referred to in this paper as “the industry”), some questions that its recommendations raise, and the impact of its recommendations on the industry.
Download Pdf Here


Opportunities for Private Sector Engagement in Urban Climate Change Resilience Building
PUBLISHED: December, 2010
Asian cities are especially susceptible to unpredictable environmental change, as these cities are expected to account for more than 60 percent of global population growth in the next 30 years.
Measures that help the urban poor in Asian cities adapt to the changing climate and build their resilience and capacity to respond dynamically to its adverse impacts, are essential, and call for attention, funding and action from civil society, the public and private sectors. Private sector engagement in Urban Climate Change Resilience Building (UCCRB) is particularly important, as the need is vast, and grant funding from governments and donors is limited.
This new report, supported by the Rockefeller Foundation, aims to identify business opportunities in UCCRB, and to understand the drivers and inhibitors to private sector participation.
Download Pdf Here


Indian Microfinance Crisis of 2010: Finding the Silver Lining An Update to the Intellecap White Paper Released on October 25, 2010
PUBLISHED: October, 2010
On 15 October 2010, the Government of the state of Andhra Pradesh (GoAP) in India promulgated an Ordinancei attempting to regulate the microfinance industry in the state. Intellecap, the India-based social business advisory firm, released a White Paperii which sought to provide an overview of events leading up to the promulgation of the Ordinance, an assessment of the implications of its provisions, and an impartial evaluation of its impact on the industry.
Industry reactions to the Ordinance were initially uniformly negative. However, events in the last three weeks have significantly changed stakeholder perceptions. Anecdotal evidence from the field appears to be moderating extreme positions in both government and industry. The Government appears to have toned down some of its rhetoric, and the industry has begun to acknowledge that the Ordinance provides the basis for some desirable cleaning-up. It is possible that the current crisis could become a turning point, leading to a more balanced, better-governed and better-understood microfinance industry. This Update to Intellecap‟s White Paper offers a view on the changing perceptions of industry stakeholders.
Clean-up After the Storm
The abruptness of the GoAP‟s action in promulgating the Ordinance, with no consultation, took most industry stakeholders by surprise. The passage of the Ordinance significantly influenced the perceptions of global investors (and global media) of risks in India, and in private sector involvement in services to the poor – not good for India, or for poverty reduction. Indian media reacted initially with characteristic sensationalism, but that has now given way to relatively balanced and, more importantly, productive action on the ground.
Download Pdf Here


Indian Microfinance Crisis of 2010: Turf War or a Battle of Intentions? An Intellecap White Paper
PUBLISHED: October, 2010
Social businesses like microfinance, due to their sensitive client base, need to walk a fine line to balance their
commercial interests with the social and moral expectations of a wide variety of stakeholders. The range of
stakeholders may include the State, investors, and the public at large, besides clients and regulators. Indian
microfinance institutions (MFIs) have done an admirable job of managing the commercial side of their
business; yet they have often struggled to manage the inherent contradictions of running such businesses at
scale while satisfying non-commercial stakeholders, and have often run afoul of the media and the
government. Recent allegations against MFIs by the media and the State include coercive practices, lack of
transparency, and “usurious” interest rates. These accusations have resulted in the passage of an Ordinance
by the State Government of Andhra Pradesh (AP). This white paper by Intellecap, an India-based social
business advisory firm, analyzes the buildup to the crisis in AP, attempts to revisit some fundamentals of the
business, and questions the effectiveness of radical approaches to multiple bottom-line business by the State
and the media.
Download Pdf Here