Credit Crunch Drives another Nail in MFIs’ Coffin

Mumbai, Mar,20. If one didn’t know better, it would seem that the microfinance industry in India is in the throes of heaving its last breath with the flat refusal by banks to lend credit to microfinance institutions (MFIs), as the chances of loan recovery are nothing if not slim. As the credit-crunch precipitated by the refusal by banks to lend credit to MFIs drives another nail in the dying industry, Vijay Mahajan, President of Microfinance Institutions Network (MFIN), an industry group, feels that a clutch of MFIs may be forced to shut down their businesses as early as 1 January. “Come January, and we are dead,” he said.

Vijay Mahajan’s comment came on the sidelines of a banking conference here. MFIN which comprises 44 member companies accounts for nearly 80% of the microfinance lending in India.

Mahajan said MFIs are ready to provide any collateral that they are asked to even if it is equity, but he added that banks have not lent at all to the microfinance sector in the last six weeks. Corporation Bank, CMD, Ramnath Pradeep, said that he had told his MFI clients that any new lending would entail their agreement, of necessity, to the conversion of loans into equity in case of a default.

Bank funding for MFIs has come to a virtual stop ever since the Andhra Pradesh government issued an ordinance to coerce recovery and began capping loan rates which caused lending and collections to nosedive and private-equity backed micro-lenders to delay sale of shares

Jasmine Revolution Smelling in China Now.

Chinese Government is lessening pedals on foreign journalists, after the third week of calls for protests to show unity with the “Jasmine Revolutions” in the Middle East. However there wasn’t noticeable demonstration last week, but the foreign journalists at the scene were stressed.

Stiff security in Beijing is a normal characteristic of the annual legislative session of the National People’s Congress.

The circumstances this year has became more complex by online calls for Chinese citizens to protest pn discrimination in country and to show unity with the so-called "Jasmine Revolutions" across-the-board in the Middle East.

Sunday was the third consecutive week that unidentified organizers called for Chinese to come out to designated demonstration sites in cities across the china. Despite of that there wasn’t any reports of any major incidents.

Last week, Chinese security personals and foreign journalists outnumbered obvious protesters at the designated Beijing site, Wangfujing Street. There was no clear protest, yet unidentified men beat or physically abused foreign journalists at the scene.

This Sunday, Chinese authorities tried to prevent a repeat of those incidents by persuading foreign journalists not to go there. Many reporters were warned they would be expelled from the country if they were caught breaking the law.

The Beijing city government called a news conference Sunday afternoon, at exactly the same time as the would-be demonstration.

Beijing officials echoed central government authorities, in denying that there are changes to formal State Council rules governing journalist activities.

But Li Honghai, with the Beijing Foreign Affairs office, said a booklet distributed at the briefing shows how the city’s laws, in his words, "build on" the State Council’s laws.

Li says Beijing’s policy is that foreign correspondents who want to do reporting in downtown Beijing need to first apply to city authorities for permission.

Authorities did not grant permission to any foreign news organization for any reporting from Wangfujing this Sunday.

Beijing’s spokeswoman, Wang Hui, says stability is the paramount concern. She also responded to questions about the beating of an American journalist last Sunday.

Wang says the incident was reported to the police, who are treating the issue with what she described as "full seriousness" and are conducting an investigation.

At the same time, she did not address a question about how this kind of violence could have happened in broad daylight, in a public place in downtown Beijing, with so many policemen around.

Indonesia Is Capable of Building over 30 Nuclear Reactors

Bangka Belitung (Indonesia), Mar,19. According to an expert staff at the National Nuclear Energy Agency (BATAN), Indonesia has the capacity to build over 30 nuclear reactors, given that it has favorable geological conditions and adequate reserves of materials.

Dr Wawan Purwanto holds the view that every province of Indonesia has the capacity to build a nuclear reactor as the geological conditions and large reserves of materials favor too.

At present, Indonesia has 3 nuclear reactors, one each in Serpong, Yogyakarta and Bandung with a total capacity of 90 MW. The expert also observed that Korea which is only a third of Java Island possesses 20 nuclear reactors whereas China has 30. He also opined that the nuclear energy was cleaner and less expensive compared to other types of energy.

Babel (Bangka Belitung) has been earmarked as a nuclear energy spot in Bangka Barat District.

Corporation Bank Partners with Commonwealth Secretariat to Deliver Youth Entrepreneurship Programme

Mangalore, Mar,19. Corporation Bank and the Commonwealth Secretariat, London have entered a tie-up to help young people and women of rural India access credit for enterprise development activities. A press release quoting Mr Ramnath Pradeep, CMD, Corporation Bank said that a Youth Entrepreneurship Programme would be delivered and piloted in partnership with the Secretariat.

Corporation Bank offers its branchless banking facility through business correspondents to those who lack proper access to finance in rural India as also for those who have to travel long distances to bank branches. The aim of the project is to take technology to the doorstep of villages and bring prosperity to rural India so as to bridge the rural-urban divide.

Mr Steve Cutts, Commonwealth Assistant Secretary-General said that financial inclusion is critical for achieving inclusive growth. It addresses three major issues such as access to financial services, affordability of such services, and the actual utilization of these services.

As stated in the release, the modalities of the programme will be worked out between the two organizations and the programme will be formally launched soon.

SME Segment to Figure High on Federal Bank’s Agenda

Chennai,Mar,19.For the newly appointed Managing Director and CEO of Federal Bank, Mr Shyam Srinivasan, the SME segment is the immediate priority as he, buoyed by the bank’s solid footprints outside India, sets out to exploit opportunities for doing business matching .

Out of its 750 branches, Federal bank has identified 114 branches as SME and is going to establish regional commercial hubs that will have committed teams of sales executives who will aggressively generate business.

The underleveraged treasury products will be given prime attention. In order to secure full value for the SMEs domestic as well as international products will have to be rolled out, as several of the SMEs do cross-border transactions. The under-marketed foreign exchange products also need to be spotlighted. Given that several of the SMEs are looking beyond Indian shores, Federal Bank should be leveraging its relationship and scaling up its capability.

Federal Bank expects to boost the risk management by setting up 13 regional credit hubs. The bank already enjoys good technology platform like Finacle, CBS and also has the Internet and mobile banking.