News Round-up for Friday, July 19 happy hour reading! Come on, you know you’re going to be talking shop at happy hour anyway.

Below is a round up of this week’s microfinance news. We thank our colleagues for the wonderful work they do in advancing our knowledge of best practices and innovations, as well as challenging us all to remain true to our social mission.

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Savings Overtakes Loans in the Philippines
July 16, 2013 | Center for Financial Inclusion
By CFI staff (@cfi_accion)

Excerpted from CFI

The total savings portfolio of the Philippine microfinance industry is greater than its total loan portfolio for the first time. News of the achievement came in an announcement last week from Amando M. Tetangco, Governor of the country’s central bank at the launch of the 11th Citi Microentrepreneurship Awards. During the first quarter of this year, the total savings of the country’s microfinance clients reached P8.2 billion (US$ 189 million), while their total loans were P8 billion (US$ 184 million). This is a dramatic surge in savings compared to the end of 2012, when industry totals were P6.4 billion in savings, and P8.4 billion in loans. These numbers suggest that as clients take out and repay loans, they’re able to sustain savings levels.

Read more — and come to the 2013 Partnerships against Poverty in the Philippines to find out what their microfinance sector is doing so right! (October 9 – 11, 2013)

The Gateway Guide: Mid-Year Review 2013
July 16, 2013 | The Microfinance Gateway


We’re delighted to share—if you haven’t seen this article on the Gateway already—the results of their 2013 mid-year review of the publications on the Gateway. Our most recent report, Vulnerability, is currently the fifth most popular publication on the Gateway!

You can read the report or watch videos of expert interviews conducted in preparation of the report here.

Also topping the chart are Joanna Ledgerwoods’ The New Microfinance Handbook: A Financial Market System Perspective that came out this February; The Demand for Microinsurance: A Literature Review by the Microinsurance Innovation Facility; and Promoting Women’s Financial Inclusion: A Toolkit from DFID and GIZ.

Read more.

Roadmap to Financial Inclusion Webinar
July 16 2013 | SEEP Network

Summary provided by the SEEP Network

The Roadmap to Financial Inclusion [was] developed through a consultative process of more than 50 experts in financial services, [and] is an action oriented blueprint for advancing financial inclusion in 5 key areas: Financial Capability, Addressing Customer Needs, Technology-Enabled Business Models, Credit Reporting, and Client Protection.

Read more or download the report directly.

Microcredit Interest Rates and their Determinants: 2004 – 2011
June 2013 | Microfinance Gateway
By R. Rosenberg, S. Gaul, W. Ford, & O. Tomilova; published by CGAP, Kreditanstalt fur Wiederaufbau, and MIX

Summary provided by the Microfinance Gateway

This paper analyzes data from the Microfinance Information Exchange to understand the relative levels of interest rates and the costs and profits that drive those interest rates. The paper takes into consideration 6,043 observations for 2004 – 2011, each covering 48 variables. It analyzes the level and trend of interest rates, cost of funds, loan loss expenses, operating expenses, loan sizes, and profits.

Read more or download the report summary directly.

cropped-cropped-quiltmaker-e1338574812859-copy.jpgCredit Market Saturation: Anatomy of a Recent Debate
July 11, 2013 | Microfinance Gateway
By Shweta S. Banerjee (@banerjeeshweta)

Excerpted from CGAP

…Based on household level data, as well as interviews with MFIs and banks, Isabelle Guerin’s post “Loan defaults versus over-indebtedness in rural Tamil Nadu” argues that defaulting on loan repayment does not necessarily mean that the client is over-indebted. The author’s research spans a period of ten years, and revisits villages and households. Default can be “strategic,” where a client does not repay because she chooses not to, or cannot repay because of a liquidity crunch. She further argues that payment of loans does not indicate that there is no over-indebtedness, because her data show that MFI loans account for less than 20% of the household debt portfolio. Clients are borrowing from informal sources (often flexible and readily available), as well as SHGs, and consumer credit companies. She does not argue that there is either a repayment problem or an over-indebtedness issue in the market overall.

Read more.