UPDATE: Movimiento no pago

Kiva is displaying the following information about loans to MFIs in Nicaragua:

Update from Kiva Staff on July 19, 2010: In order to help you better understand the potential risks of lending to entrepreneurs in Nicaragua, Kiva continues to provide information on the “No Pago” movement (a movement for non-repayment of loans).

The momentum behind the No Pago movement appears to have largely dissipated, as a result of the National Assembly's passage of a law in April 2010. This new law allows delinquent borrowers (as of June 2009) to re-negotiate loans with more favorable interest and terms. Borrowers who were part of the No Pago movement were required to approach MFIs to re-negotiate their loans by May 12th of this year. While many borrowers did approach MFIs to re-negotiate their loans, it still only accounted for a small percentage of the members of the No Pago movement.

For Kiva lenders who previously lent to Nicaraguan borrowers:

• if your loan had default coverage, then even if your loan was affected, the MFI will cover your loan for the full amount.
• if your loan did not have default coverage by the MFI: If the borrower you lent to did not approach their MFI before May 12th, their loan cannot be re-negotiated under the terms of the No Pago movement resolution. Kiva is working closely with its Field Partners in Nicaragua to see if any Kiva clients have re-negotiated their loan under this law and will message to lenders accordingly.

For Kiva lenders considering making new loans in Nicaragua: it seems that as a result of the passage of this law and since the term for re-negotiation has passed, the microfinance situation is calmer in Nicaragua that previously. Kiva will continue to update the Kiva lender community if the situation changes significantly.

Nicaragua and the Movimiento no Pago

There's been some interesting activity lately in Nicaragua, with the "Movimiento no Pago" (a non-payment movement among groups in the North of the country) protesting against microcredit loans. Things have got a lot harder in the country since the economic crisis. Kiva put out this statement:

"Recent information indicates that the situation may be improving as the President of Nicaragua has spoken out against this law and would not support its passage in its current form. The network of microfinance institutions in Nicaragua (ASOMIF) has been negotiating with the government in support of an alternative proposal. Kiva, along with 25 other funders from 9 countries, has signed onto a letter to the Nicaraguan government urging a resolution to this situation without enacting a moratorium on debt repayment. The potential passage of the debt moratorium increases the risk of lending in Nicaragua."

There's a copy of the anti-movement advert available on David Roodman's blog that gives a really good picture of exactly which microfinance organizations are operating on the ground there.

At the moment, I can't find much information on who's in Movimiento no Pago and what the extent of support for them is among ordinary people, but I'll keep looking.

book on microfinance

NGOs, IGOs, and the Network Mechanisms of Post-Conflict Global Governance in Microfinance by Anna Ohanyan

Source: Amazon.com
Product Description

Partnerships between international organizations and NGOs are central to delivering services in post-conflict settings. This book examines how such partnerships and policy networks comprising large international organizations and NGOs generate policies to heal the wounds of war-torn communities and build institutions of the post-conflict state for long-term governance. Exploring the international community’s application of microfinance in post-conflict Bosnia and Herzegovina, this book follows how these policies were subsequently transferred to and modified for Kosovo and Afghanistan. Drawing on multiple, varied cases this book offers a new framework of policy analysis in post-conflict zones, and bridges global policy studies with conflict resolution. For details, click here .

UPDATE: Loan to Salma Ally in Tanzania

"Greetings from Tanzania! Thank you for supporting Salma Ally and the
Almas group. I am happy to report she is doing extremely well. With the
loan she received, she increased stock on her business on selling
clothes. As a result, her monthly profit rose to $160! salma uses the
additional profits to cover household expenses and to expand her
business. Salma and the Almas group are very grateful for the loan and
are thankful to every one who has supported them."

UPDATE: Loan to Ngorogoro Group in Tanzania

"Greetings from Tanzania! Thank you for supporting James Manyama and the
Ngorogoro group with a loan. With the loan James received, he purchased
leather material for sofa sets covers. With the increased stock, his
monthly profit rose from $746 to about $755! James uses the profit for
house hold expenses and increases on his business by buying small items.
James and Ngorogoro group are very grateful for the loan and are
thankful to everyone who has supported them."

Macro Evidence for Micro Finance?

One of the key problems in determining the effectiveness of microfinance is this: there are many studies which show it works on the individual case level, but few which do so in aggregate...

This economist article demonstrates the point well. In other words, we know that microfinance, done properly, can improve the lives of the working poor, but can it do more than that? Can it fight poverty in a sustained way?

Kiva song

If I had $25..
http://www.youtube.com/watch?v=AXAw71PvAZ4