Posted on: October 1, 2020 Posted by: admin Comments: 0

Minimize Risk: Finance MSMEs

By Tarek Kamal, Managing Partner Even as excessive levels of competition erode interest rate spreads, financial institutions continue to flock to what they consider safe space, namely loans to large businesses. As spreads decline, financial institutions have to rely on higher exposures to a single business just to break even. If the spreads were the only casualty of the competition, it might still have been understandable. More disturbingly, another casualty…

Posted on: September 26, 2020 Posted by: admin Comments: 0

MSMEs: Always All In!

By Tarek Kamal, Managing Partner When an MSME reaches out to financial institutions for a loan to grow their business, the financial institution only finances a part of the project cost. Before approving the loans, financial institutions assess project proposal to ensure that the MSMEs can generate sufficient cash flow to service the debt. However, they usually seek to secure the loans further with personal guarantees and collateral. Two of…

Posted on: July 29, 2020 Posted by: admin Comments: 0

A Low Hanging Fruit: Quick Wins in Energy Efficiency

By Tarek Kamal, Managing Partner I was recently thinking about the opportunity I had taken up to participate in a walk-through energy audit of an eco-resort in Nepal almost ten years ago. A financial institution that I was dealing with was participating in a syndicated finance transaction that was going revamp the eco-resort by modernizing the facilities. My client was a small non-bank financial institution that was focusing on energy…

Posted on: April 6, 2020 Posted by: admin Comments: 0

Interest Rate Caps: A Tool for Financial Exclusion

By Tarek Kamal, Managing Partner When MSMEs are asked what they think of interest rates, it is not surprising that they find it too high. When asked whether they think that access to finance is difficult, it is not surprising that they find that it is. The problem with arriving at any conclusion based on these types of questions is that it is meaningless. Everyone would prefer that their loans…

Posted on: August 11, 2017 Posted by: admin Comments: 0

Hardcore Overdraft is like a Debt Addiction

By Tarek Kamal, Managing Partner Not many people, not even many bankers, have heard the term hardcore overdraft but it is a thing. The purpose of an overdraft account is to help the account owner to smooth out cash shortfalls and excesses. Technically, when an overdraft facility is used too often or for extended periods, the bank considers this to be hardcore debt and therefore risky and increases the interest…

Posted on: August 6, 2017 Posted by: admin Comments: 0

Could Agent Banking be the Silver Bullet for Financial Inclusion in Bangladesh?

By Tarek Kamal, Managing Partner In Bangladesh, the sixth largest country in terms of population, more than 63 million people live below the poverty line. A third of its 162.9 million people (2016) still live on less than $2 per day despite a per capita income of approximately $1,088 (2014). It is also one of the most densely populated countries in the world due to its relatively small land area.…

Posted on: August 1, 2017 Posted by: admin Comments: 0

Pump Up The MFS Volume: Mandate Interoperability Now!

By Tarek Kamal, Managing Partner Mobile Financial Services (MFS) is fairly active in Bangladesh but the cost of transactions and the level of literacy of the ultimate beneficiaries, namely the unbanked population, are major impediments to financially including them. The density of mobile service coverage across the country makes MFS a good solution for money transfer to the last mile. The success of the mobile financial services platform has been…

Posted on: April 24, 2017 Posted by: admin Comments: 0

Financing the Chors (River Islands) of Bangladesh

By Tarek Kamal, Managing Partner This is a follow up to a previous note, The Chors (River Islands) of Bangladesh: A Real Challenge for the Financial Services Sector. Making way to clients in the chars. Some chars are a little more stable than others. A few have been above water for 20-30 years. Microfinance institutions have set up small offices on some of these chars The Chors (River Islands) of Bangladesh,…

Posted on: August 10, 2016 Posted by: admin Comments: 0

The Chors (River Islands) of Bangladesh: A Real Challenge for the Financial Services Sector

By Tarek Kamal, Managing Partner To say that life is difficult for the residents of the Chors (River Islands) of Bangladesh would be an understatement of the highest magnitude. Some Chors are more vulnerable to flooding and erosion. Continuously on the move, they are a resilient lot. The picture above really drives home the issues felt by inhabitants of the Chors of Bangladesh. Using the GPS coordinates on the picture…

Posted on: September 3, 2014 Posted by: admin Comments: 0

Guaranteed! Employment for Life

By Tarek Kamal, Managing Partner When I was in business school studying venture capital management, my entrepreneurship professor, said that before going into business, I should get some experience under my belt. I was told that making some mistakes on someone else’s dime was a good idea. True as that still is, if you are going to start a business, sooner is better than later. I followed my professors’ advice.…