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

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,

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

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

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,

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

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

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