Friday, October 31, 2008

Fundraising Slowdown Likely Till 2009

Investors have seen all asset classes suffer during the recent market turmoil, and the long-term outlook remains highly uncertain. In order to assess the impact on institutions’ private equity programs, and their future intentions for the asset class, Preqin’s LP Survey team has undertaken a survey of current LP opinion and sentiment. 


Preqin’s LP Survey team polled 100 investors during September and October 2008, covering a representative sample of small, medium and large institutions globally. 51 institutions were from North America, 43 from Europe (of which 13 UK, 12 Scandinavia and 18 mainland Europe), and 6 were from the rest of the world. 31 were public pension plans, 20 fund of funds, 15 endowments and the remaining 34 were spread across asset managers, insurance companies, family offices, private sector pension plans, investment companies, banks and sovereign wealth funds. 


Detailed report:


Wednesday, October 15, 2008

Microfinance in India

Its almost 25 years since Microfinance taken birth in India and the concept started by Professor Mohammad Yunus (Grameen Bank) in Bangladesh. The Microfinance field has since spread with adaptation and evolution of  ideas to various countries and context.With a large portion of the world’s poor, India is likely to have a large potential demand for microfinance. For this reason, It makes sense to consider the changing face of microfinance in India, in order to shed light on comparable changes in the field all over the world. With all the excitement about the prospects of the field to contribute to poverty alleviation and the integration of the world’s poor into the rapidly evolving global market system, the Consultative Group to Assist the Poorestthe Consultative Group to Assist the Poorest (CGAP) estimates that microfinance probably reaches fewer than 5% of its potential clients. 

India is home to a growing and innovative sector microfinance.

Microcredit organization can be a burgeoning field that combines the best in economic strategy with human policy making. Microcredit programs, and other developmental economic initiatives, represent a new way of forging international relations through humanitarian and financially viable aid. It is the branch of microfinance that involves lending small amounts of money to very poor people. The borrowers, often women, use this money to start a business or improve upon an existing one. The money is often used to buy goods that the women can later resell at a profit. These small loans give women the capital they need to create sustainable businesses enabling them to support themselves and their families.

Mirocredit requires specialized financial knowledge as well as a unique combination of skills, such as knowledge of social science, local languages and customs.

I feel microcredit is a very critical part of helping communities grow and achieve sustainability. 

Micorfinance is here to stay as  it is yet to reach millions of poor .  

Photo from: World Bank

Tuesday, October 14, 2008

Is the worst over?

Markets around the world doing Bungee Jumping, there are still uncertainties in the financial markets and global economies which are unlike what most people have seen in the last decade or so, and it is extremely difficult to predict whether market conditions are heading south or northward simply because the world is very different from what it used to be 10 years ago. 

No expert is expert enough to say worst is over with the currrent crisis which is kind of one year and half old and  people slowly get used to the  bungee jumping by the markets and there will be less panic.Many experts whom i talk to and tell them that worst is over they tell me 

"if you thought worst is over think again" we have to see this week and may be there will be some clarity.

US Financial Crises -Lessons

I repeat what i wrote on September 18th and even this day it is relevent 

The current market jitters are centred on disturbances in the world's credit markets. Worries about the viability of sub-prime mortgage lending have spread around the financial system, and the central banks have been forced to pump in billions of dollars to oil the wheels of lending.

But what happened in previous financial crises, and what are the lessons for today?

There have been a growing number of financial crises in the world, according to the International Monetary Fund (IMF).

Among the key lessons of previous major financial crises are:

Globalisation has increased the frequency and spread of financial crises, but not necessarily their severity

Early intervention by central banks is more effective in limiting their spread than later moves

It is difficult to tell at the time whether a financial crisis will have broader economic consequences

Regulators often cannot keep up with the pace of financial innovation that may trigger a crisis.