Forbes: The World’s Top 50 Microfinance Institutions

Whole Article available at FORBES

Instead of merely writing a check (then writing it off), why not make a tidy profit from a short-term, high-interest loan, most for under $200, so that a Mexican seamstress may buy a new sewing machine? Or so a Moroccan farmer can buy chickens so he may sell more eggs? Billionaires, global leaders and Nobel Prize recipients are hailing these direct loans to uncollateralized would-be entrepreneurs as a way to lift them out of poverty while creating self-sustaining businesses.
That promise has had a magnetic effect on private capital sources. Microfinance funding from private investors more than tripled to $2 billion in 2006. The field has attracted sterling banks and fund managers, including Citigroup , blue-chip venture capitalists like Sequoia Capital, tycoons like eBay founder Pierre Omidyar and Oscar-winning screen stars such as Robert Duvall–they’ve all joined the chase for returns in microfinance. Today, there are upward of 12,000 microfinance institutions issuing loans.
To help investors parse them, Forbes compiled its first-ever list of the Top Microfinance Institutions. We scoured 2006 data from the Microfinance Information Exchange, as well as analysis from ratings firms Micro-Credit Ratings International Limited and MicroRate, to rank the top 50 microfinance institutions (from a field of 641 reporting microfinance providers) by examining six key variables: gross loan portfolio, operating expense, operating expenses divided by the average number of active borrowers as a percentage of gross national income per capita, the outstanding balance of loans overdue by more than 30 days as a percent of gross loan portfolio, return on assets and return on equity. Each microfinance institution earned scores in four equally weighted categories–scale, efficiency, portfolio risk and profitability. Rankings were then based on the combined average score of those four categories.
To earn a spot on our ranking, the institution must have had audited financial statements for 2006 or submitted these for 2005, with the intention of providing audited 2006 results when available. Note that our rankings attempt to measure financial performance, not the social benefits of any microfinance institution.
Even the least credit-worthy Americans might gasp at the high rates of interest to which recipients of microfinance loans are subjected–as much as 85% isn’t unusual. But veteran microfinance experts are quick to remind scoffers about the typical alternatives–a village moneylender who might charge interest rates three or more times as high.
As is the case for any “hot” investment vehicle, investors should exercise prudence when jumping into the arena. Fly-by-nights aren’t uncommon in this new market. Supporting the wrong microfinance outfit may fail to reduce poverty or produce financial returns. Check out the essay by Morgan Stanleyexecutive Ian Callaghan on the perils of hunting for microfinance investments.
Our microfinance package also includes fresh commentary from Elizabeth Littlefield, a senior World Bank official, who discusses public vs. private funds flowing to this trendy niche. Michael Chu, a veteran private-equity investor in microfinance and Harvard Business School professor, argues why lending to the poor shouldn’t involve self-sacrifice. And legendary actor Robert Duvalland his wife Luciana Pedraza give an exclusive interview to the Forbes Video Network on their work on behalf of microfinance in Latin America.

Top List of Economically Free Countries of 2013

beckeThe United States came in at number 12. The U.S. was ranked number 6 when President Barack Obama took office in 2009.

Slipping: U.S. Fails to Crack Top 10 List of Economically Free Countries

The economic freedom index, which is jointly published by the Wall Street Journal and the Heritage Foundation, ranks the top 10 countries based on the average of 10 separate measurements, including government spending, fiscal freedom, trade freedom and freedom from corruption.

America’s spot on the 20th annual index is an “unfortunate but foreseeable slide,” said Heritage President and former U.S. Senator Jim DeMint.

“It should stun everyone,” he said, noting that the U.S. has even managed to fall behind Estonia on the index.

America’s place on the index has declined steadily for the past seven years, resulting in its status as “mostly free.” The decline is due mostly to poor showings in “fiscal freedom, business freedom and property rights,” according to the index.

“Fortunately despair will never be part of what we do here at the Heritage Foundation,” DeMint said. “We’re continuing to work on those factors, those inputs, that change the total output of economic growth.”

Hong Kong, Singapore, Australia, Switzerland, New Zealand and Canada, on the other hand, all rank “free.”

Slipping: U.S. Fails to Crack Top 10 List of Economically Free Countries

America’s fall to 12th place comes even as economies in the Asia-Pacific region report slight improvements.

Lastly, the “communist nations North Korea and Cuba brought up the rear of the index. Several war-torn countries, such as Syria and Afghanistan, were not ranked,” the Washington Examinerreported.

Top Ten Countries with which the U.S. Trades

For the month of April 2013

                                                  Year To Date
                                    Total in         Total in
                                    Billions         Billions
 Country Name                       of U.S. $        of U.S. $

 Canada                                         54.75           208.98
 Mexico                                         44.24           164.53
 China                                           42.09           167.43
 Japan                                                  17.04            67.11
 Germany                                       13.62            51.55
 Korea, South                                  8.79            34.23
 United Kingdom                              7.81            32.58
 France                                          6.75            24.20
 Switzerland                                   6.32            19.55
 India                                            5.73            20.56

source: http://www.census.gov/foreign-trade/top/dst/current/balance.html