Nigeria: Acumen Fund Invests in Paga to Scale Money Transfer Service across Nigeria

Lagos, July 2, 2012 – Paga, Nigeria’s leading money transfer service launched in February 2011, today announced it has secured new investments from Adlevo Capital, Omidyar Network, Acumen Fund, Capricorn Investment Group, and current investors Goodwell West Africa Microfinance Development Company.

Paga’s mission is to deliver innovative and universal access to financial services for all Nigerians. The company plays a critical role in enabling a cashless Nigeria and delivering access to finance to the over 80% of Nigerians that are un-banked or under-banked.  The company uses a multi-stakeholder approach. Paga is available on all mobile networks and is delivered to customers in collaboration with strong local banks (including microfinance institutions), retailers and various other private and public sector organisations.

Paga enables any person with a mobile phone or Internet access to send cash to anyone in Nigeria, buy or send airtime credit, pay bills, pay both online and physical retail stores (without cash notes or a debit card), and perform a variety of other transactions. Individuals can also perform these transactions in their communities by visiting any agent in Paga’s growing network, comprising of more than 850 agents currently located in 19 cities.

Commenting on the purpose of the investment, Paga’s founder & CEO, Tayo Oviosu said “The business opportunity for Paga is huge, and it follows that the capital requirement to achieve our mission is also significant. A key requirement for success in our industry is having investors who share our vision and have the financial fortitude for such an undertaking. To date, we have been funded by individual investors and Goodwell. We are humbled by the interest we continue to receive from both local and international institutional investors. This investment will enable Paga to scale our operations across Nigeria and allow us to build upon our front-runner position. We have carefully chosen our investors for their track record and the immense value they will bring towards accomplishing our mission.”

Speaking on the opportunity presented by Paga, Yemi Lalude, managing partner at Adlevo Capital, said “Nigeria is Africa’s largest consumer market and a key requirement for commerce to grow is efficient payment systems across all spectrums of society. What we like about Paga is their holistic approach to servicing merchants by providing a secure and simple solution for both banked and un-banked users to pay for goods and services. We are impressed with the calibre and accomplishments of the Paga team and proud to have led this financing round.”

Arjuna Costa, director of investments at Omidyar Network, added, “Omidyar Network is very pleased to invest in Paga. The company’s innovative mobile solutions for commerce combined with its potential to enable financial inclusion broadly could be key factors in driving large scale social impact. By replacing cash as the primary method of payment, Paga enables real-time transactions that are more accessible, transparent and inclusive. We believe Paga has the potential to rapidly scale and improve the lives of millions across Nigeria and the region.”

Speaking further on Paga’s social impact, Jacqueline Novogratz, founder and CEO of Acumen Fund, said “We think Paga’s innovative offerings will go a long way in bringing new economic opportunities to people that have been underserved by traditional financial services.” With more than half of Nigerians living on less than $1 a day, it is critical to find ways to deliver low cost financial services to the un-banked and under-banked. Godfrey Mwindaare, the director of Acumen Fund’s West Africa office, added “The Paga team is already working to deliver on its plans for low cost savings products, micro-insurance, and other financial services through its agent network and in partnership with strong local banks. We look forward to working with Paga and the investor consortium that Paga has attracted to help the company achieve its goal of bringing financial access to 40 million Nigerians by 2015.”

Speaking on Paga’s success to date, early investor, ‘Tokunboh Ishmael, managing director of Alitheia Capital, co-manager of Goodwell West Africa Microfinance Development Company said “As the first institutional investor in Paga, Goodwell has always believed in the opportunity of a platform like Paga to foster financial inclusion in Nigeria. From the onset, Paga has continually exceeded expectations and this strengthens our confidence in Paga’s ability to achieve its goals. Paga’s success thus far has led to the quality of investors that are now joining us on this journey for the long-term.”

Elaborating on the investment, Dipender Saluja, managing director of Capricorn Investment Group, said “Our belief in the power of innovation to catalyze economic and social advancement drew us to Paga. Paga’s platform offers consumers a secure way to process financial transactions. Millions of Nigerian consumers who rely on cash can now use their mobile devices, the internet, or Paga agents to make payments and purchase goods. Paga has tremendous potential and we look forward to working with the team to build a great company.”

Speaking further on innovation, Oviosu said “Innovation is at the core of Paga. Paga is a home-grown solution that overcomes a core challenge in Nigeria – how to transfer money or pay for anything without physically carrying cash. Imagine a day you walk into your local provision store, to buy provisions for the weekend and you don’t need to carry cash, or even your wallet! Simply all you have is money in Paga. The storeowner processes your transaction via Paga and now has his money in the bank. The opportunities abound and this is why investors have put their weight behind our team to help us achieve our mission.”

Since launching to the general public, Paga has processed over 276,000 transactions worth more than N2.6 billion. On June 4 2012, Paga achieved a major milestone and crossed 100,000 unique users. Today Paga has over 125,000 users.

Customers can use Paga directly from their mobile phones or Internet-enabled devices by visiting www.mypaga.com or a Paga agent. Recipients of money sent can simply go to any Paga agent to collect the funds and do not need to be Paga customers to do so.

Paga was advised on this investment round by Norton Rose LLP (Partner – Bayo Odubeko) and the investors were advised by Bowman Gilfillan (Partner – Lele Modise).

 

About Paga

Paga was founded in April 2009 with a mission to deliver innovative and universal access to financial services in Africa. Paga received its provisional licence to operate from the Central Bank of Nigeria in November 2010 and full license November 2011.  Paga is underpinned by a secure payments platform that is built with the flexibility to operate in any environment and on the most basic mobile phone and Internet enabled device. To maximise the network effects critical for the long-term success, Paga has taken a multi-stakeholder approach and works with strong local banks and microfinance institutions and on all mobile networks. Customers can use Paga via multiple channels – SMS, Online, Java application on a device, and our agent network. The company has gone to great lengths to balance simplicity and security of its platform. To learn more visit www.mypaga.com

Contact: Ayisola Iroche – media@pagatech.com – 0700-000-7242

About Acumen Fund

Acumen Fund is working to create a world beyond poverty by investing in social enterprises, emerging leaders and breakthrough ideas. We invest patient capital in business models that deliver critical goods and services to the world’s poor, improving the lives of millions. Since 2001, Acumen Fund has globally invested more than $75 million in 69 companies. We are also working to build a global community of emerging leaders that believe in creating a more inclusive world through the tools of both business and philanthropy. Please visit www.acumenfund.org for more information.

Contact: media@acumenfund.org

SOURCE: Acumen Fund Press Release

MIX Promotes Financial Inclusion and Transparency With New Premium Solutions

From Marketwire

Today, Microfinance Information Exchange (MIX) announced the launch of MIX Silver — a value-added, fee-based service for business users that furthers MIX’s mission of promoting financial inclusion and fostering transparency in the microfinance sector. Developed in response to intensive market research, these new solutions address users’ need for timely data and deeper microfinance insight. In a rapidly changing microfinance ecosystem, practitioners will benefit from MIX Silver’s larger data set, more expansive fact base, and advanced analytical tools designed to meet business needs for timely, informed insight into MFIs and their markets.

MIX Silver will save subscribers time and resources through customizable analytical tools and reporting features, deeper and broader data access, and enhanced market intelligence on countries of critical importance in the microfinance space. The Silver offering includes all of the benefits of MIX Basic services, while adding the ability to create a personalized dashboard to track real-time movements in MFI positions and microfinance markets; build and track MFI portfolios using powerful tools for drill-down analysis; access enhanced benchmarking and aggregation tools; and utilize all interim and annual data for more than 2,000 MFIs in the MIX database.

Blaine Stephens, MIX Chief Operating Officer and EVP, MIX Solutions, notes, “In less than a decade, MIX and its partners have built the fact base for microfinance that has moved the industry from case studies to broad, timely market information. MIX Silver moves us from information to action, giving users the tools and insight necessary to monitor market developments and MFI performance where it matters to their business.”

In addition to launching MIX Silver, MIX has upgraded its MIX Market website ( www.mixmarket.org ) to improve user experience and increase access to MIX’s publicly available microfinance market data. Later this year, MIX will launch MIX Gold to enable enterprise-wide access to broader market intelligence, advanced benchmarking and aggregation tools, expert market insight and commentary, and MFI portfolio monitoring services. Omidyar Network, a philanthropic investor committed to financial inclusion, is providing funding for the launch of these services.

“MIX is an important partner to Omidyar Network in our efforts to bring access to financial services to the world’s poor,” says Stephanie Cohn Rupp, Principal of Investments at Omidyar Network. “With its premium services, MIX is now offering more in-depth analysis, expanded data, and reporting that provide greater transparency and support to the microfinance ecosystem.”

Marten Leijon, CEO of MIX, points out: “As we approach MIX’s 10th anniversary, we are excited to provide a new service that harnesses the power of MIX’s technology and global network to drive fast, accurate business decision-making for all microfinance leaders. This is why we exist: to continue to strengthen capabilities and bolster the microfinance sector.”

To learn more about MIX Premium Solutions, visit http://microfinance-business-solution.mixmarket.org or email info@themix.org.

About MIX:

MIX is the premier source for objective, qualified and relevant microfinance performance data and analysis. Committed to strengthening financial inclusion and the microfinance sector by promoting transparency, MIX provides performance information on microfinance institutions (MFIs), funders, networks and service providers dedicated to serving the financial sector needs for low-income clients.

MIX fulfills its mission through a variety of platforms. On MIX Market ( www.mixmarket.org ), we provide instant access to financial and social performance information covering approximately 2,000 MFIs around the world. Our publications, MicroBanking Bulletin and MIX Microfinance World, feature thorough and timely analysis based on qualified data and research.

Incorporated in 2002, MIX is a non-profit organization headquartered in Washington, DC with regional offices in Azerbaijan, India, Morocco, and Peru. Our public information services are strengthened through our collaboration with the following global partners: Bill & Melinda Gates Foundation, CGAP, Omidyar Network, The MasterCard Foundation, IFAD, Michael & Susan Dell Foundation, Citi Foundation, Ford Foundation, and Deutsche Bank. For more information about MIX, please visit www.themix.org .

About Omidyar Network:

Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. To date, Omidyar Network has committed more than $430 million to for-profit companies and non-profit organizations that foster economic advancement and encourage individual participation across multiple investment areas, including microfinance, property rights, consumer internet, mobile and government transparency. To learn more about Omidyar Network, please visit www.omidyar.com .

Omidyar Network Expands European Presence with Opening of London Office

Omidyar Network Press release

September 15, 2011, LONDON and REDWOOD CITY, Calif. – Omidyar Network announced today the opening of a global office in the Shoreditch area of London. The office will serve as the philanthropic investment firm’s headquarters for its work in Europe, as well as serve as the global hub for its Government Transparency initiative. Stephen King, investment partner at Omidyar Network, will lead the London office and the global Government Transparency practice. King made the announcement at “The Power of Information: New Technologies for Philanthropy and Development” conference in London.

Omidyar Network was created by eBay founder Pierre Omidyar and his wife Pam in 2004. Omidyar Network makes impact investments and grants to the most innovative companies and organizations across five initiative areas. Through its Government Transparency initiative, Omidyar Network invests in organizations that use technology and media platforms to provide access to information and tools necessary for citizens to participate in the governing process and hold governments to account. Over the last two years, the firm has invested over $40M in transparency efforts across the globe, including organizations such as mySociety in the United Kingdom, Ushahidi in Kenya, Janaagraha in India and the Sunlight Foundation in the United States.

King also announced Omidyar Network will begin to expand the geographic focus of its Government Transparency practice to include: Poland, Turkey and Ukraine in Europe; Brazil and Mexico in Latin America; Egypt in the Middle East; and Indonesia and the Philippines in Southeast Asia. The initiative will continue to focus efforts in the United States, India, Nigeria, Kenya and South Africa in sub-Saharan Africa and the United Kingdom.

“Today marks an important milestone for Omidyar Network. The opening of our London office broadens our reach in helping create opportunity for individuals through investments in market-based solutions,” said King. “A greater concentration of efforts in this region of the world will enable us to work more closely with portfolio partners, create new collaborations and explore new investment opportunities. The vibrancy and promise of the Shoreditch area, we feel, are particularly appropriate for Omidyar Network. Our belief in the innovative use of technology to help organizations scale their business models and solutions is reflected in the creative, entrepreneurial spirit of the area.”

Joining King in London is Vineet Bewtra, who will serve as a director, investments. Bewtra has a rich investment background, including stints as an investment manager at The Children’s Investment Fund Foundation and managing director at Dresdner Kleinwort. He also worked at Lehman Brothers, Deutsche Bank and Chemical Investment Bank. Additional staffing appointments will be made in the near future.

King also announced support of six new organizations focused on Government Transparency with grants up to $3M [See release: Omidyar Network Supports Technology-Centered Organizations Seeking to Empower Citizens Across Six Countries].

About Omidyar Network
Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. To date, Omidyar Network has committed nearly $450 million to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual participation across multiple investment areas, including microfinance, entrepreneurship, property rights, transparency and accountability, consumer Internet and mobile. To learn more about Omidyar Network, please visit www.omidyar.com.

Media Contact
Greg Pershall
Omidyar Network
gpershall@omidyar.com
+1-360-607-8901

Omidyar Network Commits $1.5 Million to African Leadership Academy to Develop a New Generation of Entrepreneurs in Africa

Omidyar Network Press Release

May 12, 2011, REDWOOD CITY, Calif. — Omidyar Network announced today it has committed $1.5 million over two years to African Leadership Academy (ALA), an institution dedicated to cultivating a new generation of African entrepreneurs. ALA will use the funding to strengthen its ability to identify promising young students, build its entrepreneur development program, and provide life-long support for a network of more than 6,000 leaders across Africa.

“Omidyar Network believes that entrepreneurship is a driving force for creating positive social impact,” said Arjuna Costa, Director of Investments at Omidyar Network. “By supporting Africans with great ambition, talent and leadership potential, ALA is enabling future entrepreneurs to pursue their ideas and ultimately accelerate social chance from within the continent.”

ALA addresses critical gaps in the support system for Africa’s future leaders. The academy provides a superior high school curriculum as well as access to opportunities in higher education, both of which are often unavailable to capable students. ALA graduates become part of a lifelong network that can be tapped for knowledge, ideas, connections and capital. ALA also fosters a commitment amongst its students to return to the continent and leverage their abilities to support the future of Africa.

ALA has attracted considerable talent since its creation in 2004; its campus represents 48 of Africa’s 53 countries. In June 2010, ALA graduated its inaugural class of 93 students, who received over $9.5 million in scholarship and were accepted into the world’s top universities, including Harvard, Stanford, and Oxford. Since 2008, it has accepted 400 students from a pool of over 9,000 applicants.

“Omidyar Network is a valuable partner to ALA; they understand the significance of nurturing an ecosystem for entrepreneurship in Africa similar to that of Silicon Valley,” said Fred Swaniker, founder of ALA. “With their support, ALA can grow a new generation of leaders that will shape the future of Africa.”

About African Leadership Academy
African Leadership Academy (ALA) seeks to transform Africa by developing a powerful network of leaders that can achieve extraordinary social impact. Each year, ALA brings together the most promising young leaders from all 54 African nations for its pre-university program in South Africa. Students complete a unique curriculum focused on leadership, entrepreneurship and African studies. ALA cultivates these leaders in university and beyond, providing ongoing leadership training and connecting them to people and capital that can catalyze large-scale change. For more information, visit, www.africanleadershipacademy.org.

About Omidyar Network
Omidyar Network is a philanthropic investment firm dedicated to harnessing the power of markets to create opportunity for people to improve their lives. Established in 2004 by eBay founder Pierre Omidyar and his wife Pam, the organization invests in and helps scale innovative organizations to catalyze economic and social change. To date, Omidyar Network has committed more than $400 million to for-profit companies and nonprofit organizations that foster economic advancement and encourage individual participation across multiple investment areas, including microfinance, property rights, consumer internet, mobile and government transparency. To learn more about Omidyar Network, visit www.omidyar.com.

MIX and IRIS work together to bring integrated reporting to the mainstream

From Microfinance Information Exchange -

The Microfinance Information Exchange (MIX) has recently launched a data-sharing feature on MIX Market (www.mixmarket.org) that allows users to subscribe to RSS feeds for automatic data updates. This project was made possible by a grant awarded by the Rockefeller Foundation which supports MIX’s mission to increase the transparency and consistency of reporting in the microfinance industry with the development of a structured data feed. This feature enables users to access data immediately after updates are posted to MIX Market and to read data directly from the feed.

The data updates appear in eXtensible Business Reporting Language (XBRL), a common language for exchanging financial data that is used by the US SEC and other regulators and exchanges for electronic submissions of financial statements. The new RSS data feeds also links users directly to the appropriate profiles on the MIX Market site.

“We are excited about offering this new channel to those interested in tracking the performance of microfinance institutions. The feed lets users of the MIX Market site receive instant updates in a broadly-recognized format, and allows us to integrate data from microfinance institutions into a broader database of impact investments.” Scott Gaul, Director of Analysis and Product Development Manager at MIX.

Using XBRL, the MIX Market RSS feed can seamlessly transfer information from more than 1,800 MFIs to the Impact Reporting and Investment Standards (IRIS) initiative of the Global Impact Investing Network (GIIN). The data is added to the IRIS impact investing data repository, a secure hub of financial, social, and environmental performance data from organizations receiving impact investment capital. Impact investments constitute an emerging asset class, comprised of investments intended to create social or environmental value alongside financial profits.

”As the world’s largest provider of microfinance performance data, MIX Market brings crucial transparency and data analysis to the microfinance industry, and the IRIS initiative aims to do the same for the broader impact investing industry,” said Sarah Gelfand, Director of IRIS at the GIIN. “We are thrilled to work with the MIX to produce reports that integrate social and environmental results with financial returns. This important information will enable investors to support businesses that most effectively develop solutions to the world’s most pressing problems.”

Later this year, the MIX Market data will be analyzed, along with performance data submitted to the IRIS data repository by other mission-driven businesses across several sectors, to create the first cross-sector performance report for the impact investing industry. Together, MIX and IRIS are creating standard reporting frameworks that enable the integration of social and environmental reporting into mainstream markets.

About MIX

The Microfinance Information Exchange (MIX) is the leading provider of business information and data services for the microfinance industry. Dedicated to strengthening the microfinance sector by promoting transparency, MIX provides detailed performance and financial information on microfinance institutions, investors, networks and service providers associated with the industry. MIX does this through a variety of publicly available platforms, including MIX Market (www.mixmarket.org), the MicroBanking Bulletin, and MIX Microfinance World.

MIX is a non-profit company founded by CGAP (the Consultative Group to Assist the Poor) and works in collaboration with by CGAP, the Citi Foundation, Deutsche Bank Americas Foundation, Omidyar Network, MasterCard Foundation, IFAD (International Fund for Agricultural Development), Bill & Melinda Gates Foundation, Michael & Susan Dell Foundation, the Ford Foundation and others. MIX is a private corporation. Visit www.themix.org for more information.

About GIIN

The Global Impact Investing Network (GIIN) is a not-for-profit organization dedicated to increasing the scale and effectiveness of impact investing. The GIIN builds critical infrastructure and supports activities, education, and research that help accelerate the development of a coherent impact investing industry. This work is informed by the GIIN Investors’ Council, a diverse membership group comprised of leading impact investors. To serve the needs of the greater impact investing community, the GIIN also oversees the development of IRIS, a common vocabulary and framework for measuring and reporting the social and environmental performance of impact investments, and recently launched ImpactBase, a database of impact investment funds, designed to reduce search and transaction costs across the impact investing industry. For more information, please visit www.thegiin.org.

Microfinance Bank in Pakistan Receives CGAP’s Silver Category Award

ISLAMABAD, Dec 15 (Associated Press of Pakistan):

The First MicroFinanceBank Ltd. Pakistan (FMFB-P), an institution of the Aga Khan Agency for Microfinance, was awarded a certificate of recognition in the silver category for reporting on social indicators to the Microfinance Information Exchange (MIX) by the World Bank affiliate, CGAP (Consultative Group for Assisting the Poor), in the year 2010.This is the second consecutive Social Performance Reporting Award won by FMFB-P.The award was initially launched in 2009 by CGAP together with its partners the Michael & Susan Dell Foundation, the Ford Foundation, and the Social Performance Task Force (SPTF), says a statement issued by the bank here today.

The award is designed to promote greater transparency in social performance reporting of Microfinance Institutions (MFIs) and recognises the efforts of MFIs in establishing a strong social performance outlook within their organisation.

Around 350 MFIs submitted reports on their social performance to the MIX this year for the Awards, easily surpassing the 200 that were received in 2009.

“This is a tremendous response to the call for greater transparency,” said Xavier Reille, Lead Microfinance Specialist at CGAP. “We have seen nearly a doubling in the number of applications to the Awards in a single year, and it shows the sincerity of MFIs in their mission of providing financial services to the poorest people, as well as to their own financial bottom lines.”

“FMFB has been working over the last two years to establish its own unique set of poverty-measurement indicators and to mainstream its efforts to measure poverty levels of clients throughout the country,” said Hussain Tejany, President /CEO of FMFB.
He added that FMFB-P had been reporting on a set of social performance monitoring indicators that had been developed through the Social Performance Task Force in cooperation with the industry leaders. Important indicators included the degree to which

MFIs were measuring the poverty level of their clients and the poverty-measurement tools being used.

The Social Performance Reporting Awards provide a yardstick for those wanting to assess an MFI’s commitment to showing progress in helping their clients, supporting their staff, and protecting the environment.

The MFIs across the world are showing a strong commitment to transparency and accountability in their efforts to reduce poverty, with a growing number reporting on the social benefits of their activities to their investors and to the public.

The Social Performance Reporting Awards provide a yardstick for those wanting to assess an MFI’s commitment to showing progress in helping their clients, supporting their staff, and protecting the environment.

The awards reward openness and accountability in reporting, not the actual performance of MFIs on these measures. More than 200 MFIs submitted reports on their social performance in 2009 to MIX and this number increased significantly in the second round of awards reaching 350 applications.

To qualify, MFIs provide reports on a set of social performance monitoring indicators that have been developed and refined through the Social Performance Task Force in cooperation with industry leaders. One of the most important indicators is the degree to which MFIs are measuring the poverty level of their clients and which poverty-measurement tools they are using.

The awards feature three levels of recognition:
GOLD AWARD: awarded to MFIs that complete the report, provide data on poverty measurement, and have a social rating that includes auditing of the poverty tool used by the MFI.

SILVER AWARD: awarded to MFIs that complete the report, and also provide data on poverty measurement.

CERTIFICATE: awarded to MFIs that complete the Social Performance Standards Report.In 2010, 19 MFIs have received Gold Awards, 32 won Silver, and 122 were recognized with certificates. Additionally, five networks received awards for the strong social reporting of their affiliates.

The Microfinance Information Exchange, Inc. (MIX) is the leading business information provider dedicated to strengthening the microfinance sector. MIX is a non profit organization incorporated in June 2002, with headquarters in Washington, DC, and regional offices in Peru, Morocco, and India.  MIX was founded by CGAP (Consultative Group to Assist the Poor), and is sponsored by Citi Foundation, Deutsche Bank Americas Foundation, IFAD, Bill & Melinda Gates Foundation, and Omidyar Network.

The organization’s core focus is to provide objective data and analysis on microfinance providers. In doing so, MIX promotes financial transparency in the industry and helps build the information infrastructure in developing countries.

This addresses a key challenge for the microfinance industry:
the lack of reliable, comparable and publicly available information on the financial strength and performance of microfinance institutions as well as their social impact. MIX provides detailed financial and social performance information from microfinance institutions (MFIs), as well as business information from market facilitators and leading donor organizations and investors in microfinance. This is done through the online information exchange MIX Market (www.mixmarket.org) and through a variety of publications including the MicroBanking Bulletin and reports and analysis on regional and country level microfinance sectors.

Omidyar Network and Hivos Advance Government Transparency Efforts in Africa With New Initiative

New Microfinance Opportunities for U.S. Entrepreneurs

By Sunita, Sohrabji, Indiawest.com –

SAN FRANCISCO, Calif. – Microfinance lending is branching out from the developing world and targeting American small business entrepreneurs, noted several panelists at the Microfinance USA conference here, which began May 20.

The two-day conference was organized by the San Jose, Calif.-based Opportunity Fund, which provides microfinance loans ranging from $1,000 to $100,000 to small and medium-sized enterprises in the San Francisco Bay Area. Opportunity Fund, like similar microfinance lending institutions throughout the U.S., makes loans to people who have little to no credit history, no collateral, and who have been turned down by banks for traditional business loans. The organization says it has directed more than $150 million to 10,000 lower-income households in the region.

Small businesses in the U.S. represent about 87 percent of all businesses in the U.S., and create about one million new jobs each year.

The microfinance industry — pioneered by Grameen Bank founder Muhammad Yunus who lent small amounts of money to women in Bangladesh to start micro-enterprises such as raising chickens or making baskets — now boasts global assets of more than $60 billion, especially as private firms and capital have entered the industry.

There is huge scope for worldwide expansion with a potential market of three billion people who could benefit from a microfinance loan, noted Stephanie Cohn, manager of investments at Omidyar Network, a philanthropic investment firm established by eBay founder Pierre Omidyar and his wife Pam.

Omidyar Network recently opened an office in Mumbai, where it intends to invest $45 million in Indian social enterprises.

California’s first lady Maria Shriver and Kiva president Premal Shah opened the conference May 20 at the Metreon Center downtown.

The San Francisco-based Kiva, founded in 2005, has loaned more than $75 million to entrepreneurs in 44 countries through its Web site, where lenders can make loans as small as $25 to borrowers in the developing world. The organization boasts a 99 percent payback rate, which the lender can then use to fund other individuals.

Though the site is structured so that small investors seem to be investing directly in an individual, Kiva consolidates the loans and works with field partners in various countries who actually administer the loan. The organization was recently brought to task in a New York Times story for the high rates of interest charged by some of its lending partners.

Kiva has not yet received approval to offer its loans in India.

The organization began its domestic lending program last June, after Shriver visited the organization’s San Francisco office in March 2008, and asked why the international model could not be replicated for U.S. innovators. Kiva to date has funded 60 entrepreneurs in the Bay Area with $350,000 in loans.

Shriver’s own microfinance lending venture WE Invest, which works with women entrepreneurs in California to get them loans, along with training and mentoring, recently partnered with Kiva, so that lenders could fund WE Invest’s borrowers through the Kiva Web site.

“At no time in this state’s history do people need these loans more than right now,” said Shriver, adding, “We are at a moment when people are realizing the government cannot support them.”

With the current economic climate throughout the U.S., with record numbers of people unemployed, more people are leaving corporate America to try and start ventures on their own, said Shriver, adding that social factors, such as raising a child or caring for an elderly parent are also pushing people out of traditional employment and into entrepreneurship.

“My best advice to any entrepreneur is fail fast, fail forward,” said Shah, to laughs and applause from the audience of more than 1,000 people.

“For a long time with Kiva, it was crickets and tumbleweed. No one was coming to our site. It was very depressing and I used to think, ‘I quit my job for this,’” he said, to more laughter.

Later that afternoon, speakers at the “Fair Price for Credit” panel engaged in a lively debate about the interest rates charged by microfinance lending institutions throughout the developing world. Globally, interest rates average about 37 percent per loan, but can be as high as 87 percent.

“What differentiates the microfinance institution from a loan shark?” asked moderator Jonathan Lewis, founder of MicroCredit Enterprises, querying further whether the microfinance model was still an anti-poverty measure or a tool for investors.

Yunus, speaking four days later at the Commonwealth Club in San Francisco, said he was wary of private investors getting involved in microfinance for profit. “We created microfinance to get rid of the loan sharks,” he said, noting that many MFIs charged interest rates on par with predatory lenders.

In an earlier story, Shah of Kiva justified the high interest rates of microfinance loans, noting the high costs associated with administering many loans for small amounts.

At another May 20 afternoon panel, Deepak Kamra, general partner at Canaan Partners, said his company was finalizing a microfinance venture in India, but could not yet disclose details of the deal.