According to the Global Microscope on the Microfinance Business Environment 2012, a recent report by the UK-based Economist Intelligence Unit (EIU), Peru is the top country in microfinance for the fifth consecutive year due to its strong regulatory environment.The report cites that the Peruvian government consistently strengthens the regulation and supervision of microcredit portfolios, strengthens the regulatory framework for deposit-taking, ensures the credit bureau provides reliable information to borrowers, and promotes price transparency and financial literacy. According to US-based non-profit Microfinance Information Exchange (MIX), 60 microfinance institutions (MFIs) in Peru report total assets of USD 10.6 billion, a gross loan portfolio of USD 8.8 billion with 3.6 million active borrowers and USD 6.6 billion in deposits from 3.5 million depositors as of 2011.
The report ranks Bolivia second-best. Since 2011, the Bolivian government has improved its regulatory framework for deposit-taking and strengthened its accounting practices for MFIs by instituting compliance with the International Financial Reporting Standards (IFRS). As of 2011, 24 MFIs in Bolivia report to MIX total assets of USD 3.8 billion, a gross loan portfolio of USD 3 billion with 1 million active borrowers, and USD 2.6 billion in deposits from 2 million depositors.
Pakistan ranked third partially by improving its “capacity to develop financial transactions through agents, particularly branchless banking.” As a result, Pakistan increased the number of microfinance transactions from 3.5 million to 20.6 million from March 2011 to December 2011. As of 2011, 10 MFIs in Pakistan report total assets of USD 366 million, a gross loan portfolio of USD 195 million with 1.1 million borrowers and deposits of USD 157 million from 1.4 million depositors.
The Economist Intelligent Unit, the business information arm of the group that published The Economist magazine, has released the Microscope study annually for the past four years. This year it covers 55 countries in Asia, Eastern Europe, the Middle East and Africa as well as Latin America and the Caribbean.
By Sarah Benali, Research Associate
Sources and Additional Resources
IDB Press Release: “Global Microscope 2012: Microfinance responds to call for responsible finance,” October 2012, http://www.iadb.org/en/news/news-releases/2012-10-02/peru-and-bolivia-top-2012-global-microscope,10142.html
MicroCapital.org story: “MICROFINANCE PUBLICATION ROUND-UP: Microfinance Microscope 2012; Impact of Financial Access in Bosnia and Herzegovina; Economic Opportunities and Financial Outcomes of Microfinance,” October 15, 2012, http://www.microcapital.org/microfinance-publication-round-up-microfinance-microscope-2012-impact-of-financial-access-in-
MicroCapital.org story: “MICROCAPITAL BRIEF: Nigerian Microfinance Banks to Adopt International Financial Reporting Standard (IFRS) by March 2013,” April 2, 2012, http://www.microcapital.org/microcapital-brief-nigerian-microfinance-banks-to-adopt-international-financial-reporting-standard-ifrs-by-march-2013/
MicroCapital.org story: “MICROFINANCE PAPER WRAP-UP: Global Microscope on the Microfinance Business Environment 2011,” February 9, 2012, http://www.microcapital.org/microfinance-paper-wrap-up-global-microscope-on-the-microfinance-business-environment-2011/
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