MICROFINANCE PAPER WRAP-UP: “2012 Asia Regional Snapshot”; by Amar Samarapally; published by Microfinance Information Exchange

By Amar Samarapally, published by Microfinance Information Exchange, February 2013, 19 pages, available at: http://www.themix.org/publications/mix-microfinance-world/2013/01/2012-eastern-europe-and-central-asia-regional-snapshot

This Microfinance Information Exchange (MIX) report reviews the performance of microfinance institutions (MFIs) during 2011 in two of the six world regions designated by MIX: East Asia and the Pacific (EAP) and South Asia. Of the data compiled on the MIX Market website, Asia accounts for approximately 69 percent of the number of outstanding loans worldwide, but 46 percent of the global gross loan portfolio. While Asia has the lowest average loan balances worldwide, it is the leader in the number of depositors at 34 million and total amount of deposits at approximately USD 33 billion. Asia also has the highest outreach to women, with women representing about 90 percent of microcredit borrowers in South Asia and 85 percent in EAP.

According to the report, trends in the funding sources of MFIs have not changed from the previous year, though reliance on borrowing has decreased. Interest rates on wholesale borrowing in EAP have decreased to an average of 4 percent, while rates in South Asia remain unchanged at 8.3 percent. Deposits remain the dominant source of funding, and this reliance has increased steadily since 2009. Funding for Asian MFIs principally stems from domestic sources as regulations in major microfinance markets such as Bangladesh, India and Pakistan restrict foreign funding. Cambodia, which depends almost completely on foreign funding, is the region’s only significant outlier.

South Asia has experienced a steady increase in return on assets (ROA) since 2007, while ROA levels in EAP are still recovering from the global financial crisis. Almost all Asian countries had positive average ROA in 2011. In terms of profitability, the microfinance sector in EAP has become more efficient by reducing personnel and administrative costs. While MFIs in South Asia have achieved increased revenue, personnel and administrative expenses remain unchanged. Costs in South Asia are much higher than in EAP mainly due to the influence of relatively high inflation and risk in India and high banking expenditures in Bangladesh. Default rates have decreased in both South Asia and EAP.

The author concludes by suggesting what he finds to be the most important developments in Asia. The region is the global leader in the total share of deposits and depositors, even though not all countries in the region allow MFIs to accept deposits. Asia also has the highest levels of outreach to women customers, though EAP has the lowest percentage of female staff. Lastly, India leads Asia in the number of loans outstanding, which the author attributes in large part to many large MFIs in the country changing their legal status from NGO to non-bank financial institution (NBFI), which allows for a greater variety of funding sources and often increases investor confidence.

By Brendan Millan, Research Associate

About Microfinance Information Exchange (MIX)
The Microfinance Information Exchange (MIX) is a US-based nonprofit provider of performance data and analysis on microfinance institutions (MFIs), funders, networks and service providers dedicated to serving the financial needs of low-income clients. The mission of MIX is to strengthen the microfinance sector and financial inclusion in general by promoting transparency. The organization’s MIX Market website offers access to financial and social performance information covering approximately 2,000 MFIs. MIX publications include the MicroBanking Bulletin and MIX Microfinance World, which feature periodic research and data analysis. Incorporated in 2002, MIX is headquartered in Washington, DC, with regional offices in Azerbaijan, India, Morocco and Peru. Its supporters include the Bill & Melinda Gates Foundation, CGAP (Consultative Group to Assist the Poor), Omidyar Network, The MasterCard Foundation, the UN’s International Fund for Agricultural Development, the Michael & Susan Dell Foundation, Citi Foundation, Ford Foundation and Deutsche Bank. For the year 2012, MIX reported total assets of USD 4.89 million [2].

Sources and Resources:

[1] Microfinance Information Exchange: “2012 Asia Regional Snapshot” by Amar Samarapally, http://www.themix.org/publications/mix-microfinance-world/2013/01/2012-eastern-europe-and-central-asia-regional-snapshot

[2] Microfinance Information Exchange: “Fiscal Year 2012 Annual Report”, http://www.mixmarket.org/sites/default/files/fy2012_mix_annual_report.pdf

MicroCapital.org story, February 22, 2013, “2012 Eastern Europe and Central Asia Regional Snapshot”; by Ralitsa Sapundzhieva and Agharazi Babayev; published by Microfinance Information Exchange”, https://www.microcapital.org/microfinance-paper-wrap-up-2012-eastern-europe-and-central-asia-regional-snapshot-by-ralitsa-sapundzhieva-and-agharazi-babayev-published-by-microfinance-information-exchange/

MicroCapital.org story, March 26, 2012, “MIX Snapshot of Microfinance in Asia, How Social Entrepreneurs Spread Innovation, Impact of Thai Million Baht Village Fund”, https://www.microcapital.org/microfinance-publication-round-up-mix-snapshot-of-microfinance-in-asia-how-social-entrepreneurs-spread-innovation-impact-of-thai-million-baht-village-fund/

MicroCapital.org story, January 13, 2012, “Microfinance Information Exchange (MIX) Releases 2010 Latin America & the Caribbean Regional Snapshot”, https://www.microcapital.org/microcapital-brief-microfinance-information-exchange-mix-releases-2010-latin-america-the-caribbean-regional-snapshot/

MicroCapital.org story, June 30, 2010, “Microfinance Information Exchange (MIX) and Global Impact Investing Network (GIIN) to Share Data With $187,000 Grant From Rockefeller Foundation”, https://www.microcapital.org/microcapital-brief-microfinance-information-exchange-mix-and-global-impact-investing-network-giin-to-share-data-with-187000-grant-from-rockefeller-foundation/

MicroCapital Universe Profile: Microfinance Information Exchange, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Information+Exchange+%28MIX%29

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at  https://www.microcapital.org/products-page/


Similar Posts: