Situation and Perspectives at the end of 2021

The rapid growth of foreign private lending to microfinance institutions (MFIs) in the last several years has led to a surprising reversal of roles between government-owned development institutions and private lenders. Development institutions (International Financial Institutions -“IFIs”1 ) are concentrating their loans in the strongest MFIs, leaving private lenders to look for opportunities among smaller, riskier borrowers. Development institutions are “crowding” private lenders out of the best MFIs.

Only available in Spanish.

We share a brief analysis of the findings of our Financial Benchmark (Tunisia) as of December 2021.

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The purpose of this document is to share impressions on the performance of African MFIs and their year-end expectations regarding the development of the sector and their own operations.

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BEST PRACTICES IN CREDIT RISK MANAGEMENT IN TIMES OF CRISIS

MicroRate highlights some good practices identified in the MFIs it has rated in the midst of this scenario, which focus on containing credit risk and taking care of their financial sustainability. 

Read the English version here.

In this report we present the results of the survey conducted with the executives of the Microfinance Institutions (MFIs) based in Africa to know their expectations for the year 2021, in light of what happened in 2020 and the impact of Covid-19 on their activities.

Read the report here.

This article is only available in Spanish. (Link)

This report is only available in Spanish. (Link)

RISK MANAGEMENT SYSTEMS - REQUIREMENTS FOR COLOMBIAN SOLIDARITY ENTITIES

Only available in Spanish

GROUP METHODOLOGY, MAIN RISKS AND THREATS

While the placement of microcredits in a group expresses the essence of microfinance by its attention to the base of the pyramid, it may be the placement mechanism that is most exposed to operational as well as reputational risk.

Only available in Spanish.

Only available in Spanish.

This document gives the interpretation and calculation of the industry’s 18 most commonly used performance indicators.Four new indicators focus on social performance.

For each indicator, the Guide provides the definition, interprets its meaning, identifies potential pitfalls in its use, and provides regional benchmark values. Additionally, MicroRate added a section for each indicator, “How this relates to the traditional banking sector” to make the guide more useful to investors who are new to microfinance.

The indicators included in this guide are organized into five sections: portfolio quality, efficiency and productivity, financial management, profitability, and social performance. While many other indicators could be considered, the ones included are important indicators that, when taken together, provide a reasonable overview of the performance, risk and financial condition of an MFI as well as insight into its social performance.

Since this Technical Guide was first introduced in 2000, it has been adopted as a training manual and reference tool for the standardization of key indicators. We hope this document serves as a useful resource for investors to evaluate MFI performance.

This marks the 8th consecutive year that MicroRate has conducted its survey of microfinance investment vehicles (MIVs), which play a key role in connecting private and public capital with microfinance institutions (MFIs) around the world. Despite the ups and downs of the microfinance market, these market intermediaries have consistently continued to play this important role and we look forward to providing continued coverage of their activities in the years to come.

This year’s survey includes responses of 92 MIVs, out of a total 102 contacted. Of the estimated $8.5 billion in total global assets under management (AUM) as of year-end 2012, the 92 MIVs represented here account for $8.1 billion, or 95% of global AUM. We would like to thank every survey participant for his or her time and contributions.

The objective of this study is to identify the main problems faced by the Latin American microfinance sector in reporting and using credit bureaus as a tool to reduce the risk of over indebtedness. Furthermore, the study seeks to identify best practices that have been implemented in various countries to mitigate or avoid these difficulties.

This study is funded by the Multilateral Investment Fund (MIF), the Development Bank of Latin America (CAF), and Calmeadow, and is executed by MicroRate Inc.

This study examines whether investment contributed to recent microfinance repayment crises, and whether measures of investment activity might serve as early warning signals for future microfinance crises.

MicroRate’s 5th annual Survey of microfinance investment vehicles (MIVs) measures the development of a relatively new category of funds and other intermediaries that mobilize investments in rich countries and channel them to microfinance institutions (MFIs) in the developing world. 

The purpose of this study is to gauge the impact of the global financial crisis on the microfinance sector in Latin America and the Caribbean (LAC). The situation is still clearly

evolving. For example, in October 2008, when interviews with microfinance institutions (MFIs) first began, a majority of responses reflected that growth had slowed somewhat, but not dramatically.

This is the fourth consecutive year MicroRate has conducted the Survey to assess the impact of Microfinance Investment Vehicles (MIVs) as a funding channel for microfinance institutions (MFIs).

The main objective was to identify new MIVs and gather up to date information about the portfolios of new and existing MIVs. Information was collected through a structured E-Survey. 

The rapid growth of foreign private lending to microfinance institutions (MFIs) in the last several years has led to a surprising reversal of roles between government-owned development institutions and private lenders. Development institutions (International Financial Institutions -“IFIs”1 ) are concentrating their loans in the strongest MFIs, leaving private lenders to look for opportunities among smaller, riskier borrowers. Development institutions are “crowding” private lenders out of the best MFIs.

Only available in Spanish.