MICROFINANCE BAROMETER 2019 IN PARTNERHIP WITH 10th Edition 10 YEARS ALREADY! v A LOOK BACK AT THE TRENDS IN MICROFINANCE Content PAGES 2-3 vvv KEY FIGURES OF FINANCIAL INCLUSION IN THE WORLD PAGES 4-5 KEY FIGURES OF FINANCIAL INCLUSION IN EUROPE & FRANCE PAGES 6-13 SPECIAL REPORT: TRENDS AND EVO- LUTIONS OF MICROFINANCE OVER THE LAST10 YEARS PAGES 14-15 MICROFINANCE AND RESILIENCE TO CLIMATE CHANGE PAGE 16 HOW DOES MICROFINANCE HELP REFUGEE INTEGRATION © Advans Group point. Over-indebtedness of some a number of financial and non-fi- quires all investors to mobilise to of microfinance’s beneficiaries nancial services. In 2016, one year build a more sustainable world. EDITORIAL and the excessive profits gene- after the adoption of the Sustai- rated by microfinance institutions nable Development Goals (SDGs), This new Barometer thus looks (MFIs) paved the way to waves the Barometer points out that back at the developments in mi- Despite positive transformations of criticisms against the sector. microfinance promotes access to crofinance over the past ten years in recent years, microfinance These episodes have revealed the credit, but also to health, agricul- to highlight the evolutions of the is sometimes misunderstood or dangers of an unchecked microfi- ture, education, energy and hou- sector. Expertise in creating tools poorly perceived by the public nance and the impact it can have sing services. and indicators to measure social opinion and by economists. Today, on its beneficiaries when it is not performance, the responsible use for its 10th anniversary, the Micro- managed responsibly. Self-regu- For 10 years, these Barometers of new technologies, the diversi- finance Barometer proposes to latory measures have since then have focused on honestly ana- fication of services (financial and consider microfinance as an en- been developed and ameliorated, lysing the transformation of mi- non-financial) to include the most tire segment of development po- demonstrating a willingness to crofinance. If the rise of impact vulnerable populations: there are licies and as a pioneering sector professionalise this sector from investing has seemed to oversha- many lessons to be learned from of responsible finance. In order within. dow microfinance, recent editions the changes in microfinance. to understand the stakes of mi- instead present it as a pioneer of crofinance, let us shed light on its Following these years, microfi- impact investing, with a variety May they be useful in the history. nance then entered a phase of of crucial lessons to teach new growing field of impact investing. professionalisation and of institu- players of the responsible finance CONVERGENCES While the emergence of micro- tional strengthening. This trans- sector. The fact that microfinance finance in the mid-2000s, led by formation can be broken down no longer has a monopoly on im- Nobel Peace Prize winner Mu- in three parts: the diversification pact investment is not bad news, hammad Yunus, generated a of investments, the increasing on the contrary. The efforts to wave of optimism in the world, and innovative use of new tech- achieve the SDGs by 2030, esti- the early 2010 marked a turning nologies and the development of mated at $5 trillion by the UN, re- KEY FIGURES OF FINANCIAL INCLUSION | WORLD Global microfinance figures What are the trends? ince 2010, the Microfi- nance Barometer anal- S yses key figures on financial inclusion worldwide, using MIX Market figures on World Total 2018 & growth since 2009 the global microfinance mar- ket. Here is a look back at the Other MFI 20% 80% Eastern Europe and Central Asia main trends in the sector. 24% $124 B 51% 49% $5.7 B In 2018, 139.9 million Top 100 MFI 76% borrowers benefited 140 M 916 136 2,5 M 62% South Asia 2016: +9.4% 65% 2016: -11.1% 2016: -2.5% 11% 89% 2016: +9.6% 2017: +6.5% from the services of 2017: +15.6% 2017: -2.3% 2017 : +5.6% 2018: +13.1% 2018: +8.4% MFIs, compared to only 2018: +8.5% 2018: +9.5% 150 Evolution of the portfolio at risk > 30 days 8% Middle East and North Africa 98 million in 2009. Of Number of active borrowers $36.8 B 40% 60% 120 (million) 7% these 139.9 million $1.5 B Gross loan portfolio 6% 214 (USD billion) 2.5 M 47% borrowers, 80% are 90 5% 29 2016: +3.2% 2016: +7.1% 85.6 M 72% 4% 2017: +13.5% 2017: +11.4% women and 65% are 60 2016: +23.5% 2016: +13.4% 9 0 1 2 3 4 5 6 7 2018: +11.4% 2018: +9.5% 9 0 1 2 3 4 5 6 7 8 200 201 201 201 201 201 201 201 201 2018 2017: +24.2% 2017: +6.6% rural borrowers, pro- 200 201 201 201 201 201 201 201 201 201 2018: +10.3% 2018: +13.8% portions that have re- Africa East Asia and Pacic mained stable over the Latin America and Caribbean 36% 64% past ten years, despite $10.3 B 27% 73% the increase in the nu- 37% 63% 129 6,3 M 60% mber of borrowers. 2016: -0.6% 2016: +2.3% $21.5 B $48.3 B 2017: +3.5% 2017: +0.4% 2018: +5.5% 2018: +0.3% 160 20.8 M 79% Focus on institutions and 248 2016 : +9.2% 2016: +8.0% clients 22.2M 23% 2017 : +18.1% 2017: +10.6% 2018: 14.6% 2018: 10.2% In ten years, microfinance 2016: +8.1% 2016 : +3.1% institutions (MFIs) have lent 2017: +12.4% 2017 : +1.1% 2018: -0.3% hundreds of billions of dollars, 2018: +5.7% with an average annual growth rate of 11.5% over the past five Number of MFIs reporting to the Portfolio size Number of borrowers Proportion of rural borrowers years. At the same time, the MIX (consolidated data for year 2018) number of borrowers world- wide continued to increase Over the past decade, MFIs bilised between 2016 and 2018 amount of borrowers (85.6 mil- - albeit at a slower pace than have also improved their ef- at around 7%. lion in 2018), with this number in the 2000 to 2010 period - re- ficiency. Despite a decade growing faster than in other cording an average annual marked by a sharp increase Focus on the regions regions (+13.8% between 2017 growth rate of 7% since 2012, in the cost per borrower, from and 2018). It also has the top compared to a rate of nearly an average of $68.4 in 2009 to South Asia continues to dom- three markets in terms of bor- 20% in the previous decade. $106.7 in 2018 (+56%), the oper- inate global microfinance: it rowers, India, Bangladesh and ating expense ratio decreased is the region with the largest Vietnam. In 2018, 139.9 million borrow- by 2.7 points over the period. ers benefited from the services Between 2009 and 2018, MFIs of MFIs, compared to just 98 also recorded an increase in MFIs average performance ratios in 2017 (consolidated) million in 2009. Of these 139.9 their returns on assets (+1.3 million borrowers, 80% are points) and equity (+2.9 points). women and 65% are rural bor- Portfolio yield 19.2% rowers, proportions that have Nevertheless, there was a remained stable over the past slight deterioration in the qual- Operating expense ratio 10.6% ten years, despite the increase ity of the portfolio over the en- in the number of borrowers. tire period, with the portfolio at Portfolio at With an estimated credit port- risk (PAR) over 30 days having risk 30 days 6% folio of $124.1 billion, MFIs re- risen from 6.4% in 2009 to 7% corded another year of growth in 2018. After a decline in the Return on in 2018 (+8.5% compared to PAR > 30 days between 2010 11.5% equity 2017). and 2012, it rose again and sta- MICROFINANCE 2 BAROMETER 2019 KEY FIGURES OF FINANCIAL INCLUSION | WORLD only experienced weak growth between 2017 and 2018 (+1%), Eastern Europe and Central Asia recorded an increase of World Total 2018 & growth since 2009 5%, an improvement after the decline in 2015 and 2016. Other MFI 20% 80% Eastern Europe and Central Asia 24% The total outstanding amount $124 B 51% 49% of African MFIs has increased $5.7 B by 56% since 2012, while the Top 100 MFI 76% number of borrowers increased 140 M 916 136 2,5 M 62% South Asia by 46% over the same period to 2016: +9.4% 65% 2016: -11.1% 2016: -2.5% 11% 89% 2016: +9.6% 2017: +6.5% reach 6.3 million people in 2018. 2017: +15.6% 2017: -2.3% 2017 : +5.6% 2018: +13.1% 2018: +8.4% Despite a low quality portfolio 2018: +8.5% 2018: +9.5% (13.6% PAR > 30 days in 2017) 150 Evolution of the portfolio at risk > 30 days and high costs per borrower, 8% Middle East and North Africa Number of active borrowers $36.8 B 40% 60% the portfolio continues to show 120 (million) 7% $1.5 B a strong yield - 20% - but down Gross loan portfolio 6% 214 (USD billion) 2.5 M 47% 6.6 points. The return on assets 90 5% 29 2016: +3.2% 2016: +7.1% 85.6 M 72% also remained positive - 1.9% - 4% 2017: +13.5% 2017: +11.4% 60 2016: +23.5% 2016: +13.4% 9 0 1 2 3 4 5 6 7 2018: +11.4% 2018: +9.5% but down (-1.4 points). 9 0 1 2 3 4 5 6 7 8 200 201 201 201 201 201 201 201 201 2018 2017: +24.2% 2017: +6.6% 200 201 201 201 201 201 201 201 201 201 2018: +10.3% 2018: +13.8% Africa Finally, with 73% female cli- East Asia and Pacic ents and 79% rural borrow- Latin America and Caribbean 36% 64% ers, MFIs in East Asia and the $10.3 B 27% 73% Pacific continue to grow with 37% 63% a portfolio of $21.5 billion in 129 6,3 M 60% 2018, up 13.1%.