Publications

In 2005, the microfinance sector in sub-Saharan Africa continues to serve some of the most vulnerable and unbanked populations in the world. Clients across the region greatly value both credit and deposit services and African microfinance institutions (MFIs) are determined to meet their needs. Savings form an integral part of the financial services African MFIs offer, and while growth has been slow in credit outreach, deposit mobilization has expanded almost twofold between 2004 and 2005. Yet despite these accomplishments and more so than in any other region, African MFIs face significant challenges in pursuing their activities including high operating costs, unfavorable macroeconomic factors, increasing competition and little access to commercial funds.

African MFIs are gradually surmounting these hurdles in order to offer an array of services to an increasingly demanding clientele. The Microfinance Information Exchange, Inc. addresses these issues in this year’s report Benchmarking African Microfinance 2005. The study looks at 71 institutions across 23 countries, the largest sample of MFIs in Africa to date to participate in MIX’s international benchmarks. This report offers a rich, in-depth analysis of the performance of African microfinance sector and explores microfinance in the region through one primary lens: financial intermediation. Indeed, institutions which operate on a full intermediation basis (using client deposits for on-lending) are performing differently – and often better in outreach and profitability terms – than their credit-only counterparts. This report uses a number of peer groups which allow for a more fine-grained analysis of the sector along criteria such as scale, sub-region, institutional charter and sustainability.