Publications

The Central American (CA) microfinance institutions (MFIs) showed positive performance in 2007, approaching the performance of the other countries in Latin America (LAC No CA). At the end of 2007, a continuous growth of credit activities is seen, reaching more borrowers, as shown by the annual increase of 23% in borrowers served by institution and an increase of 34% in the loan portfolio for the period 2005 - 2007, ending the year with a total loan portfolio of US$1,132.0 million for the 75 MFIs that reported their financial information for the period. This growth was not only due to the demand for micro credit, but also to the larger funding available in each country, led by the high participation of fund providing agencies, which totaled a balance owed of US$686 million, and to a lesser extent to the capacity of some institutions to intermediate deposits from the public (US$308 million).

The profitability indicators of the institutions grew moderately, approaching the performance of LAC No CA, which tended to decrease in 2007. The growth in profitability was followed by an increase in the levels of efficiency of the MFIs, reflected in the decrease by almost 4 points in operational expenses with respect to the average loan portfolio. Nevertheless, the results in operative efficiency are partly due to the growing average loan per borrower, which did not surpass those presented by the rest of Latin American countries. Within CA countries, Costa Rica and Guatemala stand out, reaching selfsufficiency as the rest of the countries.

An important scenario to take into consideration is illustrated by the Financial Intermediation peer group. For the first time it was segmented according to more differentiating characteristics regarding the capacity to attract deposits, which allow us to observe the development achieved by those institutions that are reaching different levels of regulation. The data indicate that as MFIs tend towards regulation, operational volumes grow, commercial funding sources increase, the structure of expenses is reduced and profitability stabilizes. However, the greater demands faced force these institutions to diversify their products toward segments with greater purchasing power and more profitable thus reducing its operational level of depth.

The Central American Microfinance Network (REDCAMIF) and the Microfinance Information eXchange (MIX) present the report “Benchmarking of the Microfinance in Central America 2007,” an analysis of the development of the industry with the most updated and recent information available. They also present for the first time the “Ranking of Central American Microfinance Institutions”, a list of the 10 most outstanding MFIs in seven performance categories.