Large MFIs Dominate Investor Portfolios and Client Services

MIX’s 2006 benchmarking results show another hallmark year of growth for microfinance. MFIs expanded outreach at a continued, measured pace, while commercial borrowings to MFIs grew nearly twice as fast, at over 60 percent. Yet, despite growth and innovation among startup MFIs, microfinance remained a concentrated industry. A handful of large scale MFIs served the majority of global clients, and absorbed most of the commercial capital seeking investment opportunities in microfinance. This increasing commercialization of funding put greater pressure on MFI margins, leaving returns flat over 2005. With little room to negotiate lower better prices for clients, MFI managers left credit yields steady over the year.

These highlights offer a glimpse into this year’s industry results. Panel data on one year trends draw on a sample of 450 MFIs reporting both 2005 and 2006 figures. Surveyed institutions reached more than 52 million borrowers with 23 billion USD in loans in 2006 and mobilized more than read more…