MicroBanking Bulletin, September 2010 (Issue No. 20)
The newest issue of the MicroBanking Bulletin includes two comprehensive analytical papers on microfinance in critical economies, in addition to the much-anticipated 2006-2008 MFI Trend Line Benchmarks.
Indian MFIs: Growth for Old and New Institutions Alike, a chapter from Intellecap’s Inverting the Pyramid Report series, captures an Indian microfinance market whose structure and dynamics are vastly different from what they were two years ago. The industry emerged from the financial crisis more consolidated and dominated by fewer large commercial players.
In Microfinance Default Rates in Ghana, Gerald Pollio and James Obuobie present quantitative evidence on the factors that affect repayments among MFIs in Ghana that use the individual-liability loan contract.
The MFI Benchmark Trend Lines are more robust than ever, covering the years 2006 - 2008 on 1833 MFIs, and using data from 611 MFIs for the full 2006-2008 period. The Trend Lines cover 30 billion USD in loan porfolio and 65 million borrowers. Several trends come to light for this time period, including:
The period covered includes begin of slowdown in several regions, with the median MFI slowing to 11% growth in borrowers after previous years enjoyed 25% growth.
- Risk rises at the end of the period after several years at a stable rate. Portfolio at risk increases, but this increase does not yet translate into higher losses.
- Rising arrears put downward pressure on returns, which are shown to decline steadily throughout the period in all regions
Starting with the current issue, Issue No. 20, the MBB will be delivered online only, reflecting a changing readership and user feedback. The move online will enable additional changes to the MBB, most important of which will be a switch from semi-annual publication to more frequent delivery. Our commitment to data-driven, high-quality industry insight for practitioner use remains strong and we believe that these changes will improve MBB's ability to deliver against this goal.
Articles in this issue:
Chapter 3 of Intellecap's 2009 Report from their Inverting the Pyramid Series. *Intellecap*
*Gerald Pollio and James Obuobie*