2003 South Asia Performance and Transparency Report

The South Asia Performance and Transparency 2003 paper combines local knowledge of the sector with international industry reporting norms to explore the performance of South Asian microfinance and describe the factors that contribute to our understanding of that performance.

A wealth of information on South Asian microfinance lurks in the shadows as the region’s impressive achievements in outreach grab the spotlight. Around the globe, microfinance in South Asia is synonymous with giants like Grameen Bank, ASA and BRAC. Together with the self help groups in India, these institutions have revolutionized access to financial services, providing microloans on a grand scale to some of the poorest clients in the world. Massive credit outreach is but a piece of the picture, and details on the financial performance of the sector are not as well known. These aspects remain hidden behind the veil of weak dissemination of industry reporting standards, poor financial disclosures and few public information centers on microfinance institutional performance. Yet behind that veil, a diverse set of microfinance institutions breaks productivity and efficiency records to deliver an ever increasing range of financial services to poor and excluded clients. These institutions reach out to commercial banks and draw from client deposits to fund a rapidly growing loan portfolio, even as they strive to become and remain sustainable. But dangers also loom in the sector, as institutions increasingly leverage minimal capital beyond prudent norms, funding loan portfolios of unknown quality. By applying international reporting standards to a broad set of microfinance institutions from across the region, this report seeks to highlight the performance of the sector, both within the region and on the global stage.