Overview of the Outreach and Financial Performance of Microfinance Institutions in Africa

Microfinance institutions (MFIs) in sub-Saharan Africa include a broad range of diverse and geographically dispersed institutions that offer financial services to low-income clients: non-governmental organizations (NGOs), non-bank financial institutions, cooperatives, rural banks, savings and postal financial institutions, and an increasing number of commercial banks. Overall, the sector in Africa is dynamic and growing. While some large cooperatives date back to the 70s, industry analysts have seen numerous institutions emerge in the last eight years. These institutions appear to serve the broad financial needs of their clients. Unlike trends in most regions around the globe, the majority of MFIs in Africa offer savings as a core financial service for clients and use it as an important source of funds for lending. By and large, African MFIs are important actors in the financial sector and it is important for industry analysts to understand how the sector is evolving.