2006 Central Asia Microfinance Analysis and Benchmarking Report - English
The young and rapidly changing microfinance sectors in Central Asia are deserving of special attention within the overall Eastern Europe and Central Asia (ECA) region. While the four Central Asia republics in question —Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan —have only 12 percent of the population in the region, the incidence of poverty is more than twice as high, with Central Asia home to 28 percent of the poor population in ECA. Some 1,100 microfinance providers within Central Asia seek to reach these marginalized populations, employing a wide array of institutional structures and development strategies. This young sector is changing very rapidly, with new institutions constantly forming, while some established institutions expand, and others stagnate. Moreover, due to weak financial sectors in Central Asia, the leading microfinance institutions often rival or even surpass commercial financial institutions in the scope of their outreach.
Downscaling banks and credit unions saw declining outreach and larger average loan balances. Microfinance banks continued to play a large role, with two more joining the ranks—Aiyl Bank in Kyrgyzstan and the Mikrokredit Bank in Uzbekistan—and several other large institutions planning for transformation. By far the largest share of the sector belonged to microfinance institutions (non-bank and NGO providers), with over 60 percent of current outreach and almost all of the growth during the past year. This group covers more than 500 MFIs, including some of the most profitable globally, with wide margins typical of markets that still lack substantial competition. The leading institutions in the region have been able to access external financing and to grow rapidly, but beyond this select group, several hundred smaller MFIs have had higher expenses (and higher cost to clients) and lower sustainability. A central theme of this report is to track these gaps between institutions in the young and shifting microfinance landscape of Central Asia. The report highlights gaps in donor resources to the region, external investments and in the performance of microfinance institutions. Three different data sets are drawn on to reflect this structure of the sector:
• Survey data by Central Asia Microfinance Center (CAC): This data set provides the most complete landscape description of microfinance in Central Asia, drawing on data from associations, regulators and donors to compile aggregate statistics for all types of microfinance providers. In total, this survey covers some 1100 institutions. Given this broad sample, only basic volume data (borrowers, savers, loan portfolio) is available.
• MIX Market (MM) data for a broad sample of 80+ institutions providing performance data over the last four years. These institutions were selected based on their willingness to be financially transparent, but they represent a much broader view of the sector including many small institutions and several recent start-ups, and cross the range of institutional types. Only 25 institutions in the region listed gross loan portfolios over 1 million USD in 2006, and as a result this sample includes several institutions with portfolios well under 100,000 USD.
• MIX MicroBanking Bulletin (MBB) benchmarks for 27 of the leading MFIs in the region. These institutions were selected based on their leadership in overall outreach and their ability to provide transparent, detailed reporting. Together, these 27 institutions (less than 3 percent of the total), reach over 55 percent of the borrowers in the region.
Together, this data represents the most detailed and comprehensive collection of performance data for microfinance institutions in the region. Data for all of the individual institutions included in the study is publicly available online and regularly updated at www.mixmarket.org.
