Microfinance Horizon

CFSI’s Microfinance Banana Skins 2011

The CFSI Survey of Microfinance Risk

February, 2011

The Microfinance Banana Skins report, now in its third year, reflects changing perceptions of risk in a dynamic and fast-moving industry. T his year’s report shows that microfinance has come of age, and with that, new issues have arisen. In an increasing number of markets, the rapid rate of growth and outreach means that microfinance is confronting the same forces of competition, credit cycles, and consolidation seen in other sectors.

This survey explores the risks facing the microfinance industry at a time when hard questions are being asked about its future, prompted by growing doubts about its effectiveness as a source of small scale finance for the poor. One of the respondents summed up the significance of these doubts, saying they could “dissipate the fairy dust that has historically coated everything related to microfinance.” Many of the risks explored in this report reach the heart of the debate about where microfinance goes next.

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CGAP’s Financial Access 2010

The State of Financial Inclusion Through the Crisis

September, 2010

Financial Access 2010 is the second in the series of annual reports by CGAP and the World Bank Group to monitor statistics for financial access in the world and inform policy debate. The series was launched in response to the increasing interest in financial inclusion among policy makers and the development community. The first report, Financial Access 2009, introduced statistics on the use of financial services in 139 economies and mapped a broad range of policies and initiatives supporting financial inclusion.

Financial Access 2010 extends to 142 countries, and builds on last year’s data to update the statistics on the use of financial services, and analyzes changes that took place in 2009―a turbulent year for the financial sector in the majority of economies around the world. In addition to measuring the state of financial access, Financial Access 2010 expands on last year’s work by reviewing three policy areas relevant to the current financial access debate: financial inclusion mandates, consumer protection in financial services, and access to finance by SMEs.

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EIU’s Global Microscope on the Microfinance Business Environment 2010

This report highlights the opportunities and obstacles for microfinance worldwide

Peru offers the best microfinance business environment for the third year running, according to the Economist Intelligence Unit’s Global Microscope 2010. Yet the top spots have been shuffled this year, with the Philippines advancing to second place, overtaking the 2009 runner-up, Bolivia. New to the top ten, Kenya managed to climb three ranks and squeezed into tenth place overall; Pakistan jumped from 11th to fifth place thanks to regulatory reforms and an increased range of microfinance services. In turn, two countries–Uganda and Nicaragua–fell out of the top ten to take 11th and 13th spots, respectively. The Global Microscope 2010 is supported by the Multilateral Investment Fund (a member of the Inter-American Development Bank Group), CAF (the Andean Development Corporation) and the Netherlands Trust Fund at the International Finance Corporation.

“The Global Microscope supplies investors, lenders and donors with a comprehensive and comparable snapshot of each country’s microfinance sector,” said Vanesa Sanchez, project manager for the Global Microscope. “Regulatory frameworks are relatively advanced, but countries still fall short of providing the optimal conditions for microfinance.”

The regulatory environments in individual countries remain very much in flux. Public officials’ scrutiny of and attention to microfinance is increasing, but this interest has led as much to urgently needed reforms as it has to burdensome regulation. Eleven countries saw significant, positive changes in their regulatory environment, whereas another 12 saw notable deterioration.

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