[email protected] www.e-mfp.eu
ADA Discussion Paper Series
ADA Discussion Paper No.2 It looks at 7 top MIVs and their outstanding amounts
to MFIs in the years 2007, 2008, 2009 It finds a concentration of funds in the larger,
older and more mature MFIs It discusses the possible consequences of this
concentration for the microfinance sector
[email protected] www.e-mfp.eu
The average outstanding amount of the 7 top MIVs lay at 2.63 million USD in 2007, at 3.10 million USD in 2008 and at 2.78 million USD in 2009.
2007 2008 2009
Number of MFIs funded 405 508 574
Total outstanding amount to MFIs (in thousand USD)
1,066,296 1,573,240 1,597,321
Average outstanding amount to MFIs (in thousand USD)
2,633 3,097 2,783
[email protected] www.e-mfp.eu
In each year, about 86% of the total outstanding amounts went to the first 250 MFIs, 10% to the next 150 MFIs and only 4% to the remaining MFIs.
Years
To
tal o
uts
tan
din
g a
mo
un
ts
(in
th
ou
san
d U
SD
)
86.13%
86.83% 85.35%
9.56%9.59% 9.78%
4.31% 3.58% 4.87%
[email protected] www.e-mfp.eu
Past performance and future potential of large and more mature MFIs is easier and cheaper to evaluate.
Funding of smaller and less mature MFIs seems,and often is, more risky.
Larger, more mature MFIs might grow even faster, but might also become less strict in their analysis and follow-up of projects (riskier loans, consumer loans, loans for other non-productive purposes > over-indebtedness).
There remain less opportunities for smaller, less mature MFIs to grow and to become more competitive.
[email protected] www.e-mfp.eu
Approach of MFIs with different criteria
Establishment of more MIVs with a structure that allows for a better risk management (one class of shares guaranteeing another classes of shares) and which allows for the taking of more risks
Facilitation of the access to ratings for high potential newcomers, fostering of co-funding initiatives (investors paying for information contained in the ratings?)
Complementation of financial support, especially of the smaller, less mature MFIs, by technical support or capacity building measures
