emn-cermi seminar: microfinance in europe daniel sorrosal (eu liaison officer at the european...
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EMN-CERMi Seminar:Microfinance in EuropeDaniel Sorrosal(EU Liaison Officer at the European Microfinance Network)
Marcella Corsi(Core Member of the EMN Research Working Groupand Associate Researcher at CERMi)
Thursday, 23 September 20103.00pm 5.00pmSeminar RoomCentre Emile Bernheim, Universit libre de Bruxelles
2Survey of 2008-2009 activities: Successful Collaborative Effort
Built on the strengths of the previous surveys conducted on EMNs behalf in 2003, 2006 and 2008.Shortened survey questions to focus on most relevant topics Incorporation of new questions related to EMN working groups: Social Performance, IT, RegulationStandardized financial indicatorsContinued and improved data disaggregation: gender, ethnicity, immigrant status, youth, disabilityQuestionnaire available in Bulgarian, English, German, Hungarian, Italian and Spanish.
Work Coordinated by Nantik Lum Foundation (Spain) with the efforts of 11 collaborating organizations
Rseau Financement Alternatif ASBL (RFA), BelgiumCentre for Entrepreneurship and Executive Development (CEED), BulgariaEuropean Microfinance Network (EMN), FranceDeutsches Mikrofinanz Institut (DMI), GermanyHungarian Microfinance Network (HMN), HungaryGiordano Dell Amore Foundation (FGDA), ItalyINHolland University of applied sciences, Center for Microfinance and Small Business Development , the NetherlandsEUROM Consultancy, RomaniaFundacin Nantik Lum, SpainNtverk fr Entreprenrer frn Etniska Minoriterer (NEEM), SwedenIndependent Microfinance Consultant and Director of the Centre for Responsible Credit, United Kingdom
Large Number of Responses170 institutions representing 21 countries from the European Union97 new respondentsMore responses from institutions in Norway, Sweden, and Ireland, compared to previous surveyFirst time responses from Croatia, Estonia, Latvia, and LithuaniaNo responses from Austria and Slovakia due to absence of current microcredit programmes
Great diversity in Loans DisbursedNumber of loans disbursed by country range from 6 to 28,863 for 2009.
Factors that influence loan numbers by country appear to be:Age of sectorNumber and types of actors and their geographic reachWhether microlending is the primary activity or one of many activities carried out by the organization
E.g. in France: Two lenders in the market since the 1980s, with national coverage, but with different lending methodologies: 1 not-for-profit organization with zero-interest quasi-equity loans that allow beneficiaries to access significant complementary bank credits; 1 NGO providing standard microloans with interestE.g. in Hungary: small foundations operate locally; a bank working on the international level disbursed 9,500 loans; E.g. in Germany: 60% of organizations started lending after 2005, they operate locally; a government body operating internationally disbursed 7,000 loans
In 2009, a total of 84,523 microcredits for 828 million euros were granted*. In Western European countries, 51,027 loans were made for 477 million euros, while in Eastern Europe 18,293 loans were made for 307 million euros. 72% gave the figures for their active clients. End of 2009: 135,815 active clients.
74% of organisations have lent 49.9 billion for 237,495 loans since their creation.
*The data didnt include one major actor in Poland and the network of Procredit banks in Eastern Europe.
Number of loans disbursed in 2009
Number of active clientsThere are organisations that reported more numbers of loans than numbers of active borrowers:. This is the case in Germany, Hungary, Latvia, Netherlands, Sweden. In the case of Poland the difference is due to the fact that Fundusz Micro is included in number of loans disbursed but not in number of active clients.
Growth and Decline at the same time Between 2008 and 2009 the number of loans disbursed decreased by 7%.
Highest Sector Growth Rates from 2008 to 2009 in: Hungary (49%) Italy (40%) The Netherlands, Latvia, due to the incorporation of new institutions that began activities in 2009.
- In terms of the highest growth in terms of number of loans disbursed: Hungary (3412 more loans than in 2008), France (2154), Italy (545) and Finland (485).
Evolution in loans disbursed by country
NGOs and are the main Actors
Young sector with many small actorsOnly 40% of lenders participating in the survey were active before 2000
Nine new actors started lending in 2008 and another nine started lending in 2009
Most lenders in the EU/EEA disburse less than 50 loans a year (57%).
On the other hand, 13% of the organisations disbursed more than 400 loans in 2009
A young and growing MF sector
Not only microcredit for enterprise development42% provide other types of financial services
Loan Products and Pricing: Diversity in Loan Sizes and Interest ratesA variety of loan sizes offered to clients.
The maximum loan size offered to clients ranges from 37,000 to 220 (even if the EU defined a microcredit as being below 25,000).
(Non-weighted) Interest rates charged range from 2% at the lowest to 22% at the highest. The average is 9%.
Average (non-weighted) interest rates vary by country - the highest rates are charged in the United Kingdom (22% average), Poland (17% average) and the lowest in Portugal and Finland (3% and 2% respectively).
Broad Range in Average Loan Size
The average loan amount is 10,012.
It has decreased compared to 2007 (average loan size 11,002).
Despite this, we find that in some EU countries, loan disbursements are moving toward larger loans and the higher end of the market.- E.g. Netherlands average loan size 14,745- E.g. United Kingdom average loan size 9,623- E.g. Hungary average loan size 14,545
Average loan size per country
Average Loan Size by type of MF actorFinancialInstitutioncooperativeBankFoundation
Depth of outreach
Determined using the World Bank data for 2007 GNI per capita per country and average loan size.
Limited Data on Portfolio PerformanceAlthough more institutions responded in this current survey than in previous surveys, the number of responses continues to be low. Due to: Under-developed MIS systems Confidentiality policies (Banks)
For the data available in 2009*: - Average repayment rate of 83%, 6 points lower than the previous survey (around 90%) - Percent Portfolio at risk (>30) is 16.8% (14% previous survey) - Value of write offs was 5.2%, of average portfolio outstanding, similar to the previous survey - Average Operational Self-Sufficiency: 98.7%* On basis of response rate (CRR: 16.5%, PAR>30: 37%, Write-offs: 35%, OSS: 28%)
External Funding plays still an Important RoleOperational Costs:In contrast to the previous survey, 60% of survey respondents cover their operational costs through earned income (fees, interest and income earned on assets).
Loan Capital:Loan capital comes from a combination of public and private sources, with public sources most important: Public sector 50% Own funds, Private sector, Client deposits, commercial debt
Future VisionReaching financial sustainability remains the primary concern for the responding organizations.Access to long-term fundingRegulatory flexibilityGrowth of operations and targeting new client groups
Most Important Future Goals
- Information was not received from Fundusz Mikro in Poland.- *For these numbers, the data of Fundusz Mikro have not been includedThe Netherlands and Latvia, while their growth rates were 3475% and 148% respectively for the year 2009, have not been included because their exceptional growth rates are due to the incorporation of new institutions that began activities in 2009.In Europe loans worth 25,000 euros or less are considered to be microloans. - Management information systems can help lenders assess and improve long-term financial sustainability