Overview of Microfinance Institutions

There are approximately more than 10,000 Microfinance Institutions globally; ranging from non-government organizations, government agencies, private companies and commercial banks.  The top 100 Micro Finance Institutions, which are recognized providers in their respective markets and located across 38 key markets, collectively have about USD 52 billion of assets under management and serve 25.5 million borrowers.  In a 2014 research report authored by responsAbility Investments AG, it is estimated that the 30 most important micro finance markets would grow at approximately 19.3% per annum to reach USD 14 billion of additional demand in 2019.[1]

[1]http://www.globaltrends.com/images/stories/Articles/GlobalTrends%20A%20Conversation%20with%20Symbiotics%20March%202015.pdf

http://www.responsability.com/funding/data/docs/es/10427/Microfinance-Market-Outlook-2015-DE.pdf

http://www.fgda.org/dati/ContentManager/files/Documenti_microfinanza/rA_Microfinance_Market_Outlook_2014_EN.pdf

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In terms of looking at Ecuador as a specific country’s market, the Financial Industry report as of May 2015 by the Economist Intelligence Unit, the total bank lending is expected to increase by an annual average of 11.9% in nominal terms in 2015-19, of which micro-credit lending still account for less than 10% of total lending.

micro-finance-chart

According to the Economist Intelligence Unit, the number of households using financial services is low. “Of the adult population, 46% owned or shared an account at a formal financial institution, according to a household survey conducted in late 2014 by the World Bank and Gallup (US).  Just 14% of adults had saved money in a formal account in the previous year. Around 13% had originated a new loan from a formal financial institution, with 6% borrowing from family and friends”.

micro-finance-chart2