Marika Mathieu


Microcredit sector rising.

Microcredit is not new, but thanks to its success, it is emerging from the shadows.

During the last review of the Microcredit Summit in 2009 , the campaign director, Sam Daley-Harris, could not find his words to underline the miracle: in 2007, more than 100 million of the poorest families had benefited from microcredits in the world. Achieving this goal, set during the 1997 summit, would have changed the lives of half a billion people, including family members of clients.

This result is based on the flourishing development of microfinance on all continents. For five years, its growth has been maintained at an athletic rate of about 30% per year. It is estimated that more or less 10,000 the number of microfinance institutions (MFIs) which today weave the meshes of the sector. The 100 largest MFIs, ie 1% of the sector, but which concentrate a third of borrowers, obtained an average return on assets of 14% in 2006, against 2% for the traditional banking sector in the same countries. Repayment rates are around 97% on average. Customers are certainly poor, but trustworthy.

This promising potential does not go unnoticed by public and private investors. The volume of investments allowing the financing of the outstanding credit of MFIs experienced a spectacular explosion in 2006, reaching 25 billion dollars against 17 billion in 2005 . If the primary source of financing for MFIs remains the savings of borrowing clients themselves, the investment of private and social actors is now a fundamental trend in the sector.

Even with a slight slowdown due to the crisis, the global outlook is impressive. The potential microfinance market is of the order of 1.5 billion people (or 50% of the number of people of working age and excluded from the traditional banking system in developing countries). 85% of the sector is developing in Asia where the high population density and the weak development of the banking sector offer exceptional growth prospects.

The current supply would only correspond to 10% of potential credit needs.

In other words: this is just the beginning.

Translated by Google
This article is part of the special report: