The African Microfinance Panorama
This presentation describes microfinance in Africa from the 70s till today and the future challenges that it faces. It gives examples from the K Rep bank of Kenya and the June 2003 bulletin of MBB MIX (MicroBanking Bulletin - Microfinance Information eXchange).The paper mentions that developments in the sector have been marked by:
- Changes in service delivery methods;
- Focus on financial system approach and sustainability;
- Interactions, outreach and formation of networks with the outside world;
- Lobbying and promulgation of microfinance institution (MFI) regulation;
- Transformation of MFIs into regulated financial institutions and vice versa;
- Legitimization of MFI as an important part of conventional banking.
The paper mentions that at present, nearly 30% of the sector is regularized with large players and banks dominating, while the rest is still managed by NGOs and village groups.
It outlines the lessons learnt and the external and internal challenges faced by this sector and uses the MBB MIX June 2003 bulletin for a comparative analysis of large, medium and small MFIs across African, Asian and Latin American on:
- Outreach;
- Financing structure;
- Different financial ratios.
Looking towards the future, the presentation surmises that:
- Regulatory environment will become important;
- Multiple models of MFIs will develop and coexist;
- Competition among the players will be strong;
- Information technology and product diversity will be important drivers.
