Benchmarking Microfinance in Central America 2005

This report analyzes and evaluates the performance of microfinance institutions (MFIs) in Central America (CA).The report compares the characteristics of CA MFIs with the rest of Latin American and the Caribbean MFIs using reliable performance indicators and better characterization of market. It comprises the following sections:

• Data and comparison scales,
• Scale and outreach,
• Financial structure,
• Profitability and sustainability,
• Revenue,
• Expense,
• Efficiency and productivity,
• Portfolio quality,
• Comparative benchmarks and indicators definitions,
• Conclusions.

Based on the analysis, the report draws the following conclusions:

• The microfinance industry in the CA continues to evolve in positive manner,
• The profitability and sustainability of MFIs varies by country,
• The competition and transformation into regulated entities contribute to the growth of the sector,
• The high operating costs and limited access to capital are the key challenges faced by MFIs.

The report, thus, concludes that the growth of the microfinance industry depends on having a political environment and regulatory framework favorable to MFIs.