Benchmarking Microfinance in Eastern Europe and Central Asia 2005

This report evaluates the microfinance sector of the Eastern Europe and Central Asia (ECA) on various performance criteria based on the data from 108 institutions.The microfinance sector of ECA is one of the youngest and the smallest. The report analyzes the sector under the following points:Scale and outreach

• Economic development and microfinance weakens as one moves eastwards in the region.
• Banks dominate the region in terms of scale and outreach, though NBFIs and NGOs have a marked presence.
• However, they reach to higher end target markets by global standards.

Financial structure

• ECA MFIs, as a whole, are among the least leveraged.
• Commercial funds are primarily directed at higher-end MFIs, while donations and reserves fund towards the lower end institutions.
• As in other regions, majority of the MFIs cannot mobilize savings.

Profitability

• There is a broad trend for lower returns in countries with deeper financial sectors, while the profits are higher in the underserved Caucasus and Central Asia.
• However, Bosnia is an exception.

Efficiency and risk

• Overall costs are higher at NGOs and lowest at Banks.
• The productivity levels remain lower as per global standards, but they are highest for institutions serving lowest markets.
• Delinquency though low overall, is higher in deeper markets.