Arab Microfinance Regional Report: An Industry Update

Microfinance in the Arab region has made significant progress in reaching poor and low income people. The overall trend for the industry continues to be positive despite recent regional and global crises.

The report draws on data from Microfinance Network of Arab Countries (Sanabel) as reported to MIX Market and the Annual Industry Survey. Findings include:

• Total outreach for all MFIs operating in the region as of December 2009 was 3,067,964 with a total Gross Loan Portfolio of US$1.59 billion;
• Demand remains high, with a conservative estimated outreach gap of 19 million borrowers;
• Portfolio quality remains high;
• Outreach is concentrated in Egypt and Morocco;
• Product offering remains limited in the Arab region;
• NGOs continue to represent the majority of MFIs in the region;
• Local banks provide almost 70 percent of the regions funding;
• Funding for portfolio expansion continues to be an obstacle to growth.

Key accomplishments of the sector include improved legal and regulatory clarity, greater professionalism and adherence to industry standards and establishing supervisory capacity of the banking sector to oversee the microfinance sector growth.