2012 Transversal Analysis of MFI Performance in Africa: Fourth Edition

This edition of Transversal Analysis tracks the development and progress of rated African MFIs in order to identify performance trends and challenges. The African Microfinance Transparency forum (AMT) commissioned this study as an update to the 2010 Transversal Analysis. It covers 44 MFIs in 15 countries including both AMT members and non-members across a 4 year period from 2007 to 2010.The analysis was conducted by three rating agencies, namely, MicroRate, Microfinanza Rating, and Planet Rating with the conclusion provided by M-Cril. There are many positive trends in operational and financial performance during 2010 as compared with 2007, but there is still considerable room for improvement. Findings include:

• Around 36% of MFIs have average outstanding portfolio above USD 8 million;
• Size and methodology influence portfolio quality, with small and medium MFIs, and MFIs using both group and individual lending having higher PAR;
• Risk coverage remains low;
• Profitability is positive in 2010;
• Legal structure influences funding structure, with banks and cooperatives exhibiting the best leverage;
• Predominance of international investors and lack of local bank funding remains a challenge;
• Staff productivity has improved over the three year period.