Trends in Cross-Border Funding

This Brief describes global trends in microfinance funding between 2007 and 2010. It is based on a 2011 CGAP survey of the 20 largest microfinance funders, as well as previous surveys. The 20 largest microfinance funders surveyed represented over 85 percent of commitments reported in the previous survey year.

Microfinance funding is becoming more transparent. More than 60 microfinance funders regularly report information on their microfinance portfolio to CGAP. Survey findings indicate that:

• Cross-border funding continues to increase;
• Private and public microfinance funders grew at similar rates in 2010;
• Funders use diverse channels to support microfinance;
• Debt remains most used instrument, while equity investments and guarantees are increasing;
• Capacity building remains steady;
• Regional allocation of funding remains stable;
• Development finance institutions portfolios are highly concentrated.

The surveys reveal that cross-border funders remain committed to microfinance and financial inclusion more broadly. Funders see responsible finance as one of their main focus areas in financial inclusion for the next five years. Funders want to further play a role in moving beyond the credit-only model and in increasing outreach to still underserved markets.