The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
Drift in Global Microfinance Industry An Empirical Study
Dr. K. Chitra* & S. Sangeetha**
*Director, Department of Management Studies, Sri Ramakrishna Engineering College, Coimbatore, Tamilnadu, INDIA.
E-Mail: profkchitra@gmail.com
**Corresponding Author, Assistant Professor, KCT Business School, Saravanampatti, Coimbatore, Tamilnadu, INDIA.
E-Mail: sangisubramanian@gmail.com
Abstract—The growth and performance of microfinance sector in global perspective during the recent years
has shown distinctive differences among regions. With a view to capture the direction of movement of the
sector among the regions, a comparative analysis of the performance of the sector in regions like Africa, East
Asia & Pacific, Eastern Europe, Central Asia, Latin America, Caribbean, Middle East & North Africa and
South Asia is attempted in this paper. It focuses on loan loss rate, Portfolio at risk, cost factor, yield on gross
portfolio, return on assets and equity among varied countries. Mix Market Data for the period 2003-2010 has
been the source for this analysis.
Keywords—Loan Loss, Microfinance, Operating Expenses, Portfolio at Risk; JEL: B26; G21; G23; G32; N20;
N25; N26; N27
Abbreviations—East Asia & Pacific (EAP), Eastern Europe & Central Asia (EECA), Latin America & the
Caribbean (LAC), Micro Finance Institutions (MFI), Middle East & North Africa (MENA), Portfolio at Risk
(PaR), Return on Assets (RoA), Return of Equity (RoE), South Asia (SA)
T
I.
INTRODUCTION
HE economist Intelligence Unit had brought an edition
of Global Microscope on the MFI sector for the year
2011. The study covered 55 countries. The countries
had been ranked on the basis of various revised parameters
which were like overall microfinance business environment,
Regulatory framework and practices, Supporting institutional
framework and stability. The study findings concluded that in
the aftermath of the global financial crisis, microfinance has
begun to enter a more mature and sustainable growth phase
[James Clark, 2011]. After years of rapid expansion, the
focus has turned to accelerating the improvements already
underway in corporate governance, regulatory capacity and
risk management. Further, risk management, which has
become a post-crisis priority for all financial institutions, has
improved considerably in the microfinance sector, which is
essential, given that it is offering an increasingly diversified
range of innovative financial services to the poor. Efforts to
strengthen the sector have been stabilized, beside new
opportunities; microfinance is well positioned to take further
advantage of technological and market innovations and to
build on improvements already underway. This progress
stands in contrast to the financial crisis period and its
aftermath, which had a dampening impact on the sector by
exposing structural weaknesses, leading to a deterioration in
the quality of some loan portfolios.
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Troubling events over the past year highlight the
industry’s need to respond to new challenges and changing
local conditions. While microfinance continues to shift from
a niche product to a globally recognized form of finance,
regulatory and market gaps continue to impede the industry’s
ability to realize its potential. Data collection and
transparency have improved markedly from the early days of
microfinance, spurred by the notable efforts of microfinance
ratings agencies and organizations, such as the MIX Market
and Microfinance Transparency. But the varied product
offerings and market conditions globally imply a continuing
need for policymakers to adopt a more systematic and robust
way of evaluating the sector’s development, while remaining
attuned to the nuances of local markets [Venugopalan
Puhazhendhi, 2012]. Similar to earlier performance, Peru was
ranked first as the country with highest score followed by
Bolivia and Pakistan. India and Ghana which were in top 10
lists had an exit (Table 1). On the other end Uganda, Mexico
& Panama have made an entry to the top list. Under the
overall business category, Bangladesh – the land of
microfinance origin had been in 43rd rank and Vietnam finds
the last place.
This paper focuses on understanding the relative global
performance of Indian MFIs and intends to learn the varied
cost incurred by the MFIs, the Loan loss rate incurred by
them and also traces out the reasons for such losses.
© 2013 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
II.
REVIEWS OF LITERATURE
Ayi Gavriel Ayayi (2012) in his paper credit risk assessment
in the microfinance industry with reference to Vietnamese
microfinance institutions has discussed about the assessing
risk through conventional and specialised evaluation metrics.
The study identified that microfinance institutions could
sustain financial sound and good corporate governance
through the execution of risk management tools. It also stated
that the microfinance institutions’ invariably adopt the same
risk management techniques [Ayi Gavriel Ayayi, 2011;
Padma et al., 2012]. The researcher has used econometric
analysis to assess the credit risk. This study helps to
understand the importance of assessing credit risk and
enhances on the tools to adopt for assessing the credit risk.
Milford Bateman & Dean Sinkovic (2009): This paper
focuses on the negative impact of the neo liberal policy on
Croatia. It also speaks about the Grameen bank model in
promoting the standard of living in poor countries. But this
model has proved good; today it is facing a threat, which
demands for revision in development policy. In Croatia, the
micro finance institutions have seen an extraordinary growth
from 1999 upto 2006 [Maitreyee Gaikwad, 2006]. The firm
and household loans had excessive demand during the study
period. But it also describes the repayment tactics followed
by the companies are very aggressive during the last few
years of the study period, which made the poor to be even
poor. The neoliberal capitalism was dead and the one of the
consequence was microfinance. Hence this paper helped in
understanding the change in policies and in its negative ill
effects on micro funding.
K.O. Osotimehin, et al., (2011) in their study focused on
identifying the determinants of the outreach capabilities and
trends of microfinance institutions in Microfinance in south
western Nigeria. The econometric analysis has been
performed to understand the trend of outreach of
microfinance institutions. The model specifies that the
depository microfinance institutions exhibit 2 stage
production process, first FOP for mobilising savings and
secondly for institutions production process. The results of
the has shown that there had been increase in the outreach of
microfinance institutions in South western Nigeria which has
been driven by factors like effective lending rates, cost of
loans disbursed, average loan size and staff salary. The
researcher has found there is an existence of negative
correlation between real effective lending rates and outreach,
because higher lending rates will discourage borrowings and
have led to lower outreach.
III. OBJECTIVES AND METHODOLOGY
The study aimed to explore on the following aspects:
 To analyze the relative performance of Indian MFIs
in Global perspective.
 To analyse the loan loss rate among varied
countries.
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To analyze the yield on gross portfolio, the return on
assets and equity among varied countries.
 To analyze the operating, administrative cost
incurred in managing the loan portfolio and average
borrower among varied countries.
The study will enlighten on the trends in the global MFI
industry. The study assumes to be descriptive which explores
the trends of Global MFI industry. Secondary data has been
collected and comparative and trend analysis has been carried
out for analyzing the performance among varied regions.
Data of microfinance belonging to varied countries for a span
of 9 years (ie. 2003-2011) had been used for analysis.

IV. DISCUSSIONS
Table 1 – Ranking of Top 10 Countries in Microfinance in 2011
Rank
Country
Score
1.
Peru
67.8
2.
Bolivia
64.7
3.
Pakistan
62.8
4.
Kenya
60.3
5.
El Salvador
58.8
6.
Philippines
58.5
7.
Colombia
56.0
8.
Ecuador
55.1
9.
Uganda
53.7
10.
Mexico & Panama
53.6
The relative performance of Indian MFIs in the global
context has shown greater downfall during the last three years
which needs to be taken serious note while discussing the
issues on future perspectives.
Table 2 – Relative Performance of Indian MFIs in Global
Perspective
2009
2010
2011
Particulars
Score Rank Score Rank Score Rank
Overall MF
business
62.1
4
59.1
8
43.1
27
Environment
Regulatory
frame work
62.5
13
62.5
14
50.0
22
and Practices
Institutional
Development /
66.7
3
58.3
7
40.0
20
Supporting
framework
Investment
51.9
14
53.9
14
Climate
Stability
62.5
40
Source: Global microspore on the microfinance business
environment 2009-2011, Economic Intelligence unit Ltd
(www.eiu.com)
Pakistan, Philippines and Uganda shares first place in the
regulatory framework and practices. Trinidad and Tobago
had occupied the bottom of the list. Bolivia and Peru shares
first rank in Supporting Institutional framework followed by
Columbia and Armenia. Costa Rica has topped in the stability
© 2013 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
factor followed by Uruguay and Chile countries. As like in
the overall business category, in supporting Institutional
Framework, Vietnam has occupied the back seat.
Peru has been rated number one for the consecutive three
years. It had an excellent record of legal framework,
sophisticated regulators and government commitment which
purely focused on making unbanked bankable. Bolivia in
second place had better price transparency and disclosure
rules. Pakistan in the third place had separate legal
framework for microfinance banks and good networking. The
Kyrgyz Republic has stepped down from 12th position to 21st
rank globally. This is due to change in political regime which
halted regulatory overhaul. Latin America and the Caribbean
have the largest number of top performing countries in the
Global Microscope. The regions have eight of the countries in
the top global 12 countries. In addition the first two places are
occupied by its countries Peru and Bolivia respectively. This
had been possible as they very strong supporting institutional
framework category. But Latin American countries are not
very strong in regulatory framework and practices inspite of
eight countries are in the top list.
Arab countries had faced political unrest earlier this year
which seriously handicapped the functioning of the
Microfinance industry. Yemen is one of the most affected
countries which moved from best to worst category. It
stepped down from 27th rank to 44th place. This instability has
caused many MFIs to reduce their scale of operations. This
landed up in closure of banks too. Kenya is one of the
strongest and most stable countries in this region. Kenya is
placed in the fourth place and Uganda in the ninth place in
the global list. But Uganda places itself in the first place
globally in the regulatory framework and practices category.
Clients are benefitted with the active microfinance markets.
India has been pushed to 27th rank with a score of 43.1 in
the overall microfinance business environment. It possesses
22nd rank in regulatory framework and practices, 20th place in
supporting institutional framework and 40th rank in terms of
stability. The Government of India had strongly promoted the
Self-Help Group model through the National Rural
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
64.65
67.17
64.07
63.78
62.05
65.73
63.97
65.22
72.08
East Asia &
Pacific (EAP)
71.97
72.25
72.19
74.58
73.53
75.93
72.88
74.60
102.76
The Gross Loan Portfolio
The gross loan portfolio is very high in Latin America &
Caribbean (28,66,309). MENA ranks second with loan
portfolio of 23,02,788. Africa had less gross loan Portfolio
comparatively with other 5 regions, during 2003. But this
trend had found to be changing in the next year, where it
(Africa-9,01,087) could perform better than South Asia
(8,16,720).
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Table 3 – Gross Loan Portfolio
Gross Loan Portfolio
LAC
MENA
Market Leadership Position
2866309
2302788
LAC
3290834
3319529
MENA
3325504
4257163
4076073
3958660
4730981
4201610
4717270
3523469
LAC
6109115
4234538
8094382
5489360
128007902
16294574
The growth of Gross loan portfolio of LAC had
increased by 12,51,41,593 between the years 2003-11. The
gross loan portfolio to total assets had been 84.58% than the
previous year (2010).
Table 4 – Gross Loan Portfolio / Total Assets (%)
Gross Loan Portfolio / Total Assets (%)
Eastern Europe &
Latin America & the
Central Asia (EECA)
Caribbean (LAC)
82.61
78.28
85.00
79.90
84.01
79.77
86.82
80.15
87.30
80.97
87.56
80.45
81.70
79.39
84.24
81.13
76.14
84.58
Though the industry seems to have growth in Gross Loan
Portfolio/ Total Assets invariably for all the countries during
2011, the trend from 2003-11 is fluctuating. Except Eastern
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Livelihood Mission by offering cheap funding and also to
restrict market-based lending. A perception prevails that the
rapid growth had slow down by the local politicians’ ability
to use rural credit more.
In a study carried out by Microrate MIV survey 2011
[Luis A. Viada, 2011], Latin America and the Caribbean
(LAC) and Europe and Central Asia continue to account for
the majority of microfinance investments receiving a
combined total of 73% of all microfinance investment in
2010. JP Morgan’s CGAP Global Equity Valuation Survey
2012 has reported that LAC has more than half the
investment followed by Asia [Global Microfinance Equity
Valuation Survey, 2012]. India is the major contributor with
more than 92% of Asian’s investment levels.
Middle East & North
Africa (MENA)
71.69
67.06
74.98
79.05
76.85
75.21
76.75
79.29
80.57
South Asia
(SA)
74.41
77.32
76.22
78.62
78.03
77.23
77.34
82.01
-
Europe & Central Asia, Latin America and the Caribbean all
other countries had a dip during 2007. But Latin America and
the Caribbean had experienced a light fall in the subsequent
© 2013 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
year 2008 while regions like Africa, East Asia & pacific and
Eastern Europe & Central Asia were incrementally growing.
During the year 2011 a significant data of Eastern Asia &
Pacific makes the world to observe them, as it had 102.76%
from 74.6% comparatively with other regions.
The borrowings have reduced by 5.48% from
3,35,59,161 to 3,17,21,406 in Bhutan during 2009 & 2010.
The number of MFIs count decreased from 100 to 94 in India
and found to be common scenario in all other countries
except Pakistan.
Portfolio at Risk (90 days)
For the country like India PaR has reduced considerably
to 0.13% during 2007. Thereafter it seems to be inconsistent;
it is hiking year after year. During 2010 the PaR had been
0.64% from 0.16% the previous year. This sort of hike in PaR
has not been experienced by this industry earlier. It is also
evident that Bhutan being the leader the depositors, the loans
outstanding will be naturally high and the PaR seems to be
very high comparatively with other nations ie 11.7%. But the
land of microfinance origin is under promising side where
their PaR has come down to 4.47 % (2010) from 5.34%
Year
Africa
0.34
0.54
1.11
0.50
0.40
0.31
0.23
0.26
0.31
2003
2004
2005
2006
2007
2008
2009
2010
2011
East Asia &
Pacific
0.45
0.13
0.07
0.00
0.04
0.07
0.06
0.33
0.41
previous year. It is also noticeable that Nepal has the lowest
PaR with 0.63% (2010). The PaR weighted average 30 days
of India had been very alarming with 24.86% amounting to
Rs.3, 42, 76,696 loans outstanding out of gross loan portfolio
of Rs. 5,25,11,14,052.
The active borrowers in India (2010) is 3,17,09,335,
while in Bhutan it is just 24, 476. The deposit sum during the
year 2010 for India had been Rs. 30,07,60,871, whereas in
Bangladesh it is Rs. 2,17,12,20,435 which tops among all the
7 nations. The deposit sum is just Rs. 3,26,45,020 for Bhutan
whereas Srilanka has considerable deposits of Rs.
49,41,30,770 which is higher than India, inspite Srilanka
comparatively having less active borrowers (13,34,744).
The gross loan portfolio of India is considerably
increasing from the year 2006-10. ie. (46,15,10,391 to
5,25,11,14,052). Though Bhutan’s entry was from 2008, it
also has tasted the growth in its gross loan portfolio
((5,14,66,128 to 7,93,89,045 (2010)). The number of
depositors in India has increased in a large way. But it has
experienced an exponential increase during the 2010
(65,01,658) while considering the previous year (20,36,591).
Table 5 – Loan Loss Rate
Loan Loss Rate
Eastern Europe
Latin America & the
& Central Asia
Caribbean
0.27
0.85
0.07
0.65
0.00
0.62
0.04
0.56
0.00
0.58
0.00
0.95
0.06
1.05
0.19
1.19
1.83
Middle East &
North Africa
0.04
0.06
0.06
0.07
0.21
0.02
0.03
0.02
6.38
South Asia
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
The loan loss rate is found to be very high in MENA than other regions which accounts to 6.38% of the loan portfolio during
the year 2011. Inspite of having large loan portfolio LAC has only 1.83 % extent of loan loss rate which promotes additional
portfolio growth.
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
26.85
27.73
30.39
30.81
31.32
31.45
29.99
31.42
59.40
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Table 6 – Operating Expenses / Loan Portfolio
Operating Expenses / Loan Portfolio (%)
East Asia &
Eastern Europe
Latin America & the
Pacific
& Central Asia
Caribbean
29.44
20.67
22.85
21.76
18.11
22.88
23.90
16.73
22.14
23.28
17.19
20.48
19.96
14.89
19.02
20.35
14.30
22.23
20.04
14.89
19.76
18.97
16.10
21.42
22.71
01.34
14.09
Middle East &
North Africa
21.41
23.80
22.26
20.93
19.42
20.40
20.33
20.27
19.67
© 2013 | Published by The Standard International Journals (The SIJ)
South Asia
15.60
15.44
13.99
13.30
13.88
13.84
14.19
14.06
-
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
Year
Portfolio
2003
2004
2005
2006
2007
2008
2009
2010
2011
646614
901087
869392
937462
1578846
1955964
2463203
2929689
1754993
Table 7 – Operating Expenses / Total Assets (%)
Operating Expenses / Total Assets (%)
Africa
East Asia & Pacific
Operating Expenses Gross Loan Portfolio /
Operating Expenses /
Gross Loan Portfolio
Portfolio
/ Loan Portfolio (%)
Total Assets
Loan Portfolio (%)
/ Total Assets
26.85
15.31
965457
29.44
20.69
27.73
16.12
1124755
21.76
15.63
30.39
17.79
1325123
23.90
16.74
30.81
16.60
1520924
23.28
16.16
31.32
17.23
1767032
19.96
13.99
31.45
18.77
1948487
20.35
14.51
29.99
18.33
3673460
20.04
14.40
31.42
18.68
4418928
18.97
14.63
59.40
28.03
36128828
22.71
23.99
The operational expenses / portfolio had been comparatively very high for EAP (19.64%), though it has slightly decreased
from the previous year. East Asia & pacific had very high gross loan portfolio/ total assets during the year 2010. But the
operational expense/ portfolio was surprisingly low during 2010 for that region. But the very next year the operational expenses /
portfolio & operational expenses had been very high, as the portfolio size had a larger hike by 8.18 times.
The African region is facing upside down situations where the portfolio size has declined (2011), but the operating expenses
have nearly the double the times with reference to the previous years. The EECA had an effective control over its operating
expenses. It could manage its portfolio with just 1.34%, though the portfolio has expanded by 13.8 times.
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
20.96
25.18
19.76
19.61
21.73
16.41
22.10
22.56
-
Table 8 – Yield on Gross Portfolio (Real)
Yield on Gross Portfolio (Real) (%)
East Asia &
Eastern Europe
Latin America & the
Pacific
& Central Asia
Caribbean
36.71
30.90
26.07
28.12
26.48
27.42
28.50
22.09
25.75
23.35
21.22
25.11
24.57
17.92
25.30
19.13
15.20
21.80
26.19
21.23
25.21
24.05
22.67
24.83
18.55
-
Middle East &
North Africa
31.55
31.54
25.98
23.54
21.62
15.29
27.40
22.28
-
South Asia
20.60
15.49
13.83
15.04
13.89
10.46
14.73
13.34
-
It is notable that all the regions have experienced a downfall during the year 2009, largely due to the impact of economic
slowdown. Thereafter the scenario has improved the very next year (2010) to a large extent. LAC tops in the yield on gross loan
portfolio comparatively with 24.83% (2010). It is closely followed by regions like EECA, Africa & MENA. But EECA had
experienced a dip in yield during the year 2011.
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
-0.53
0.76
0.44
0.55
0.74
1.06
0.35
0.81
7.08
Table 9 – Return on Assets (Median) (%)
Return on Assets (Median) (%)
East Asia &
Eastern Europe &
Latin America & the
Pacific
Central Asia
Caribbean
3.31
3.60
3.70
3.03
3.50
3.61
2.59
3.19
3.20
3.12
3.29
3.22
2.76
3.20
2.92
2.85
2.83
2.24
2.19
1.34
1.46
2.83
2.34
1.60
8.93
4.60
1.87
Middle East &
North Africa
2.06
3.49
2.96
3.65
4.22
3.13
4.09
4.69
6.44
South Asia
0.68
0.83
1.25
0.87
0.77
1.00
1.11
1.47
-
The Return on Assets (RoA) of African region have shown as tremendous improvement from -0.53% (2003) to 7.08%
(2011), inspite of large fluctuation during the course of time. Similarly East Asia and Pacific have improved and tops in RoA
with 8.93% during the year 2011. Though LAC has higher gross loan portfolio, it has picked a very low RoA comparatively to
an extent of 1.87% (2011) though it has improved from the previous year. The RoA of LAC had not been attractive with respect
to the portfolio size it holds.
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© 2013 | Published by The Standard International Journals (The SIJ)
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
Year
Africa
2003
2004
2005
2006
2007
2008
2009
2010
2011
0.23
2.95
2.12
1.76
3.50
6.68
3.86
4.55
-10.6
2010
2011
4.46
26.85
Table 10 – Return on Equity (Median)
Return on Equity (Median) (%)
East Asia &
Eastern Europe
Latin America & the
Pacific
& Central Asia
Caribbean
10.06
9.82
12.62
15.64
10.43
12.62
12.82
18.65
11.61
16.07
20.77
12.36
14.27
16.51
11.66
13.42
14.64
8.82
11.22
3.80
6.26
11.98
7.85
6.94
42.55
22.97
12.14
Profit Margin
15.48
13.54
8.59
27.66
25.26
12.83
Middle East &
North Africa
2.38
4.87
10.00
18.01
19.56
6.27
10.62
8.23
9.40
23.61
17.83
South Asia
4.90
6.63
7.45
6.25
7.32
8.84
10.36
9.61
-
Though the return on assets (RoA) was very promising for African region RoE had found to be negative. But EAP, EECA
regions had good ROE of 42.55% & 22.97% which has exponentially grown from 11.98% & 7.85% respectively for the years
2010 & 11. LAC has also enjoyed increase in RoE from 6.94% to 12.14% for the years 2010 & 11.
Profit Margin
The profit margin had improved in a larger way to all regions except MENA which had steeply declined from 23.61% to 17.83%
during the years 2010 & 11.
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
924394
1751191
2575013
4080546
5548788
7114175
6291261
5035715
33867
Table 11 – Number of Loans Outstanding
Number of Loans Outstanding
East Asia &
Eastern Europe
Latin America &
Pacific
& Central Asia
the Caribbean
752436
275513
1825806
1056165
367794
4306171
1544024
1160416
6539412
7026395
1748260
10088166
8757888
2487778
13121763
11174803
3170175
14362030
14123042
2815314
15886925
16257342
2868191
16989423
632317
290892
30525592
Middle East &
North Africa
410301
593236
885741
1586393
2292119
2521780
2504037
2245047
28450
South Asia
6727748
9614728
20834249
27011352
35561112
44002404
54604003
61040324
-
The loans outstanding had been found to be very high for South Asia which had been consistently growing over the years.
Africa & MENA regions have tactically reduced their loans outstanding. The noticeable fact is that MENA have reduced
outstanding loans with less operating expenses.
Year
Africa
2003
2004
2005
2006
2007
2008
2009
2010
2011
183
183
241
255
284
280
266
196
6
East Asia &
Pacific
95
119
131
159
183
182
149
123
3
Table 12 – Number of MFIs
Number of MFIs
Eastern Europe
Latin America & the
& Central Asia
Caribbean
157
166
189
218
237
280
256
304
323
370
314
392
255
386
213
369
4
40
Middle East &
North Africa
31
38
42
49
59
68
70
64
2
South Asia
132
197
214
207
196
222
219
208
-
The number of MFIs has gone up for LAC, MENA & SA regions, while in other regions, it is observed to have larger
winding up of MFIs from 2007 onwards. This is crucial to understand, as the globe was experiencing recession during the same
session. But even the LAC, MENA & SA regions had tasted the bitter of closing down MFIs 2009 onwards.
ISSN: 2321 – 242X
© 2013 | Published by The Standard International Journals (The SIJ)
45
The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
Year
Africa
205
170
174
216
249
302
378
363
269
2003
2004
2005
2006
2007
2008
2009
2010
2011
Table 13 – Average Loan / Borrower
Average Loan / Borrower
East Asia &
Eastern Europe
Latin America & the
Pacific
& Central Asia
Caribbean
200
1091
514
156
1315
609
204
1083
641
245
1693
659
288
2222
746
317
2002
838
312
1788
917
305
1691
1050
123
1571
2629
Middle East &
North Africa
270
267
248
259
321
388
463
611
1151
South Asia
72
76
92
107
138
124
141
142
-
The average loan/ borrower had been reduced from 2009 onwards in Africa, EAP and EECA regions. Inversely LAC,
MENA & SA have increased the average loan / borrower in their regions during the same period. LAC has doubled the average
loan/ borrower between 2010 & 11; whereas the EAP has reduced by half during the same period.
Year
Africa
6.29
7.73
8.10
8.42
9.67
10.67
10.60
9.53
13.40
2003
2004
2005
2006
2007
2008
2009
2010
2011
Table 14 – Administrative Expenses / Total Assets
Administrative Expenses / Total Assets
East Asia &
Eastern Europe &
Latin America & the
Pacific
Central Asia
Caribbean
8.82
8.23
7.14
7.37
7.10
7.59
8.72
6.01
7.00
8.34
5.84
7.48
6.39
5.21
7.14
6.74
4.99
7.42
6.30
4.91
6.79
6.20
4.94
7.20
8.51
0.88
4.71
Middle East &
North Africa
5.55
5.97
6.42
5.30
4.98
4.88
5.01
5.30
5.91
South Asia
5.12
5.32
3.79
4.23
4.12
3.99
3.97
3.85
-
It is understood that EECA and LAC has taken measures to curtail the administrative expenses significantly inspite of
increase in portfolio size. The administrative expenses have drastically increased in African, EAP regions and have incrementally
increased in MENA during 2011.
Year
Africa
2003
2004
2005
2006
2007
2008
2009
2010
2011
44,48,059
57,05,409
75,54,102
91,91,585
1,16,96,536
1,71,37,730
2,05,72,668
1,70,60,833
57,975
Table 15 – Number of Depositors (Sum)
Number of Depositors (Sum)
East Asia &
Eastern Europe
Latin America &
Pacific
& Central Asia
the Caribbean
13,04,673
8,90,716
9,43,675
15,42,817
11,86,099
32,10,057
20,97,382
15,87,235
63,50,983
65,93,152
27,14,996
76,40,896
32,55,613
39,11,986
97,10,388
46,14,980
52,44,592
1,35,64,741
48,99,512
27,99,959
1,71,68,351
58,30,700
28,32,014
1,54,49,440
6,34,999
10,114
41,19,481
Middle East &
North Africa
6,886
5,539
13,589
87,664
81,397
97,489
63,748
89,552
0
South Asia
1,34,03,380
1,59,41,327
1,91,36,200
2,64,38,711
3,01,71,105
3,20,18,765
3,23,06,744
2,67,69,982
0
The number of depositors’ (sum) statistics shows an alarming picture throughout the world invariably. There had been huge
decline in the number of Depositors (sum).
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
26,06,07,065
52,05,64,877
85,97,01,224
1,34,28,72,904
3,25,76,11,106
4,00,24,07,301
5,28,21,32,767
4,88,27,93,790
94,20,885
East Asia and
the Pacific
3,30,75,49,344
10,57,19,602
3,96,67,65,831
5,34,71,92,014
6,01,01,40,130
6,15,99,25,668
8,44,20,68,436
11,77,51,31,989
3,64,35,971
Table 16 – Deposit (Sum)
Deposit (Sum)
Eastern Europe
Latin America and
and Central Asia
The Caribbean
13,10,88,591
75,74,81,525
3,53,98,226
2,21,84,87,228
1,24,80,03,627
5,04,44,25,869
2,24,06,02,281
6,79,95,66,116
5,04,03,90,748
8,71,83,52,564
6,16,45,05,179
10,00,99,71,646
5,23,56,99,452
13,35,25,83,689
6,42,28,31,882
15,26,39,26,637
2,80,64,933
7,25,14,12,544
Middle East and
North Africa
69,147
1,72,475
2,48,514
12,51,398
6,29,38,252
7,50,47,789
11,88,54,318
12,19,64,001
0
South Asia
17,35,93,793
22,38,44,342
65,95,07,361
89,78,61,876
1,18,93,12,415
1,99,85,11,287
2,54,50,11,110
3,29,98,39,062
0
As like the number of depositors, the Deposit sum also has declined unusually during 2011 than ever from 2003 onwards.
ISSN: 2321 – 242X
© 2013 | Published by The Standard International Journals (The SIJ)
46
The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
Table 17 – Number of Deposit Accounts (Sum)
Number of Deposit Accounts (Sum)
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
17,26,637
23,22,956
51,06,264
72,73,651
1,13,26,263
1,73,55,114
1,94,56,799
1,84,71,894
62,017
East Asia and
the Pacific
6,95,896
10,60,147
16,77,336
63,56,632
33,14,652
47,10,330
52,68,279
67,48,727
7,55,281
Eastern Europe and
Central Asia
91,284
68,487
16,71,455
26,64,091
39,25,301
53,61,769
54,65,615
59,62,453
11,307
Latin America & The
Caribbean
7,11,282
32,17,151
66,61,154
83,05,769
1,02,16,212
1,53,18,807
1,92,76,038
1,89,50,966
45,04,558
Middle East and
North Africa
6,886
754
12,752
59,940
81,973
1,03,735
75,749
89,552
0
South Asia
73,41,485
85,63,272
1,86,66,384
2,55,56,618
2,24,92,769
3,37,75,156
3,47,82,370
3,11,31,807
0
Large number of deposit accounts has been closed during the year 2011 in all the economies. But it has started earlier during
the year 2010 itself for economies like Africa, LAC and SA.
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
Africa
24,96,988
33,24,066
42,81,183
52,79,867
61,87,181
70,99,295
82,08,512
51,22,529
33,867
Table 18 – Number of Active Borrowers
Number of Active Borrowers
East Asia and the
Eastern Europe
Latin America and
Pacific
and Central Asia
The Caribbean
44,93,322
6,90,076
34,64,294
54,08,477
9,72,016
47,42,094
94,68,511
12,89,100
78,05,509
1,07,25,120
18,45,936
94,43,992
87,83,244
24,47,050
1,20,53,183
1,54,56,165
30,62,732
1,30,58,610
1,39,11,940
27,87,687
1,43,05,288
1,57,94,001
27,73,436
1,57,24,890
6,29,458
2,87,611
40,29,773
Middle East and
North Africa
5,07,120
8,03,425
12,41,019
17,36,626
22,55,182
24,84,605
25,00,362
22,15,603
28,450
South Asia
1,35,12,280
1,78,82,185
2,43,83,439
2,99,60,927
3,63,93,712
4,24,61,106
4,99,96,298
5,85,94,977
0
The decline in active borrowers has reflected in reduction in deposit too. Though LAC (2011) is comparatively good than
other regions, when compared with the yester years it had experienced a steep fall in its accounts.
Table 19 – Cost per Borrower
Cost per Borrower
Year
Africa
65
71
68
77
96
129
145
148
87
2003
2004
2005
2006
2007
2008
2009
2010
2011
East Asia and
the Pacific
43
36
42
51
58
66
63
61
26
Eastern Europe
and Central Asia
204
214
209
229
286
320
259
268
-
Latin America and
The Caribbean
124
120
144
146
146
177
175
199
357
Middle East and
North Africa
58
68
63
68
62
69
86
128
141
South Asia
11
12
11
12
16
17
18
19
0
Table 20 – Cost per Loan
Cost per Loan (Median)
Year
Africa
2004
2005
2006
2007
2008
2009
2010
2011
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71
77
87
100
127
132
132
0
East Asia and
the Pacific
32
37
57
65
68
61
61
26
Eastern Europe
and Central Asia
177
177
226
285
288
240
257
0
Latin America and
The Caribbean
137
126
132
140
164
169
189
339
Middle East and
North Africa
67
62
60
63
69
84
99
144
© 2013 | Published by The Standard International Journals (The SIJ)
South Asia
20
18
12
15
16
18
18
0
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The SIJ Transactions on Industrial, Financial & Business Management (IFBM), Vol. 1, No. 2, May-June 2013
The cost per borrower and cost per loan has inflated
twice for LAC during 2011, thrice while comparing it from
2003. MENA also has experienced the inflation in
maintaining a borrower. But African and AEP regions have
felt a dip due to large decline in their active borrowers. The
cost per loan has multiplied 1.5 times for MENA regions. The
EAP has declined during 2011 more than half the cost.
[7]
[8]
[9]
V.
CONCLUSION
The global scenario is not promising for the MFI industry as
such. Though some economies had booked portfolio, it is
found that they are struggling hard to manage their expenses.
State of the Microcredit Summit Campaign Report 2012 had
said that number of initiatives like values of responsibility,
corporate ethics and social performance management have
emerged to address the field’ challenges. MFIs have to adopt
new strategies to bring back their customers and as well
reduce their operating and administrative expenses.
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Dr. K. Chitra is the Director of Department
of Management Studies, Sri Ramakrishna
Engineering College, Coimbatore. Her
research domain is marketing. She has
published 25 articles and 3 books. She is a
Reviewer for 4 International Journal,
Member in Board of studies, Chairperson for
Conferences conducted in India and abroad,
Interacted with academicians in Singapore,
Malaysia and Newyork. She is a Member in All India Management
Association; Member in education & Industry Institution
Interaction, Panel of (CIII); Executive Committee member
Coimbatore Management Association (CMA); National Institution
of Personnel Management (NIPM); Management Teachers
Consortium (MTC).
S. Sangeetha has 10 years of experience to
her credit and specializes in Finance.
Currently she is pursuing her doctoral degree
in Management at Anna University, Chennai.
Her research domain is microfinance. She
received “Excellent grade” in the field study
viva voce. She is an alumnus of Indian
institute of Management, Kozhikode. She has
presented more than 19 empirical papers in
International and National Level Conferences in reputed institutes
like IIMA, IIMB and also has published papers in journals.
© 2013 | Published by The Standard International Journals (The SIJ)
48