Paper

Benchmarking Microfinance in Romania 2008-2009

Assessing the impact of the financial crisis on microfinance sector

This benchmarking report for the Romanian microfinance industry determines the influence of the economic and financial crisis on the sector’s performance.

The financial and economic crisis changed the development trends recorded by the Romanian microfinance sector. Some effects of the crisis were:

  • Financial resources became limited and more expensive;
  • Number of clients decreased;
  • MFI clients in Romania are more linked to mainstream systems, and were, therefore, impacted by the crisis;
  • Commercialization strategy pursued by most MFIs led to increased debt to equity ratio and dependency on external financial resources;
  • MFIs with a medium portfolio were less affected by the crisis due to their moderate growth and consistent outreach strategy;
  • Good relationship with clients, adequate appraisal and monitoring procedures contributed to lowering the impact of the crisis;
  • MFIs with large portfolios were more affected due to their ambitious geographical growth and change in targeted beneficiaries.

The Romanian microfinance sector tested various coping strategies. Most successful ones were related to reconsideration of growth strategies, development of real partnership with investors, improved relationship with clients and communities, and introduction of new risk management techniques.

About this Publication

By Doiciu, M. & Bialus, D.
Published