This paper is an overview of the microfinance services market in Russia
This paper aims to provide stakeholders in Russia with a consolidated qualitative and quantitative overview of the Russian microfinance services market and its dynamics. The paper:
Uses periodic market surveys that provide information on the current market situation and track changes in market capacity;
Provides a case-by-case analysis of key microfinance providers and builds their profiles;
Employs a uniform methodology, to compare different microfinance providers.
The key findings of the paper regarding the growth of microfinance in Russia between the years 2003 and 2004 are:
Microfinance is increasingly common in Russia and has become a part of the country's finance system, complementing conventional banking;
The overall growth of microfinance operations is estimated to be 1.3 - 1.8 fold;
The volume of credits to small and micro enterprises (SMEs) and the number of borrowers have increased by one-third;
Credit cooperatives were the fastest growing type of MFI;
MFI performance improved, making microfinance providers more efficient and financially sustainable - operational sustainability in a group of comparable MFIs grew by an average of 10%;
Microfinance portfolio quality was high;
Microloans were mostly made for business purposes and more than 80% of these were short-term loans;
MFIs built a client-base of 240-264 thousand.
The paper concludes that the developments in microfinance in Russia are consistent with the international trends of microfinance market evolution, where MFIs without membership seek investment and commercial debt to finance their microloan portfolios.