Sustainable Banking with the Poor: A Worldwide Inventory of Microfinance Institutions

Leading microfinance institutions around the world and their institutional characteristics
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This document provides an overview of the leading microfinance institutions (MFIs) around the world, their outreach and growth, deposit mobilization strategies and institutional characteristics.

The paper discusses the processes that it followed and the inherent flaws in the methodology of information collection. It states that despite all the inaccuracies, this document provides basic information about these organizations and provides a foundation for cross-regional and cross-institutional analyses that, in turn, can shed light on the achievements and obstacles faced in a variety of environments.

The document highlights some of the following salient points of the study:

  • Wide range of accounting practices are used by the responding institutions, and as a result, the aggregate results of cost related ratios are skewed;
  • Many institutions lack the ability to answer very basic financial questions in a reliable manner;
  • There is an increased growth rate in the loan portfolio of the participating institutions, reflecting the general buoyancy in the microfinance sector;
  • A vast majority of new institutions are NGOs, while the older ones are largely credit unions and savings banks. Also the majority of deposits are mobilized by older institutions;
  • Female-based organizations are mostly supported by NGOs, are younger, smaller and have high loan repayment rates as compared to the male-based organizations.

Finally, the paper concludes that the balance of favorable macro-economic conditions, managed growth, deposit mobilization and cost control are among the key factors that have contributed to the success and sustainability of several MFIs.

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