Prospects for Investment in South Asian Microfinance 2010

This publication by The South Asian Microfinance Network (SAMN) examines the economy, financial sector, microfinance sector, and investment options in six countries of South-east Asia, namely Afghanistan, Bangladesh, India, Nepal, Pakistan and Sri Lanka. It sketches the poverty context, extent of financial exclusion, microfinance market, and legal framework for investment in each of the countries covered.

The publication targets potential investors and stakeholders interested in knowing about microfinance in South Asia, and in making cross-country comparisons. It highlights the limited outreach of the formal financial sector and the need and market opportunity for microfinance services in each of these countries. The microfinance sector has grown rapidly in the past few years, but still fails to meet the supply gap of financial services, both qualitatively and quantitatively. South Asian microfinance providers reach approximately 50 million clients in the region. They have a limited product range and mostly offer small size groups loans to women. This implies a large untapped market in terms of clients, and financial products and services. Key challenges include:

• Limited and skewed outreach;
• Limited pool of MFIs;
• Financing gaps.