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Microfinance Market Report for Latin America and the Caribbean 2010

Analyzing the microfinance market in Latin America and the Caribbean
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This report analyzes performance of the microfinance industry in Latin America and the Caribbean (LAC) for 2010. It examines financial and social performance data from MFIs in the region.

The report states that microfinance in LAC showed signs of recovery in 2009 with an improvement of 24 percent in cumulative credit portfolio over the previous year. Trends in the LAC microfinance market include:

  • More credit to fewer clients;
  • Slowdown in funding through indebtedness;
  • Progressive difficulty in credit recovery;
  • Poor returns for MFIs due to low incomes;
  • Increasing recognition of social performance management by MFIs;
  • Considerable progress in integrating social component into MFI operations;
  • Challenges in terms of tracking outreach indicators and improving depth of outreach.

The report examines the phenomenon of cross-indebtedness using data from Ecuadorian MFIs. It presents updated projections for portfolio growth in 2010. The report recommends that MFIs reinforce policies and operations for improving communication with clients. It states that governing bodies should be involved in training and assessment of social performance management of MFIs.