Over the past few decades, public funding for microfinance has helped build an industry that now attracts private funding, both international and local. Today, a broad range of cross-border and local funders contribute to the sector, with a wide variety of approaches, funding instruments, know-how, and return expectations.
Knowing who is funding what, and where, can help funders see the gaps, and it helps improve accountability. Through its research, CGAP aims to improve transparency of microfinance funding, on the understanding that better information leads to better funding decisions and helps increase accountability among microfinance funders.
The core of our work on transparency is centered on the CGAP Microfinance Funder Survey. Conducted annually since 2008, this survey is the most comprehensive source of analysis on cross-border funding to microfinance. It focuses on primary sources of funding: institutions or individuals with ownership and decision-making power over the funds. Data is regularly reported by more than 60 major cross-border funders, both public and private, and it is complemented with data from the Symbiotics MIV Survey and CGAP estimates where indicated.
Based on results from the latest Funder Survey, CGAP estimates that microfinance commitments from cross-border funders have grown to reach at least US$24 billion as of December 2010. This estimate includes funding from public funders (DFIs, multilaterals, bilaterals) and private funders (foundations, institutional and individual investors). The 20 largest cross-border funders of microfinance committed US$14.7 billion as of December 2010. The bulk of cross-border funding (86%) is used for on-lending to retail institutions. The share of commitments dedicated to capacity building has remained at 14% over the last four years. Debt is the main instrument used by cross-border funders to fund microfinance. South Asia, Eastern Europe and Central Asia, and Latin America and the Caribbean remain the regions receiving the highest amounts of cross-border funding.