Eastern Europe and Central Asia
The regional microfinance is highly heterogeneous: the Balkans are characterized by a mature microcredit sector where historically microfinance has been developing through large, credit-only NGO MFIs (e.g. in Bosnia and Herzegovina). The Central and Eastern European countries and Russia have large credit union movements (e.g. Poland, Ukraine, Russia); in recent times Russia has also seen growth in the number of credit-only MFIs. Both credit unions and the new entrants in the Russian microfinance market primarily issue consumer microloans. The markets in the Caucasus and Central Asia are younger and still growing; Azerbaijan and Kyrgyzstan have the largest microfinance-dedicated non-bank sectors, while in Armenia, Azerbaijan and Mongolia large banks have a significant market share. Throughout the region, some iconic microcredit markets (such as Bosnia and Herzegovina, Azerbaijan, and Kyrgyzstan) have shown evidence of market saturation, with cross borrowing rising sharply, widespread delinquency challenges and concerns over client over-indebtedness. These challenges have been exacerbated by the absence of comprehensive base-of-the-pyramid credit reporting throughout the region (except recently in Bosnia and Herzegovina).
Financial Inclusion Data: Europe & Central Asia
CGAP’s work in Eastern Europe and Central Asia is primarily focused on deepening relationships with regulatory authorities, policymakers, and the funding community in the region in order to build policy environments that balance financial access, financial stability, and the protection of customers, as well as facilitate responsible investment.
We gather data and conduct analysis on cross-border funding flows going to microfinance in the region. We also collaborate with two key regional microfinance associations – the Microfinance Center for Central and Eastern Europe and the New Independent States (MFC) in Poland and the Russian Microfinance Center (RMC) in Russia. Together with MFC and RMC, we disseminate various CGAP publications to policymakers, donors, investors, and other stakeholders and we translate key publications into Russian.