Donors and Investors Overview
There are large disparities between different microfinance markets in the MENA region. While microfinance is very developed in Morocco, Egypt and Jordan, other markets are small but emerging (e.g. Yemen, Syria, Tunisia) and some countries have barely any microfinance activities at all (Algeria, Libya). In the MENA region in general, there is low market penetration (15-20%), and there are only few MFIs (72 are reporting to the MIX) with an average age of 10 years.
Accordingly, funding patterns are heterogeneous. The largest markets, Morocco and Egypt, receive 60% of cross-border funding committed to the MENA region, a lower share than in the previous year. While commitments to Morocco and Egypt decreased, commitments to Iraq and Syria increased in 2009 and remained stable in the other countries of the region.
Out of 61 funders that participated in the CGAP Microfinance Funder Survey 21 public funders (bilateral and multilateral agencies and development finance institutions), 8 foundations/NGOs and 16 Microfinance Investment Intermediaries (MIIs) reported activities in MENA. Taken together, they had $787 million committed to microfinance in MENA as of December 2009. These commitments represent around 4% of total global commitments, in line with the 3% that the region represents of the global microfinance loan portfolio.
Commitments reported to the CGAP Funder Survey increased by 4% in the MENA region, compared to a decrease in the previous year. Public funders provide 87% of total commitments. Private funders (foundations, institutional investors and individual investors) account for 13%. However, private funding grew by 80% in 2009 (compared to 33% globally), while public funding decreased by -1% (compared to a 12% increase globally), mostly because of a decline in AfDB’s portfolio in MENA.
The Top 5 funders in MENA represent 46% of total funding to the region: AECID, AFD Proparco, IFAD, KfW, EC. Several countries are introducing new legal frameworks to strengthen local microfinance sectors which might attract new funders to the region. At a recent roundtable organized by CGAP, funders identified capacity building to help institutions grow and diversify as their priorities in the MENA region.
For more information on funders’ activities in the MENA region, see CGAP’s MENA Updates.
Top Five Funders in MENA
| |
Percentage of Total Funding Committed |
| AECID |
13% |
| AFD Proparco |
11% |
| IFAD |
8% |
| KfW |
7% |
| EC |
7% |
| All 5 |
46% |
Source: 2010 Cross-border Funding Survey
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