Number of Borrowers
MFIs have long seen microfinance only as microcredit. There have been several attempts to count the number of poor borrowers that are being reached by microfinance providers. These studies differ in several respects, such as the types of institutions they cover and the methodology they use for counting their clients.
CGAP’s Occasional Paper No. 8 identified four times as many loans as savings accounts and approximately 150m active loans in Alternative Financial Institutions, i.e. financial institutions that not only have a financial, but also a social, bottom line (see Figure 1). Of these loans, slightly less than two thirds were counted in China and India, where there has been a heavy, if not always efficient, government commitment to extension of financial services. Based on a series of assumptions about the potential market size that could be served by these institutions, the paper concludes that the majority of the world’s poor still remain unserved.
A subsequent study that was commissioned by the World Savings Bank Institute (WSBI) counted 190m loan accounts worldwide (see Figure 2). It is based on the methodology of the CGAP study described above, but extends the scope of institutions by adding savings banks, which also explains the higher estimate.
A different methodology was chosen by the The Microcredit Summit’s (MCS) 2007 Annual Report. It is based on a sample of around 3,300 MFIs from which it receives annual data on the number of their clients. This makes it hard to compare to any of the above mentioned studies. According to the latest numbers, 133m clients are reached, 93m of which qualify as “poorest” (see Figure 3). Almost 90 percent of those are reached by only 67 institutions (2% of all MFIs).
There is one clear message from all of the above: the worldwide number of poor people that have access to credit is nowhere near the market potential. Given that almost 3bn people live on less than two dollars a day, clearly the battle to bring financial access to as many people as possible is a very long way from being won.
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