Results of the 2008 Microfinance Funder Survey

As the microfinance funding landscape has become increasingly diverse and complex, the need for quality information on funder activity has intensified. As part of its mission to improve the availability and quality of information on funding flows to microfinance, CGAP has completed the first survey of major cross-border funding for microfinance. This survey brings together quality information on the microfinance portfolios of leading donors and investors and will help the industry understand where money for microfinance comes from, how is it used, and where it goes.

“For the first time, we are able to more fully understand how funders are spending their money,” says CGAP Executive Director Elizabeth Littlefield. “This is an important development as we strive to further improve transparency and the impact of funder commitments and, ultimately, to ensure funding goes to where it is most needed.”

The 54 funders included in this survey committed $11.7 billion to microfinance, of which $2.5 billion was disbursed in 2007. The six largest funders—AsDB, KfW, World Bank, IFAD, IFC, and EBRD—contributed more than 50 percent of the overall funding.

Other Key Highlights

East Europe and Central Asia and South Asia combined receive close to 50 percent of the overall funding, but from different funding sources. In South Asia, multilateral donors provide most of the funding, with India and Pakistan receiving the lion’s share of the total funding going to the region. Conversely, in East Europe and Central Asia, 85 percent of the funding comes from investors, mostly development finance institutions.
The main funding instruments are debt, equity, loan guarantees, and grants. Debt is the most widely used instrument (63 percent), equally used by donors and investors.
As the backbone of the financial sector, the retail level received the majority of funding (close to 70 percent), followed by funding to support the financial market infrastructure level (around 30 percent) and the policy, regulatory, and supervisory environment level (around 3 percent).
The 16 development finance institutions included in the survey significantly increased their outstanding portfolio, for a total of $4.1 billion as of December 2007. This represents a high growth rate from $1.7 billion in 2005.