Research & Analysis

Apexes: An Important Source of Local Funding

Apexes are an important source of local funding for microfinance—and even more so since the global financial crisis. Well over US$2 billion per year of public money is being disbursed globally to microfinance through apex funds or local wholesale facilities. The funds are then disbursed by apexes to microfinance institutions (MFIs) mostly as subsidized loans, but occasionally as grants. The funding provided by apexes to MFIs is almost as much as the disbursements that donors and investors made to the entire microfinance sector in 2007, which was about US$2.5 billion. These large sums demonstrate the importance of apexes as vehicles to channel public money into microfinance.

In February 2009 CGAP completed a study to map apexes that identified 76 apexes around the world. Apexes are especially prevalent in Latin America and South Asia (69 percent and 29 percent, respectively, of total apex disbursements in 2007), and the number of apexes in Africa has increased significantly in the past five years, with eight apexes created between 2003 and 2008.

Data are available from 47 of these apexes, which disbursed US$1.8 billion in 2006 and US$2.3 billion in 2007. In 2007, the average amount disbursed among the largest 15 apexes was US$151 million each.

Most apex funds still in existence today were established in the 1990s and 2000s. PKSF, the well-known, large Bangladeshi wholesale fund, was launched in 1990. Since then there has been a steady stream of new funds, with 11 having been created in the last three years.