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Short Final FInancieros Sin Fronteras-1
Short Final FInancieros Sin Fronteras-1
AGENDA
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3 4
7 3 6 5 1 22
Young sector within the global industry Average loan amount double than world average Financing micro and SMEs more than micro-entrepreneurs and low income families More integrated in formal financial markets Credit risk Lowest delinquency levels globally prior to the crisis Portfolio at risk spiked in 2008 in environments of rising unemployment, high inflation, and over-indebtedness Currency risk High currency risk (most funding in hard currency and most lending in local currencies) Volatile currencies during the crisis
N of clients
15 553
6 040
13 463
21 974
21 974
% women 62.9%
Portfolio (million USD) Avg loan amount Avg loan amount /GDP per capita 5 347
59.5%
4 454
68.1%
3 339
71.2%
4 912
61.3%
8 559
70%
5 273
532
926
286
195
816
228
54%
79.7%
15.8%
35.9%
57.4%
69%
How has the crisis affected the microfinance sector in Eastern Europe and Central Asia?
Funding Over indebtedness Currency risk Lack of access to funding Increased demand for working capital vs. investment Smaller loan amounts and shorter terms
Funding
Problems to access it Increased cost Increased currency risk
Profitability
Profitability decreased drastically Increased cost of provisions and of funding Not always possible to pass the increased costs to clients
5.000
4.000
EUR mln
3.000
2.000
1.000
Portfolio (Volume)
What are the main risks for microfinance failure that should be avoided? How can this be done?
Deposit mobilization Guarantees / back-to-back loans with local banks Working with microfinance funds that offer local currency funding solutions
External support to strengthen the sector: International Financial Institution's response to the crisis
Institutional support
Transformations Consolidations Restructuring
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Thanks.