Global Microfinance Industry

Global Microfinance Industry

  • April 2021 •
  • 337 pages •
  • Report ID: 5799111 •
  • Format: PDF
Abstract:
- The global market for Microfinance is projected to reach US$313.7 billion by 2025, driven by the rising inequality in wealth distribution and the resulting increase in the number of unbanked people. The wealth divide between the billionaires and bottom 50% of humanity is continuing to increase. Number of billionaires’ wealth needed to equal the wealth of the bottom 50% of the world population has fallen from 210 in the year 2010 to just 25 in the year 2019. This indicates increasing concentration of wealth in the hands a few high-net-worth individuals. Under this scenario, a massive % of population lives below the "International Poverty Line". Micro financing is one of the ways to pull people out of extreme poverty. The world’s poorest countries are the top markets for microfinance initiatives. Micro financing provides access to microloans to low-income and poverty-stricken households who are not served by traditional financial systems. In contrast to conventional banks that do not provide loans to people with no or insufficient assets and do not offer microloans, microfinance makes it possible for these individuals to access the loan. By 2014, microfinance operations directly benefitted over 130 million people. In addition, over 500 million individuals have been directly and indirectly benefitted from such operations. The access to even a small credit holds potential to end the cycle of poverty by offering opportunities like business, job and education. Families with access to micro financing are unlikely to discontinue education of their children owing to economic reasons. In addition, microfinance allows clients to start small businesses, which create new jobs. Microfinance promotes economic development, growth and employment by supporting small businesses and micro-entrepreneurs. Apart from improving living standards of impoverished communities, the concept helps poor in efficiently managing their finances, leveraging economic opportunities and managing risks. Moreover, microfinance operations empower women and may result in more prosperity and stability in families. On the other hand, micro financing is available to just 20% of the 3 billion individuals who qualify as poor.
- The global microfinance market is led by banking institutions that are estimated to retain their prime position in the coming years. While banks are anticipated to benefit from their low interest rates, their reluctance to provide loans to SMEs is expected to propel the non-banking sector. The latter segment is bound to also gain from increasing focus on non-bank financial resources like mutual funds. By end-user, the services segment is estimated to post impressive gains on the basis of loans granted. The microfinance market is anticipated to also receive strong contribution from the household and agriculture sectors. Asia-Pacific is projected to make a notable value contribution to the global microfinance market. The regional market is likely to receive a strong impetus from India along with China, South Korea, Hong Kong, Mongolia, Macau, Taiwan and Japan. The Asia-Pacific market is anticipated to gain from the confluence of a number of positive factors such as rapid industrialization, strong demand for goods & services, and rising consumer awareness. In addition, the emergence of various Islamic financial services and banks coupled with the issuance of Sukuk is expected to further augment the market growth in the coming years. South Asia is recognized as the leading market for microfinance worldwide, in terms of number of borrowers. An important feature of microfinance market in South Asia is that a dominant share of borrowers is made up of women. Though the region holds the leading share of global borrower numbers, South Asia is ranked second in terms of credit portfolio. Within South Asia, India accounts for a significantly high share of the overall borrowers. India remains a highly promising microfinance market with high growth recorded in terms of borrowers and loan portfolio.

- Select Competitors (Total 93 Featured) -
  • 51Give (China)
  • Al Amana Microfinance
  • Al-Barakah Microfinance Bank
  • Annapurna Finance (P) Ltd
  • Asirvad Microfinance Pvt. Ltd.
  • Banco do Nordeste do Brasil S.A.
  • Bandhan Financial Services Pvt. Ltd.
  • Bank Rakyat Indonesia
  • BRAC
  • BSS Microfinance Ltd.
  • Grameen Foundation
  • Jamii Bora Bank
  • Kiva