Microfinance funding in 2008 grew by 24%: CGAP survey

By Matthew Fuchs

Microfinance Focus, Nov. 4, 2009: Commitments from donors and investors to microfinance increased by 24% in 2008 to $14.8 billion, according to the CGAP 2009 Microfinance Funder Survey released last week. A further $3 billion was disbursed, two-thirds  from investors.

South Asia attracted 25% of commitments, the largest share of any region, with $3.65 million. This was an increase of 14% for the year 2007-08. East Asia and the Pacific saw the largest growth, increasing 33% to $1.1 billion but only representing 7% of commitments. Eastern Europe and Central Asia, Latin America and Caribbean and multi-region funds also saw strong growth. In contrast, Middle East and North Africa declined by 5% to $717 million, representing 5% of commitments globally.

Commitments by type of funder varied considerably across regions. For example, 85% of commitments to South Asia were from donors, compared to Eastern Europe and Central Asia where investors contributed 88% of commitments. Globally, however, contributions from donors and investors were roughly equal, at 52% and 48% respectively.
Commitments by instrument type also varied considerably between regions. For example, 81% of commitments to South Asia consisted of debt, compared to 63% for all commitments globally. Eastern Europe and Central Asia attracted the largest share of equity investments with 17%, while grants comprised 42% of commitments to Sub-Sahara Africa. This is far greater then the global share of grants, representing only 17% of all commitments.

Development Finance Institutions (DFIs) and Multilateral Agencies dominated the top five funders’ list. The largest contributor was KfW, providing 13% of total committed funds, followed by the Asian Development Bank at 12%, World Bank 10%, European Bank for Reconstruction and Development 6%, and the International Finance Corporation 5%.
The 2009 Microfinance Funder Survey is the second annual survey released by the Consultation Group to Assist the Poor (CGAP).

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