Benchmarking Arab Microfinance
This report focuses on the microfinance sector in the Arab world by attempting to answer the following questions:
- How has the sector performed in the region?
- What are its strengths and what drives these strengths?
- How has it evolved in comparison with other regions of the world?
- How does performance vary within the region?
The report studies and compares Arab microfinance institutions' (MFI) performance measures and their drivers in the global and regional context. It has the following sections:
- Scale and outreach;
- Financial structure;
- Profitability and sustainability;
- Revenues;
- Expenses;
- Efficiency and productivity;
- Portfolio quality;
- Comparative regional benchmarks.
Using data for from the 2003 results of 16 MFIs from six Arab countries, each section:
- Places the Arab MFI performance in the spectrum of global industry results by region;
- Then explores the relative diversity within the young, but rapidly growing regional industry;.
- Analyzes the varying performance of Arab institutions by scale, charter type and financial self sufficiency.
The final section makes the following observations:
- Arab microfinance is growing at a pace that is much faster than that in other regions;
- Operations earn it returns that exceed global averages;
- Arab microfinance has crossed the threshold of sustainability.
The report concludes by emphasizing the need to reinforce organizational structure of medium scale MFIs in order to create a more diverse institutional landscape. It thrusts the needs for regulatory changes that could give high performing institutions more flexibility to extend their product offerings and take microfinance closer to the local financial systems.
