Banking Championship League

This paper is a report on the top MFIs in Latin America. The paper gauges the performance of the leaders on seven categories. These highlight:

• Scale of lending operations: Two commercial banks broke the 200,000 loan mark while Compartamos of Mexico and MilBanco of Peru surpassed the 100,000 benchmark;
• Depth of outreach: Village banking MFIs occupy first three places in outreach followed by larger institutions like Compartamos of Mexico and Credi Amigo of Brazil;
• Growth: Relative growth ratios favor institutions that start with a smaller base while large institutions grow more quickly in absolute terms;
• Savings: Savings have reached a new benchmark crossing US$100 million in deposits. The largest being Peruvian CMAC, mobilizing more than $50 million in deposits;
• Efficiency: Institutions with average loan balances of over US $500 spend less than 20 cents in a dollar in loan portfolio. Women’s World Banking (WWB) Popayan is the most efficient among non-regulated institutions;
• Asset quality: Gross loan portfolio is the MFIs most important asset accounting 70% of total assets on average. Portfolio at risk is higher among top 10 regulated institutions with leaders Compartamos and CMAC;
• Profitability: The profitability was measured on the basis of adjusted returns on assets (AROA) and adjusted returns on equity (AROE).

The paper concludes that Latin America’s microfinance pioneers show no signs of slowing, yet the younger institutions will increasingly give them a run for their money.