Overview of the Microfinance Industry in the ECA Region in 2003

This paper summarizes the results of research carried out among MFIs in the areas of Central and Eastern Europe and the Commonwealth of Independent States, with the goal of quantifying the growth of MFIs in this area.

The objective of this research was to study the state of the microfinance sector at the end of 2003 among different institutional models credit unions, non-government organization (NGO) MFIs, downscaling commercial banks, and microfinance banks that operate in the following five sub regions:

• The Balkans;
• Central and Eastern Europe (CEE);
• The Caucasus;
• Central Asia;
• Russia/Ukraine/Belarus.

The paper studies the size of the sector in terms of:

• The volume of loans and the number of clients served;
• Types of products offered;
• Operating environment;
• New developments on an organizational level;
• Institutional performance;
• Funding issues.

Some findings of the study are listed below:

• At the end of 2003, 6,000 MFIs operated in the region managing a gross loan portfolio of US $2 billion;
• The biggest share was managed by credit unions (37%), followed by microfinance banks (35%);
• The biggest growth of both the portfolio and borrower numbers was in the Balkans;
• For NGO MFIs, the average operational self-sufficiency was 117%;
• The largest concentration of such MFIs was in Russia/Ukraine/Belarus;
• Loan officers of different types of institutions had varying workloads, with NGO MFIs emerging as the most productive of all institutions.