Bringing the "Forgotten Half" of Microfinance into Focus

This paper takes a closer look at the developments in deposit mobilization within the microfinance sector. More specifically, it aims to answer questions such as how much of saving is coming from the traditional microfinance segment versus the institutional or high net worth individuals and how important are deposits becoming in the funding plans of these institutions.The paper is based on data collected from six microfinance banks: First Microfinance Bank (FMFB), Kashf Microfinance Bank (KMFB), Khushhali Bank Limited (KBL), NRSP Microfinance Bank (NRSP-B), Pak-Oman Microfinance Bank (POMFB), and Tameer Microfinance Bank (TMFB). Findings include:

• Total deposits of MFBs rose from PKR 3.4 billion in June 2008 to PKR 28 billion by end of June, 2013. In the same period the number of depositors has increased to 1.7 million from ten thousand in 2003;
• Around 99% of the accounts holders are individuals but only account for 42% of the total deposits with the rest being made up by institutional deposits;
• At present, majority of the deposit accounts are either current accounts or savings accounts (CASA);
• Fixed accounts make up only 2% of the total accounts but constitute 27% of the deposit base.