2010 Funder Survey Highlights MENA Nov 5
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Transcript of 2010 Funder Survey Highlights MENA Nov 5
Cross-Border Funding for Microfinance
Middle East and North Africa
Results of the CGAP Cross-border Funding Surveys 2010
About the surveys
The CGAP surveys focus on cross-border funding for microfinance.
Over 150 institutions and funds have participated in CGAP’s 2010 surveys on microfinance funding, representing 85 to 95% of the total estimated cross-border funding to microfinance.
CGAP collects data from major funders (bilateral and multilateral agencies, development finance institutions, foundations) and from microfinance investment intermediaries (MIIs) such as Microfinance Investment Vehicles (MIVs) and holdings.
All data is as of December 2009.
For any questions or data requests please contact Barbara Gähwiler at [email protected].
At a Glance
21 Public Donors and Investors
(Multilaterals, Bilaterals, DFIs)
$0.7 billion
Private Donors and Investors
(Foundations, Institutional and Retail Investors)
$0.1 billion
Microfinance(Support for microfinance at all levels of the financial system: retail, market infrastructure, and policy)
16 Microfinance Investment
Intermediaries (MIIs)
Commitments to Microfinance for MENA as of December 2009: $0.8 billion*
* CGAP surveys capture 85 to 95% of the total cross border funding to microfinance
$0.67 bln
Ap
exes
$0.07 bln $0.03 bln
$0.08 bln
Ap
exes
$0.03 bln
Slow growth in commitments
• $787 million committed to MENA as of 2009, representing 4% of total cross-border funding to microfinance.
• Slow growth in commitments, with a rate of 4% compared to 17% globally.
• 21 public funders (bilateral and multilateral agencies and development finance institutions - DFIs), 8 foundations/NGOs and 16 Microfinance Investment Intermediaries (MIIs) are active in MENA.
• MENA is the region with the lowest number of private funders and intermediaries.
21,313 (100%)
1,546 (7%)
6,188 (29%)4,724 (22%)
787 (4%)
4,064 (19%)
2,544 (12%)1,461 (7%)
Total East Asia & the Pacific
(EAP)
Eastern Europe & Central Asia
(ECA)
Latin America & the Caribbean
(LAC)
Middle East& North Africa
(MENA)
South Asia (SA)
Sub-Saharan Africa (SSA)
Multi-Region
Committed Amount (million USD)+17%
+4%
+21%+22%
+19% +38%+22%
+1%
Number of respondents: 61 and CGAP estimates based on 90 MIVs
AnnualGrowth Rates for 2008 to 2009
Public funding dominant, but private funding growing faster
• Public funders provide 87% of total commitments (compared to 69% globally). Private funders (foundations, institutional investors and individual investors) account for 13%.
• However, private funding grew by 80% in 2009 (compared to 33% globally), while public funding decreased by -1% (compared to a 12% increase globally), mostly because of a strong decline in AfDB’s portfolio in MENA.
• The Top 5 funders in MENA represent 46% of total funding to the region: AECID, AFD Proparco, IFAD, KfW, EC.
69%63%
68%
54%
87% 84%75%
60%
31% 37% 32%46%
13% 16%25%
40%
Total EAP ECA LAC MENA SA SSA Multi-Region
Commitments by Type of Funder
Public Funders Private FundersNumber of respondents: 61 and CGAP estimates based on 90 MIVs
Strong increase in commitments for capacity building
• 84% of commitments to MENA are used to refinance retail financial service providers, directly or indirectly, compared to 88% globally. Morocco and Egypt receive 80% of these funds.
• $128 million are committed to capacity building in MENA. 80% of these funds are used to strengthen retail service providers; 20% are used at the market infrastructure and policy levels. Morocco and Iraq receive more than 40% of capacity building funds to MENA.
• Funding for on-lending remains stable in 2009 compared to 2008, while funding for capacity building increased by 36% - half of this increase is due to Iraq.
88%83%
99%91%
84%88%
67%76%
12% 17%
1%9% 16% 12% 33% 24%
Total EAP ECA LAC MENA SA SSA Multi-Region
Commitments by Purpose
Onlending Capacity Building
Number of respondents: 58 and CGAP estimates based on 90 MIVs
Debt is the main instrument, but guarantees are more widely used than in other regions
• 68% is provided by funders directly or channeled through local governments, compared to 45% globally; the remaining 32% are channeled via intermediaries such as MIIs.
• While debt remains the main financial instrument used by funders, guarantees represent 12% of direct commitments compared to less than 5% in other regions (58% of guarantees are focused on Morocco).
• Equity investments are limited to a small number of organizations such as First Microfinance Institution Syria and JAIDA in Morocco, due to regulatory constraints in many countries in the region.
66%
5%
21%
4%4%
Direct Funding by Instrument (TOTAL)
Other
Guarantee
Grant
Equity
Debt
45%55%
Commitments by Type of Funding (TOTAL)
Direct Indirect
58%
2%
28%
12%
Direct Funding by Instrument (MENA)
Guarantee
Grant
Equity
Debt
68%32%
Commitments by Type of Funding (MENA)
Direct Indirect
Number of respondents: 58 and CGAP estimates based on 90 MIVs
Morocco and Egypt receive more than 60% of funding to MENA
• Funders are active in 12 countries in MENA.
• In 2008 and in 2009, Morocco and Egypt received most of the funding, although their share decreased; in 2009, they still represent at least 60% of total commitments to MENA. Commitments to Iraq and Syria increased in 2009 while commitments to Morocco and Egypt decreased.
Commitments by Country as of Dec. 2009, and 2008/2009 TrendCountry allocation is available for 88% of MENA commitments
2009 Commitments
2008/2009 Growth
Algeria $2 to 50 mln →Djibouti $2 to 50 mln →Egypt $100 to 300 mln ↓↓Iran <$2 mln →Iraq $2 to 50 mln ↑Jordan $2 to 50 mln →Lebanon $2 to 50 mln →Morocco $300 to 500 mln ↓Syrian Arab Republic $2 to 50 mln ↑Tunisia $2 to 50 mln →West Bank and Gaza $2 to 50 mln →Yemen $2 to 50 mln →
$2 to 50 mln
<$2 mln
$101 to 300 mln
$301 to 500 mln↑↑ increases, more than 20 mln
↑ increases, 5 to 20 mln
→ same or change less than 5 mln
↓ decreases, 5 to 20 mln
↓↓ decreases, more than 20 mln
Country breakdown is available only for direct funding
Active Funders in MENA
Active Funders in MENA
Multilateral & UN Agencies Foundations & NGOs Microfinance Investment Intermediaries (MIIs)
AfDB Citi Foundation Accion AIMEC Cordaid Consorzio EtimosIFAD Gates Foundation DBMDFWorld Bank Grameen Foundation DMCF
Grameen Jameel EMFDevelopment Finance Mastercard Foundation FinethicInstitutions (DFIs) Omydiar Network Hivos-TriodosAECID Oxfam Novib IncofinAFD Proparco JAIDABIO Bilateral Agencies OikocreditDCA USAID CIDA Planet MicroFundEIB GTZ respA GMFFinnfund Italy MoFA respA MFFMO JICA SIDIIFC MCC Wallberg GMFKfW Netherlands MoFA XXEBOPIC USAID
AECID 13%AFD Proparco 11%
IFAD 8%KfW 7%EC 7%
Top 5 Funders in MENA% of Commitments to MENA
Method and Definitions
• Method: Figures are based on data reported by 61 funders and 90 microfinance investment intermediaries. CGAP used data provided by microfinance investment intermediaries to estimate funding from individual investors and institutional investors. All data is as of December 2009. Growth rates are based on a subset of respondents for which data is available for all years covered by the surveys. Country breakdowns are based on funding for which country allocation is available.
***
• Cross-border funding for microfinance: Like other development sectors, microfinance receives funding from public and private funders in developed countries. Depending on local capital markets and the regulatory environment, microfinance institutions in developing countries can also access local funding sources, such as client deposits or loans from local commercial banks. The CGAP surveys focus exclusively on foreign, or cross-border, funding for microfinance.
• Commitments: A common way to measure funding for microfinance is to look at funders’ commitments. Total commitments represent the total amount of all currently active investments and projects, whether the funds have been disbursed or are yet to be disbursed during the remaining lifetime of a project. As such, total commitments describe the stock of funds set aside for microfinance at a given time (i.e. December 2009 for the data above). To understand the actual flow of money to the microfinance sector, it is also necessary to look at annual disbursements.
• Microfinance Investment Intermediaries: Microfinance Investment Intermediaries (MIIs) are investment entities that have microfinance as one of their core investment objectives and mandates. MIIs can provide debt, equity or guarantees (directly or indirectly) to microfinance service providers. The main types of MIIs are Microfinance Investment Vehicles (MIVs), Holding Companies and others such as peer-to-peer lending platforms.
Survey Participants
Public funders
Multilateral and UN agencies
N=8 AfDB, AsDB, EC, IFAD, ILO, IsDB, UNCDF, World Bank
Bilateral agencies
N=15 AusAID, CIDA, DANIDA, DFID, Finland MoFA, GTZ, Italy MoFA, JICA, Lux Dev, MCC, Netherlands MoFA, NORAD, SDC, Sida, USAID
Development finance institutions (DFIs)
N=18 AECID, AFD Proparco, BIO, CAF, CDC, DCA USAID, EBRD, EIB, Finnfund, FMO, ICDF, IFC, IIC, KfW, MIF IADB, Norfund, OPIC, SIFEM
Private funders
Foundations and NGOs
N=16 Foundations: Citi, Doen, Ford, Gates, Grameen, Grameen Jameel, Mastercard, MSDF, Rabobank, Stromme, Whole Planet; NGOs: Cordaid, HIVOS, ICCO, Omidyar Network, Oxfam Novib
Individual Investors n/a CGAP estimates*
Institutional InvestorsN=4 + CGAP estimates*
ABP, ING, PGGM, TIAA Cref, and CGAP estimates*
*CGAP estimates are based on data from 90 MIIs. For more information on MIIs see http://www.cgap.org/p/site/c/template.rc/1.11.142715/
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www.microfinancegateway.org