Main Results

European Microfinance European Microfinance NetworkNetwork

Main ResultsMain Results


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Survey of 2008-2009 activities:Survey of 2008-2009 activities:Successful Collaborative EffortSuccessful Collaborative Effort

• Built on the strengths of the previous surveys conducted on EMN’s behalf in 2003, 2006 and 2008.– Reduced number of questions to focus on most

relevant topics – Incorporation of new questions related to EMN

working groups: Social Performance, IT, Regulation

– Standardized financial indicators– Continued and improved data breakdown:

gender, ethnicity, immigrant status, youth, disability

– Questionnaire available in Bulgarian, English, German, Hungarian, Italian and Spanish.


• Work Coordinated by Nantik Lum (Spain) with Work Coordinated by Nantik Lum (Spain) with the efforts of 11 collaborating agencies the efforts of 11 collaborating agencies

Réseau Financement Alternatif ASBL (RFA), BelgiumRéseau Financement Alternatif ASBL (RFA), Belgium Centre for Entrepreneurship and Executive Development Centre for Entrepreneurship and Executive Development

(CEED), Bulgaria(CEED), Bulgaria European Microfinance Network (EMN), FranceEuropean Microfinance Network (EMN), France Deutsches Mikrofinanz Institut (DMI), GermanyDeutsches Mikrofinanz Institut (DMI), Germany Hungarian Microfinance Network (HMN), HungaryHungarian Microfinance Network (HMN), Hungary Giordano Dell’ Amore Foundation (FGDA), ItalyGiordano Dell’ Amore Foundation (FGDA), Italy INHolland University of applied sciences, Center for INHolland University of applied sciences, Center for

Microfinance and Small Business Development , the Microfinance and Small Business Development , the NetherlandsNetherlands

EUROM Consultancy, RomaniaEUROM Consultancy, Romania Fundación Nantik Lum, SpainFundación Nantik Lum, Spain Nätverk för Entreprenörer från Etniska Minoriterer (NEEM), Nätverk för Entreprenörer från Etniska Minoriterer (NEEM),

SwedenSweden Independent Microfinance Consultant and Director of the Independent Microfinance Consultant and Director of the

Centre for Responsible Credit, United KingdomCentre for Responsible Credit, United Kingdom


Large Number of ResponsesLarge Number of Responses

170 institutions representing 21 countries 170 institutions representing 21 countries from the European Unionfrom the European Union

97 new entrants97 new entrants More responses from institutions in Norway, More responses from institutions in Norway,

Sweden, and Ireland, compared to previous Sweden, and Ireland, compared to previous surveysurvey

First time responses from Croatia, Estonia, First time responses from Croatia, Estonia, Latvia, and LithuaniaLatvia, and Lithuania

No responses from Austria and Slovakia due No responses from Austria and Slovakia due to absence of current microcredit to absence of current microcredit programmesprogrammes


Diversity in Number of Loans Diversity in Number of Loans DisbursedDisbursed

• Number of loans disbursed by country range from 6 to Number of loans disbursed by country range from 6 to 28,863 for 2009.28,863 for 2009.

• Factors that influence loan numbers by country appear to Factors that influence loan numbers by country appear to be:be:• Age of sectorAge of sector• Number and types of actors and their geographic Number and types of actors and their geographic

reachreach• Whether microlending is the primary activity or one of Whether microlending is the primary activity or one of

many activities carried out by the organisationmany activities carried out by the organisation

• E.g. in France: Two lenders in the market since the 1980s, with national E.g. in France: Two lenders in the market since the 1980s, with national coverage, but with different lending methodologies: 1 not-for-profit coverage, but with different lending methodologies: 1 not-for-profit organisation with zero-interest quasi-equity loans that allow organisation with zero-interest quasi-equity loans that allow beneficiaries to access significant complementary bank credits; 1 NGO beneficiaries to access significant complementary bank credits; 1 NGO providing standard microloans with interestproviding standard microloans with interest

• E.g. in Hungary: small foundations operate locally; a bank working on E.g. in Hungary: small foundations operate locally; a bank working on the international level disbursed 9,500 loans; the international level disbursed 9,500 loans;

• E.g. in Germany: 60% of organisations started lending after 2005, they E.g. in Germany: 60% of organisations started lending after 2005, they operate locally; a government body operating internationally disbursed operate locally; a government body operating internationally disbursed 7,000 loans 7,000 loans


In 2009, a total of 84,523 microcredits for In 2009, a total of 84,523 microcredits for

828 million euros were granted*. In Western 828 million euros were granted*. In Western European countries, 51,027 loans were made for European countries, 51,027 loans were made for 477 million euros, while in Eastern Europe 18,293 477 million euros, while in Eastern Europe 18,293

loans were made for 307 million euros. loans were made for 307 million euros.

72% gave the figures for their active clients. End of 72% gave the figures for their active clients. End of 2009: 135,815 active clients. 2009: 135,815 active clients.

74% of organisations have lent €49.9 billion for 74% of organisations have lent €49.9 billion for 237,495 loans since their creation.237,495 loans since their creation.

*The data didn’t include one major actor in Poland and the network of Procredit banks in Eastern Europe.*The data didn’t include one major actor in Poland and the network of Procredit banks in Eastern Europe.


Number of loans disbursed in Number of loans disbursed in 20092009


Number of active clientsNumber of active clients

There are organisations that reported more numbers of loans than numbers of active borrowers:. This is the case in Germany, Hungary, Latvia, Netherlands, Sweden. In the case of Poland the difference is due to the fact that Fundusz Micro is included in number of loans disbursed but not in number of active clients.


Growth and Decline at the same timeGrowth and Decline at the same time

• Between 2008 and 2009 the number of loans Between 2008 and 2009 the number of loans disbursed decreased by 7%. disbursed decreased by 7%.

• Highest Sector Growth Rates from 2008 to Highest Sector Growth Rates from 2008 to 2009 in:2009 in:

– Hungary (49%)Hungary (49%)– Italy (40%)Italy (40%)– The Netherlands, Latvia, due to the incorporation of The Netherlands, Latvia, due to the incorporation of new institutions that began activities in 2009.new institutions that began activities in 2009.

- - In terms of the highest growth in terms of In terms of the highest growth in terms of number of loans disbursed: Hungary (3412 more number of loans disbursed: Hungary (3412 more loans than in 2008), France (2154), Italy (545) loans than in 2008), France (2154), Italy (545) and Finland (485).and Finland (485).


Diversity in number of loans by country

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Number of loansdisbursed 2008

Number of loansdisbursed 2009


Non-Governmental Organisations are Main ActorsNon-Governmental Organisations are Main Actors


It varies per country


Lenders Making Small Numbers of LoansLenders Making Small Numbers of Loans

• 40% of lenders participating in the survey 40% of lenders participating in the survey were active before 2000were active before 2000

• Nine new actors started lending in 2008 and Nine new actors started lending in 2008 and another nine started lending in 2009another nine started lending in 2009

• Most lenders in the EU/EEA disburse less Most lenders in the EU/EEA disburse less than 50 loans a year (57%).than 50 loans a year (57%).

• On the other hand, 13% of the organisations On the other hand, 13% of the organisations disbursed more than 400 loans in 2009disbursed more than 400 loans in 2009


The sector is youngThe sector is young


Microlending Relatively Small PortionMicrolending Relatively Small Portionof Activity Portfolioof Activity Portfolio• Microlenders break down into two main Microlenders break down into two main

groups:groups: – those for whom it is their primary occupationthose for whom it is their primary occupation– those for whom lending is a relatively small proportion of those for whom lending is a relatively small proportion of

their activity portfoliotheir activity portfolio

• For 36% of respondents, microlending makes up 75-100% For 36% of respondents, microlending makes up 75-100% of their activity portfolio, nearly all located in Bulgaria and of their activity portfolio, nearly all located in Bulgaria and Romania.Romania.

• For 23% of respondents, microlending makes up only 5-25% For 23% of respondents, microlending makes up only 5-25% of their activity portfolioof their activity portfolio


Mission: jobs, inclusion and Mission: jobs, inclusion and growthgrowth


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Financially Excluded and Start-Ups Financially Excluded and Start-Ups Are Main TargetsAre Main Targets

Client Profile:Client Profile:• 47% of respondents target people excluded from 47% of respondents target people excluded from

mainstream financial servicesmainstream financial services• 44% target women44% target women• 41% ethnic-minorities and/or immigrants41% ethnic-minorities and/or immigrants• 32% unemployed people32% unemployed people• 30% no specific targeting30% no specific targeting

Business Type:Business Type:• More target start-ups than existing enterprises, which More target start-ups than existing enterprises, which

fits with the focus to help the socially excluded and fits with the focus to help the socially excluded and address unemploymentaddress unemployment

• As in the previous survey, registered businesses with As in the previous survey, registered businesses with fewer than 5 employees are the main target fewer than 5 employees are the main target (55%)(55%)

• 24% lend to informal or unregistered businesses24% lend to informal or unregistered businesses

65.6% of clients are unbanked persons.65.6% of clients are unbanked persons.

European Microfinance European Microfinance NetworkNetworkNote: Austria and Slovakia did not disclose data on gender balance.

Gender balanceGender balance37.7% of loans disbursed to women in 2009 (82% response rate)**

• Bulgaria and Finland rate best when analyzing the combination of both lending rates and total number of loans to women.** 37.7% when looking at the 82% of respondents, 26.7% when looking at all participants.


Immigrants and ethnic minoritiesImmigrants and ethnic minoritiesIn 2009 32% of loans were given to immigrants/ethnic In 2009 32% of loans were given to immigrants/ethnic

minorities (54% response rate)**.minorities (54% response rate)**.

** 32% on the 54% sample and 13% on the whole sample.


YouthYouth

17.5% of loans were given to young people (18-25) in 2009 (52% response rate).**

** 17.5% on the 52% sample and 11% on all participants.


Providing Support and AdviceProviding Support and Advice A crucial aspect of microfinance A crucial aspect of microfinance

• Training, advice and support are critical Training, advice and support are critical elements in the success of new and existing elements in the success of new and existing businesses. businesses.

• In 2009, 57% of clients benefited from business In 2009, 57% of clients benefited from business development support and 27% of institutions development support and 27% of institutions offer referrals to external providers of this offer referrals to external providers of this service. Only 19% of respondents do not service. Only 19% of respondents do not provide any kind of assistance.provide any kind of assistance.

• None of the respondents cover the full costs of training and support through the fees charged. The majority rely on public and private sector grants and subsidies.


Not only just microcredit for enterprise developmentNot only just microcredit for enterprise development

42% provide other types of financial services


Loan Products and Pricing: Diversity Loan Products and Pricing: Diversity in Loan Sizes and Interest ratesin Loan Sizes and Interest rates

• A variety of loan sizes offered to clients.A variety of loan sizes offered to clients.

• The maximum loan size offered to clients ranges from The maximum loan size offered to clients ranges from €37,000 to €220 (even if the EU defined a microcredit €37,000 to €220 (even if the EU defined a microcredit as being below €25,000).as being below €25,000).

• (Non-weighted) Interest rates charged range from 2% (Non-weighted) Interest rates charged range from 2% at the lowest to 22% at the highest. The average is at the lowest to 22% at the highest. The average is 9%.9%.

• Average (non-weighted) interest rates vary by country - Average (non-weighted) interest rates vary by country - the highest rates are charged in the United Kingdom the highest rates are charged in the United Kingdom (22% (22% averageaverage), Poland (17% average) and the lowest in ), Poland (17% average) and the lowest in Portugal and Finland (3% and 2% respectively).Portugal and Finland (3% and 2% respectively).


Euribor 5%


Broad Range in Average Loan SizeBroad Range in Average Loan Size

• The weighted average amount lent is €10,012.The weighted average amount lent is €10,012.

• It’s a decrease compared to 2007 (average loan size It’s a decrease compared to 2007 (average loan size €11,002).€11,002).

• Despite this, we find that in some EU countries, loan Despite this, we find that in some EU countries, loan disbursements are moving toward larger loans and the disbursements are moving toward larger loans and the higher end of the market.higher end of the market.

- - E.g. Netherlands – average loan size €14,745E.g. Netherlands – average loan size €14,745

- E.g. United Kingdom – average loan size €9,623- E.g. United Kingdom – average loan size €9,623

- E.g. Hungary – average loan size €14,545- E.g. Hungary – average loan size €14,545


Average loan size per country


The Average Loan Size varies according to the The Average Loan Size varies according to the institutional typeinstitutional type

FinancialInstitution

cooperativeBankFoundation

15,852

11,379

11,070 10,948

9,144

8,340

8,054

6,456

Government Body CDFI Bank NGO or Savings Non-bank Credit Union/ Other


Depth of outreachDepth of outreachDetermined using the World Bank data for 2008 GNI Determined using the World Bank data for 2008 GNI per capita per country and average loan size.per capita per country and average loan size.


Limited Data on Portfolio PerformanceLimited Data on Portfolio Performance

• Although more institutions responded in this current survey Although more institutions responded in this current survey than in previous surveys, the number of responses continues than in previous surveys, the number of responses continues to be low. Why?to be low. Why?

- Under-developed management information systems (MIS)- Under-developed management information systems (MIS)- Confidentiality (banks)Confidentiality (banks)

• For the data available in 2009*:For the data available in 2009*: - - Average repayment rate of 83%,Average repayment rate of 83%, 6 % lower than the 6 % lower than the previous survey (around 90%)previous survey (around 90%)

- - Percent Portfolio at risk (>30) is 16.8%Percent Portfolio at risk (>30) is 16.8% (14% previous (14% previous survey)survey)

- - Value of write offs was 5.2%,Value of write offs was 5.2%, of average portfolio of average portfolio outstanding, similar to the previous surveyoutstanding, similar to the previous survey

- - Average Operational Self-Sufficiency: 98.7%Average Operational Self-Sufficiency: 98.7%

* on basis of response rate (CRR: 16.5%, PAR>30: 37%, Write-offs: 35%, * on basis of response rate (CRR: 16.5%, PAR>30: 37%, Write-offs: 35%, OSS: 28%)OSS: 28%)


External Funding Still Plays an Important External Funding Still Plays an Important RoleRoleOperational CostsOperational Costs

-In contrast to the previous survey, 60% of survey In contrast to the previous survey, 60% of survey respondents cover their operational costs through respondents cover their operational costs through earned income (fees, interest and income earned earned income (fees, interest and income earned on assets). on assets).

Loan CapitalLoan Capital

-Loan capital comes from a combination of public Loan capital comes from a combination of public and private sources, and private sources, with public sources most with public sources most important:important: Public sector 50%Public sector 50% Own funds, Private sector, Client deposits, Own funds, Private sector, Client deposits, commercial debtcommercial debt


Crisis impactCrisis impact


Future Visions: GrowthFuture Visions: Growth

• Reaching financial sustainability Reaching financial sustainability remains the primary concern for the remains the primary concern for the responding organizations.responding organizations.

• Access to long-term fundingAccess to long-term funding• Regulatory flexibilityRegulatory flexibility• Growth and targeting of new groups of Growth and targeting of new groups of

peoplepeople


Most Important Future GoalsMost Important Future Goals


Réseau Européen de la Microfinance - ParisRéseau Européen de la Microfinance - Paris103 Rue de Vaugirard103 Rue de Vaugirard75 006 Paris - France75 006 Paris - FranceTel: +33 1 42 22 01 19 Tel: +33 1 42 22 01 19 Fax: + 33 1 42 22 06 44Fax: + 33 1 42 22 06 44

Réseau Européen de la Microfinance - BruxellesRéseau Européen de la Microfinance - Bruxellesdans les locaux du dans les locaux du Fonds de participation – ParticipatiefondsFonds de participation – Participatiefondsrue de Ligne 1rue de Ligne 11000 Bruxelles – Belgique1000 Bruxelles – BelgiqueTel: +32 2 209 08 38Tel: +32 2 209 08 38Fax: +32 2 209 08 32Fax: +32 2 209 08 32

www.european-microfinance.org

Main Results

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