Global microscope on the microfinance business environment 2012

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These were established some time ago and the
legal environment is perceived as not conducive to
the entrance of new micro players.
l Microfi nance in Turkey is broadly unregulated
and is marginal to the fi nancial sector. Banks are
sophisticated and able to provide micro credit, but
regard it as “corporate social responsibility” rather
than commercially viable lending. This perception
stems from legacy programmes in agribusiness
with banks effectively involved in giving grants
rather than loans to clients in rural areas.
l Client dispute resolution continues to be carried
out informally outside of the courts. The legal
system is considered adequate in dealing with
larger credit claims.
l Price disclosure practices are driven by
competition from banks and political conditions
within the sector, as regulations in the
microfi nance area specifi c to this issue do not exist.
© The Economist Intelligence Unit Limited 2012
<strong>Global</strong> <strong>microscope</strong> on the microfi nance business environment 2012
l Growth of the main micro lender has been
exponential, but is now perceived as risky, with
resources stretched. It has revealed, however,
substantial pent-up demand for micro loans.
Key changes and impacts since last year:
l TGMP dominates the microcredit sector. Last
year, the institution reported strong growth,
raising concerns that this institution is becoming
overleveraged. Systemically, the total size of their
portfolio remains negligible, drawing little
attention from the regulators.
l Maya Micro Enterprise, the other main
microfi nance player, is undergoing reorganisation
via a change in legal status whereby it will become
a for-profi t arm of a non-profi t foundation. This
may become a legal precedent in the making, once
accomplished.
l Emphasis on growth has placed more attention on
the need to fi nance SMEs and micro entrepreneurs.