In Central And Eastern Europe - Microfinance Centre

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in Central and Eastern Europe and the New Independent States 35 monopoly on deposit taking for a short period of time, just when many international organisations and Kosovars were looking for safe places to save. On average, each microfinance bank has 2,700 borrowers and a loan portfolio of US$10 million, making them the largest MFI type in the region (see Figure 4.1). Among the top performers are the Microfinance Bank in Georgia, which had nearly 16,000 clients and a portfolio of US$23 million in September 2001, and KMB Russia, which had 7,400 clients and a portfolio of US$78 million. Figure 4.1 MFI Type by Loan Portfolio Size 100 90 80 70 60 50 40 30 20 10 % 0 Credit Unions NGOs Commercial Banks Microfinance Banks > US $10 million US $5–10 million US $1–5 million < US $1 million With the support of large volumes of up-front investment, the microfinance banks have achieved consistently better financial performance than any other MFI type. Six of the ten IMI-led microfinance banks were profitable after three years in operation, with reported returns on equity ranging from 4% to as high as 47%. However, these returns are not adjusted to take subsidies into account. MEB Kosovo is again an exception, with a return of 96%. The microfinance banks’ high rates of profitability, compared to other MFI types, are partially driven by their larger loan sizes and ability to earn revenue from nonlending services, such as money transfers and foreign exchange. These services can account for up to 40% of their total revenue. (See Chapter 6 for further discussion.) Structure and Performance of the Industry by Subregion The countries of Central and Eastern Europe and the New Independent States comprise a vast and diverse region. It includes the EU accession countries with relatively advanced economies, as well as the countries of the Caucasus and Central Asia, which are among the poorest in the world. The pattern of microfinance development in each of the five subregions defined in the study is fairly distinct, often determined by the levels of foreign donor support and government acceptance of microfinance. The subregion of Eastern and Central Europe (ECE) has the highest level of microfinance activity overall, due to the long history and the strong presence of credit unions. Other MFIs, however, are fairly undeveloped in this subregion. In the Balkans, microfinance—mainly NGO MFIs and microfinance banks—has developed with high Industry Profile
36 The State of Microfinance Table 4.2 Top 20 MFIs in Region by Number of Active Borrowers MFI Name Country MFI Type Year Operations Began Number of Borrowers (September 2001) Loan Portfolio (US$ million) Profitability (OSS 1 or *ROA 2 ) 1 FINCA Kyrgyzstan NGO 1995 20,315 3.3 114 60 2 Microfinance Bank Georgia MFB 1999 15,724 23.0 2* 199 3 Constanta Foundation Georgia NGO 1997 11,483 1.0 135 15 4 Sberbank Russia CB 1994 9,550 47.5 – 300 5 Fundusz Mikro Poland NGO 1995 9,405 9.8 109 40 6 Mercy Corps Women’s MicroCredit Program Kyrgyzstan NGO 1997 8,500 0.7 281 30 7 UMCOR/AREGAK Armenia NGO 1997 7,500 1.7 272 43 8 Kyrgyz Agricultural Finance Corporation Kyrgyzstan Public Company Depth Ratio 3 % 1997 7,462 1.5 – 77 9 KMB Bank Russia MFB 1998 7,424 78.0 103 633 10 MCO Partner (Mercy Corps affiliate) Bosnia and Herzegovina NGO 1997 6,603 5.4 149 65 11 FINCA Georgia NGO 1998 6,559 0.6 89 16 12 XAC Bank Mongolia MFB 1999 6,542 2.4 7* 94 13 NABWT Tajikistan NGO 1999 5,818 0.8 130 80 14 "Kamurj" Armenia NGO 2000 5,580 0.9 145 33 15 Rural Finance Fund Albania NGO 1992 5,277 3.7 – 63 16 EKI WV (World Vision affiliate) Bosnia and Herzegovina NGO 1996 5,042 6.4 – 102 17 FORA Russia NGO 2000 4,900 2.9 64 36 18 MI-BOSPO Tuzla Bosnia and Herzegovina NGO 1996 4,216 2.2 146 41 MIKROFIN Banja Luka Bosnia and 19 (CARE affiliate) Herzegovina NGO 1997 4,121 4.2 156 82 20 MEB BiH Bosnia and Herzegovina MFB 1997 4,032 14.9 8* 293 Notes: The Aga Khan Foundation’s microfinance programme in Tajikistan also serves a large number of borrowers and may deserve to be on the top 20 list. According to a 2001 CGAP microfinance assessment, it granted loans to 20,000 clients in 2001; however, survey data were not available on the number of outstanding borrowers, so the Aga Khan Foundation could not be included in this table. 1 OSS = Operational self-sufficiency. 2 ROA = Return on assets. 3 Depth ratio refers to the average loan balance as a percentage of GNP per capita and is a measure of the depth-of-poverty outreach (see Chapter 5). Chapter 4
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CHAPTER 8 THE LEGAL AND REGULATORY
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APPENDIX 3 DATA TABLES Industry Cha
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APPENDIX 4 MICROFINANCE INSTITUTION
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Eastern and Central Europe 137 Coun
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The Caucasus continued 139 Country
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Central Asia continued 141 Country
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CGAP c/o The World Bank 1818 H Stre
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In Central And Eastern Europe - Microfinance Centre

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