A reading of Financial Benchmark results
Despite the continuing pandemic,
the first half of 2021 has been characterized
by an annual average increase of 5.6% and
3.0% of the Gross Loan Portfolio and Number
of Borrowers respectively. These growths are
the results of strong strategies deployed by
MFIs to counteract the effect of the pandemic
on their activities.
The average loan size is still larger in Latin
America (US$2,000 per borrower) than in
Africa (US$200).
The credit risk remains high showing that there is still concern about the loan recovery. However, the rescheduled and refinanced loans recorded a decrease as compared to 2020.
In terms of productivity, the indicators show some improvements demonstrating a prudent recovery of the activities despite the remaining difficult context.
Operational Efficiency
Operational efficiency is still difficult to ameliorate in this complex scenario. Indeed, it remains almost the same as in 2020 with around 20.0% (with respect to total Gross Loan Portfolio) in both Latin America and Africa.
The pandemic was a revelation for several MFIs in terms of digitization. Several surveyed and rated MFIs by MicroRate are willing to implement a digital transformation of their operations, in the coming periods, to increase the possibility of improving their expenses levels but also to serve populations in new localities.
Although several MFIs from Latin America and Africa expect to see the final impact of the pandemic by 2022, they continue operating and willing to get better results before that.
Portfolio yield (measured as financial income over Gross Loan Portfolio) did not reach the pre pandemic levels but remain acceptable with around 30%. It should be noted that this indicator is still partially fed by accrued returns associated with current rescheduling and, in some cases, the shifting of strategies to other market niches.
There is a great deal of expectation regarding the development of key indicators to be analyzed soon by MicroRate in its December 2021 edition.
MicroRate's Financial Benchmark
For over 20 years, our benchmark has been prepared based on semi-annual information from financial institutions rated by MicroRate. Thus, this report is an important reference to evaluate the performance of the main microfinance financial and management indicators of Microfinance Institutions.
To know the indicators and receive more information,
please contact us by: info@microrate.com