글로벌 마이크로파이낸스 시장 – 2023-2030

Overview
Global Microfinance Market reached US$ 217.6 billion in 2022 and is expected to reach US$ 483.6 billion by 2030, growing with a CAGR of 10.5% during the forecast period 2023-2030.
The microfinance market is expected to be driven by technology innovations, catalyzing financial inclusion and efficiency in microfinance markets globally. Mobile banking solutions have gained traction in developing countries, leveraging the rise in mobile phone penetration to offer credit, savings, payments and e-wallet options. Such innovations, forged through partnerships like the one with Mastercard Foundation, are pivotal in advancing financial inclusion and efficiency in microfinance.
Furthermore, to leverage IT interventions effectively, the microfinance industry is educating and empowering rural populations through regular sessions, awareness campaigns and workshops. The integration of telecom services into microfinance operations is revolutionizing customer experiences, operational efficiency and access to financial services. The adoption of mobile money platforms is a prime example, as it empowers individuals to engage in secure and user-friendly financial transactions through their mobile devices.
Microfinance institutions are utilizing mobile money to facilitate funds transfers, savings accounts and bill payments, democratizing access to formal financial services and empowering underserved communities. Asia-Pacific has the largest regional share in global microfinance market, driven by a series of strategic initiatives and supportive policies.
China's microfinance market has been on a remarkable growth trajectory, with significant accomplishments over the past decade. The establishment of the Commercial Factoring Expertise Committee (CFEC) underscored the industry's commitment to growth and innovation. The subsequent launch of comprehensive standards and regulations enhanced industry performance, efficiency and business outcomes in the region.
Dynamics
Microfinance Evolution Driven by Tech Integration and Collaboration
The Microfinance market is expected to be driven by increased integration of new technologies and advanmicrofinances in the services, inspired by digital transformation and technology evolvement to bridge gaps between financial service providers and the underserved population. Collaborations between tech companies and financial institutions further reshape the financial services industry. Moreover, technology fosters consumer protection, reduces costs and extends services to previously excluded clients.
Bankly, a prominent fintech firm specializing in payment processing, has unveiled its latest venture, Bankly Microfinance Bank, heralding a significant milestone in their quest to offer accessible financial solutions in Nigeria. Its digital approach has modernized the conventional thrift collection system, introducing transparency and enhanced accessibility. Bankly's agency banking network has grown substantially, providing services to more than 12 million individuals through a network of 50,000 agents by 2020.
SME Growth Fuels Microfinance Institutions Expansion in Developing Nations
The growing SMEs globally is expected to drive the market expansion of microfinance services in developing nations, where traditional infrastructure development often lags. SMEs, pivotal for generating employment and livelihoods, face hurdles in obtaining credit from established financial sectors. The partnership between microfinance and SMEs goes beyond credit, extending to guidance for business expansion. Microfinance institutions play a pivotal role in aiding SMEs to diversify, access new markets and strengthen their operational foothold.
As indicated in a study conducted by Investopedia, small and medium enterprises constitute roughly 95% of the global economy. Concurrently, the International Finance Corporation has projected that nearly 40% of formal micro, small and medium enterprises in developing nations experience an unfulfilled financial requirement amounting to US$5.2 trillion each year. The existing gap in financing presents a substantial reservoir of untapped possibilities for the expansion of SMEs, thereby contributing to the expansion of the microfinance market.
High Interest Rates Impacts Microfinance Institutions
The microfinance market is significantly impacted by the high-interest rates charged by Microfinance Institutions. According to an article by "The Print", an Indian news portal, MFIs impose interest rates ranging from 15% to 27% on loans, which stands in stark contrast to the relatively lower return on investment (RoI) offered by Public Sector Banks, varying from 7% to 11%. The substantial disparity in interest rates has profound repercussions on the effectiveness and ethical standing of microfinance endeavors.
The exorbitant interest rates charged by MFIs paradoxically contradict their fundamental mission of promoting social justice and alleviating financial vulnerability. MFIs are influenced by a combination of financial and operational costs, write-off rates and the average loan size. The recent surge in interest rates has not only raised concerns about the stability of MFIs but has also triggered ethical debates, prompting governments to question the ethicality of certain MFI practices.
Segment Analysis
The global microfinance market is segmented based on service, provider, institution, end-user and region.
Microcredit's Role in MFIs Empowerment
Micro-credit holds the largest market share in the microfinance market driven by low-income individuals and groups, particularly in semi-urban and rural areas, who lack a stable source of income and collateral for traditional loans. Microcredit addresses the unique financial challenges faced by lower socio-economic backgrounds by offering tailored financial products like savings accounts and loans. The microcredit loans empower low-income individuals to generate income and achieve sustainable livelihoods.
Furthermore, government incentives of microcredits in different nations significantly expanding its market growth. For instance, the government of India, as highlighted by Union IT and Telecom Minister Ashwini Vaishnaw, is planning to emphasize the provision of micro-credit facilities for street vendors in the year 2023. The initiative will be supported by digital technologies. The aim is to offer credit facilities in the range of Rs 3,000-5,000 (US$ 30 to US$ 60) to street vendors, addressing their small credit requirements. The move is intended to simplify the process of accessing credit and empower street vendors economically.
Geographical Penetration
Asia-Pacific Leads Microfinance Market with SMEs and Digital Investments
Asia-Pacific is the largest region in the microfinance market driven by embracing services in SEMS and other government investments in the region. In India, as literacy and mobile phone penetration increase in poor and rural regions, microfinance customers' expectations are evolving. It is now expect personalized solutions delivered through automated analytics, machine learning and artificial intelligence. MFIs in India plan to invest in various digital technologies.
It includes 70% planning to invest in AI, ad major investment in cloud-based solutions and digitizing their collections process. It indicates that predictive analytics will play an important role in the future of the microfinance sector. Furthermore, banks in countries like China and India utilizing various lending techniques such as financial statement lending, asset-based lending, credit scoring and relationship lending.
The effectiveness of these techniques depends on the availability of hard and soft data. Moreover, MFIs can partner with fintech companies and banks to tap into the co-origination space, enabling last-mile financial inclusion by designing products and processes that fit the needs of both entities.
Competitive Landscape
The major global players in the market include Grameen Bank, SKS Microfinance, BRAC, Compartamos Banco, Bandhan Bank, FINCA International, ASA International, Opportunity International, BancoSol and Equitas Small Finance Bank.
COVID-19 Impact Analysis
COVID-19 made a significant impact on microfinance institutions, particularly affecting medium and small microfinance providers, commonly referred to as Tier 2 and Tier 3 providers. The providers, which serve marginalized communities often overlooked by larger lenders, faced escalating solvency risks as the pandemic unfolded. The pandemic presented operational challenges for MFIs, including the inability to meet clients in person, difficulties in collecting loan repayments and complications in disbursing loans.
The pandemic underscored the importance of integrating quasi-equity instruments and blended finance solutions to counter the challenges. Rather than relying solely on traditional debt-based measures. The financial impact of these operational challenges was significant. Most MFIs experienced an increase in their portfolio at risk due to lower loan repayments and a reduction in outstanding loans owing to decreased disbursements. Additional issues included temporary liquidity shortages, currency depreciation effects and delays in donor disbursements.
Russia-Ukraine War Impact
The Russia-Ukraine war made a significant impact on microfinance institutions, which are rippling through various economic sectors. The volatility in global financial markets has led to delays in fund-raising efforts by local companies and banks. The delay, coupled with the uncertainty surrounding the conflict, is likely to impact the securitization pool performance, resulting in lower collections and increased delinquencies for microfinance transactions.
The ongoing conflict between Russia and Ukraine has introduced uncertainties across various asset classes within the microfinance sector. The impact on securitization pool performance is expected to be uneven, affecting different asset classes differently. While the market reaction to the conflict has been relatively orderly, the elevated and volatile prices of commodities and energy could stress derivatives markets, impacting financial institution.
By Service
• Group and Individual Micro Credit
• Leasing
• Micro Investment Funds
• Insurance
• Savings and Checking Accounts
• Others
By Provider
• Banks
• Non-banks
By Institution
• Joint Liability Group
• Self-Help Group
• Grameen Bank Model
• Rural Cooperatives
By End-User
• Personal
• Commercial
By Region
• North America
o U.S.
o Canada
o Mexico
• Europe
o Germany
o UK
o France
o Italy
o Russia
o Rest of Europe
• South America
o Brazil
o Argentina
o Rest of South America
• Asia-Pacific
o China
o India
o Japan
o Australia
o Rest of Asia-Pacific
• Middle East and Africa
Key Developments
• In August 2023, Light Microfinance, a Gujarat-based NBFC (Non-Banking Financial Company), formed a strategic partnership with Chennai-based fintech firm IppoPay to enhance digital lending services for micro, small and medium enterprises (MSMEs) in rural and semi-urban micro-markets across Tamil Nadu andhra Pradesh, Telangana and Karnataka. IppoPay, backed by investors like Coinbase Ventures and Better Capital, specializes in offering payment solutions to approximately 400,000 merchants. The collaboration capitalizes on Light Microfinance's lending expertise and IppoPay's fintech platform, enabling the provision of MSME loans.
• In March 2023, Leegality, a document infrastructure platform, launched Local Language eSign Interfaces to facilitate the expansion of digital paperwork processes, particularly in the micro-lending and banking sectors. The financial industry has witnessed a surge in the adoption of digital document execution, including electronic signatures and digital stamping, in recent years. Microfinance Institutions (MFIs), which serve customers with limited access to financial services, can benefit from Leegality's solution.
• In April 2023, AGAM International, a UK-based FinTech company, partnered with Bangladesh's Micro Finance Institution, SBK Foundation, to introduce the first Sharia-based digital microcredit product in Bangladesh. The Sharia finance product is aimed at individuals and small businesses in need of financial resources but lacking the collateral or credit history typically required for traditional loans.
Why Purchase the Report?
• To visualize the global microfinance market segmentation based on service, provider, institution, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of microfinance market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.
The global microfinance market report would provide approximately 64 tables, 69 figures and 216 Pages.
Target Audience 2023
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies