Cross-Border Funding for Microfinance East Asia and the Pacific Results of the CGAP Cross-border Funding Surveys 2010
About the surveysThe CGAP surveys focus on cross-border funding for microfinance.Over 150 institutions and funds have participated in CGAP’s 2010 surveyson microfinance funding, representing 85 to 95% of the total estimatedcross-border funding to microfinance.CGAP collects data from major funders (bilateral and multilateral agencies,development finance institutions, foundations) and from microfinanceinvestment intermediaries (MIIs) such as Microfinance Investment Vehicles(MIVs) and holdings.All data is as of December 2009. For any questions or data requests please contact Barbara Gähwiler at email@example.com.
At a Glance Commitments to Microfinance for EAP as of December 2009: $1.5 billion* 27 Public Donors and Private Donors and Investors Investors (Foundations, Institutional and (Multilaterals, Bilaterals, DFIs) Retail Investors) $0.95 billion $0.55 billion 42 Microfinance $0.94 bln $0.01 bln Investment $0.54 bln $0.01 bln Intermediaries (MIIs) Apexes Apexes $0.5 bln Microfinance (Support for microfinance at all levels of the financial system: retail, market infrastructure, and policy) * CGAP surveys capture 85 to 95% of the total cross border f unding to microfinance
$1.5 billion committed to EAP Committed Amount (million USD) +17% 21,313 (100%) Annual Growth Rates for 2008 to 2009 +22% +21% 6,188 (29%) +1% 4,724 (22%) +22% 4,064 (19%) +38% +19% +4% 2,544 (12%) 1,546 (7%) 787 (4%) 1,461 (7%) Total East Asia & Eastern Europe Latin America Middle East South Asia Sub-Saharan Multi-Region the Pacific & Central Asia & the Caribbean & North Africa (SA) Africa (SSA) (EAP) (ECA) (LAC) (MENA)Number of respondents: 61 and CGAP estimates based on 90 MIVs • Cross-border funders committed $1,546 million to EAP as of 2009, representing 7% of total cross-border funding to microfinance. • Commitments to EAP increased by 19% in 2009, compared to 17% globally. • 27 public funders (bilateral and multilateral agencies and development finance institutions - DFIs), 12 foundations/NGOs and 42 Microfinance Investment Intermediaries (MIIs) are active in EAP.
Public funding dominant, but private funding growing faster Commitments by Type of Funder 13% 16% 25% 31% 32% 37% 87% 40% 46% 84% 75% 69% 68% 63% 60% 54% Total EAP ECA LAC MENA SA SSA Multi-Region Public Funders Private FundersNumber of respondents: 61 and CGAP estimates based on 90 MIVs • Public funders provide 63% of total commitments (compared to 69% globally). Private funders (foundations, institutional investors and individual investors) account for 37%. • However, private funding grew by 47% in 2009 (compared to 33% globally), while public funding increased by only 7% (compared to 12% globally). • Among public funders, multilateral agencies decreased their commitments by -3%, while bilateral agencies increased by 2% and DFIs by 18%.
Higher commitments for capacity building than in most regions Commitments by Purpose 1% 12% 9% 12% 33% 24% 17% 99% 16% 88% 91% 88% 83% 84% 76% 67% Total EAP ECA LAC MENA SA SSA Multi-Region Onlending Capacity BuildingNumber of respondents: 58 and CGAP estimates based on 90 MIVs• 83% of commitments to EAP are used to refinance retail financial service providers, directly or indirectly, compared to 88% globally.• With 17% of commitments used for capacity building, EAP is the region with the second highest share of funding used for capacity building.• $250 million are committed to capacity building in EAP. A third of these funds are used at the market infrastructure and policy levels. Indonesia, China, Vietnam receive ~75% of capacity building funds to EAP.• Funding for on-lending increased by 26% in 2009, mostly driven by China. Funding for capacity building increased by 17%, driven by Lao and Indonesia.
Debt is the main instrument, but grants and guarantees increased Commitments by Type of Commitments by Type of Direct Funding by Direct Funding by Instrument Funding (TOTAL) Funding (EAP) Instrument (TOTAL) (EAP) 4% 5% 4% 21% Other 38% Guarantee 5% Guarantee 55% 45% 59% 41% 6% Grant Grant Equity 66% Equity 51% Debt Debt Direct Indirect Direct Indirect Number of respondents: 58 and CGAP estimates based on 90 MIVs• 41% is provided by funders directly or channeled through local governments, compared to 45% globally; the remaining 59% are channeled via intermediaries such as MIIs.• While debt remains the main financial instrument used by funders, grants represent 38% of direct commitments compared to 21% globally. Out of the $260 mln committed in grants, ~50% are to Indonesia.• DFIs provide the majority of direct equity investments. Cambodia, Mongolia and Indonesia represent more than 75% of all direct equity investments.• Guarantees are used only in Indonesia, Philippines and Cambodia.• Debt and equity have decreased in the region, while grants and guarantees increased by more than 40% each in 2009.
China receives more than a third of funding to EAP Commitments by Country as of Dec. 2009, and 2008/2009 Trend Country allocation is available for 63% of EAP commitments 2009 2008/2009 Commitments Growth Cambodia $100 to 300 mln ↓ China $300 to 500 mln ↑↑ Indonesia $100 to 300 mln ↑ <$2 mln Lao PDR $2 to 50 mln ↑ $2 to 50 mln Malaysia <$2 mln → $51 to 100 mln Marshall Islands <$2 mln → $101 to 300 mln Mongolia $50 to 100 mln → $301 to 500 mln Myanmar $2 to 50 mln ↑ Papua New Guinea $2 to 50 mln → ↑↑ increases, more than 20 mln Philippines $50 to 100 mln ↓↓ ↑ increases, 5 to 20 mln Solomon Islands <$2 mln → → same or change less than 5 mln Thailand <$2 mln → Timor-Leste <$2 mln → ↓ decreases, 5 to 20 mln Vietnam $100 to 300 mln → ↓↓ decreases, more than 20 mln • Funders are active in 14 countries in EAP. • Commitments to China represent around a third of total commitments to EAP and are growing faster than in other countries. The top 5 countries, China, Indonesia, Vietnam, Cambodia, Philippines, represent ~80% of total commitments to EAP.Country breakdown is available only for direct funding
Active Funders in EAPTop 5 Funders in EAP Active Funders in EAP% of Commitments to EAP KfW 11% Multilateral & UN Agencies Bilateral Agencies Microfinance Investment Intermediaries (MIIs) World Bank 10% AsDB AusAID AsDB 6% EC CIDA Accion Gateway Lux MDF IFAD 6% IFAD Finland MoFA Advans MFLO-LC GTZ 5% ILO GTZ Alterfin MicroCred Holding UNCDF JICA ASN-Novib MicroCredit World Bank Lux Dev BOLD I MicroVest I Norad BOLD II Minlam Development Finance USAID BOMS I Oikocredit Institutions (DFIs) BOPEF Opportunity LGF AECID Foundations & NGOs Consorzio Etimos OTI AFD Proparco Citi Foundation CRESUD Planet MicroFund BIO Cordaid DBMDF respA GMF CDC Doen Foundation DBMF-1 respA MF DCA USAID Ford Foundation Dignity respA MLF EBRD Gates Foundation DMCF SNS EIB Grameen Foundation DWM MF SNS MF II FMO Hivos EMF Symbiotics DRF ICDF ICCO Finethic Triodos FSF IFC Omydiar Network GCMC Triodos MF KfW Oxfam Novib Grameen CAMF Triodos-Doen Norfund Rabobank Foundation Hivos-Triodos Wallberg GMF OPIC Whole Planet Foundation KCD Global XXEB
Method and Definitions• Method: Figures are based on data reported by 61 funders and 90 microfinance investment intermediaries. CGAP used data provided by microfinance investment intermediaries to estimate funding from individual investors and institutional investors. All data is as of December 2009. Growth rates are based on a subset of respondents for which data is available for all years covered by the surveys. Country breakdowns are based on funding for which country allocation is available. ***• Cross-border funding for microfinance: Like other development sectors, microfinance receives funding from public and private funders in developed countries. Depending on local capital markets and the regulatory environment, microfinance institutions in developing countries can also access local funding sources, such as client deposits or loans from local commercial banks. The CGAP surveys focus exclusively on foreign, or cross-border, funding for microfinance.• Commitments: A common way to measure funding for microfinance is to look at funders’ commitments. Total commitments represent the total amount of all currently active investments and projects, whether the funds have been disbursed or are yet to be disbursed during the remaining lifetime of a project. As such, total commitments describe the stock of funds set aside for microfinance at a given time (i.e. December 2009 for the data above). To understand the actual flow of money to the microfinance sector, it is also necessary to look at annual disbursements.• Microfinance Investment Intermediaries: Microfinance Investment Intermediaries (MIIs) are investment entities that have microfinance as one of their core investment objectives and mandates. MIIs can provide debt, equity or guarantees (directly or indirectly) to microfinance service providers. The main types of MIIs are Microfinance Investment Vehicles (MIVs), Holding Companies and others such as peer-to-peer lending platforms.
Survey Participants Public funders Multilateral and UN N=8 AfDB, AsDB, EC, IFAD, ILO, IsDB, UNCDF, World Bank agencies N=15 AusAID, CIDA, DANIDA, DFID, Finland MoFA, GTZ, Italy MoFA, Bilateral agencies JICA, Lux Dev, MCC, Netherlands MoFA, NORAD, SDC, Sida, USAID N=18 AECID, AFD Proparco, BIO, CAF, CDC, DCA USAID, EBRD, EIB, Development finance Finnfund, FMO, ICDF, IFC, IIC, KfW, MIF IADB, Norfund, OPIC, institutions (DFIs) SIFEM Private funders N=16 Foundations: Citi, Doen, Ford, Gates, Grameen, Grameen Jameel, Mastercard, MSDF, Rabobank, Stromme, Whole Foundations and NGOs Planet; NGOs: Cordaid, HIVOS, ICCO, Omidyar Network, Oxfam Novib Individual Investors n/a CGAP estimates* N=4 + CGAP ABP, ING, PGGM, TIAA Cref, and CGAP estimates* Institutional Investors estimates* *CGAP estimates are based on data from 90 MIIs. For more information on MIIs see http://www.cgap.org/p/site/c/template.rc/1.11.142715/
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