1. Cross-Border Funding for Microfinance Latin America and the Caribbean Results of the CGAP Cross-border Funding Surveys 2010
2. 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 firstname.lastname@example.org.
3. At a Glance Commitments to Microfinance for LAC as of December 2009: $4.7 billion* 32 Public Donors and Private Donors and Investors Investors (Foundations, Institutional and (Multilaterals, Bilaterals, DFIs) Retail Investors) $2.5 billion $2.2 billion 67 Microfinance $2.1 bln $0.4 bln Investment $2.1 bln $0.1 bln Intermediaries (MIIs) Apexes Apexes $2.5 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
4. High growth in commitments in 2009 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 had $4,724 million committed to LAC as of 2009, representing 22% of total cross-border funding to microfinance.• High growth in commitments, with a rate of 21% compared to 17% globally.• 32 public funders (15 bilateral and multilateral agencies and 17 development finance institutions – DFIs), 13 foundations/NGOs and 67 Microfinance Investment Intermediaries (MIIs) are active in LAC.• LAC is the region with the largest number of private investors, DFIs and MIIs.
5. Private funding close to balancing public funding 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 Funders Number of respondents: 61 and CGAP estimates based on 90 MIVs• Public funders provide 54% of total commitments to LAC, compared to 69% globally. Private funders (foundations, institutional investors and individual investors) account for 46%.• Private funding increased by 28% in 2009 (compared to 33% globally), while public funding increased by only 15% (compared to 12% globally).• Among public funders, bilateral agencies decreased their commitments by -5%, whereas the three multilateral agencies and the 17 DFIs increased their commitments by 3% and 20% respectively.
6. Focus on refinancing retail financial service providers 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 Building Number of respondents: 58 and CGAP estimates based on 90 MIVs• 91% of commitments to LAC are used to refinance retail financial service providers, directly or indirectly, compared to 88% globally.• $431 million are committed to capacity building in LAC. 80% of these funds are used to strengthen retail service providers; 20% are used at the market infrastructure and policy levels. Mexico represents more than 60% of capacity building funds to LAC, due to one large World Bank project.• Funding for on-lending increased by 23% in 2009, while funding for capacity building increased by only 1%.
7. Debt is by far the main instrument used by funders Commitments by Type of Commitments by Type of Direct Funding by Direct Funding by Instrument Funding (TOTAL) Funding (LAC) Instrument (TOTAL) (LAC) 4% 2% 4% 5% 12% 21% 5% Other Other 5% Guarantee 36% Guarantee 55% 45% 64% Grant Grant 76% 66% Equity Equity Debt Debt Direct Indirect Direct Indirect Number of respondents: 58 and CGAP estimates based on 90 MIVs• Only 36% of commitments to LAC is provided by funders directly or channeled through local governments, compared to 45% globally; 64% are channeled via intermediaries such as MIIs.• Debt remains the main financial instrument used by funders.• Funders committed $230 mln in grants, a third of which to associations, networks, and the rest directly to retail financial service providers. Grants represent 12% of direct investments, compared to 21% globally. Honduras, Haiti and Ecuador received at least a third of total grant funding to LAC.• Guarantees represent 5% of direct investments, compared to 4% globally, but have been decreasing in 2009 (-23% in direct investments).
8. 5 countries receive 60% of funding to LAC Commitments by Country as of Dec. 2009, and 2008/2009 Trend Country allocation is available for 42% of LAC commitments 2009 2008/2009 2009 2008/2009 Commitments Growth Commitments Growth Argentina $2 to 50 mln → Haiti $2 to 50 mln ↑ Belize $2 to 50 mln → Honduras $50 to 100 mln → Bolivia $100 to 300 mln ↑ Jamaica $2 to 50 mln ↓ Brazil $2 to 50 mln ↑ Mexico $300 to 500 mln ↓↓ Chile $50 to 100 mln → Nicaragua $100 to 300 mln ↓ Colombia $100 to 300 mln → Panama $2 to 50 mln → $2 to 50 mln $51 to 100 mln Costa Rica $2 to 50 mln ↑ Paraguay $50 to 100 mln → $101 to 300 mln Cuba $2 to 50 mln → Peru $300 to 500 mln ↑↑ $301 to 500 mln Dominican Republic $100 to 300 mln ↓ St. Kitts and Nevis <$2 mln → ↑↑ increases, more than 20 mln Ecuador $100 to 300 mln → St. Vincent <$2 mln → ↑ increases, 5 to 20 mln El Salvador $50 to 100 mln ↑ Suriname $2 to 50 mln ↑ → same or change less than 5 mln ↓ decreases, 5 to 20 mln Guatemala $2 to 50 mln ↓ Uruguay $2 to 50 mln → ↓↓ decreases, more than 20 mln Guyana $2 to 50 mln → Venezuela $2 to 50 mln → • Funders are active in 26 countries in LAC. • In 2008 and in 2009, Peru and Mexico represent more than a third of the funding committed to LAC; the top 5 countries (Peru, Mexico, Ecuador, Bolivia, Colombia) receive more than 60% of total funding to LAC.Country breakdown is available only for direct funding
9. Active Funders in LACTop 5 Funders in LAC Active Funders in LAC% of Commitments to LAC KfW 10% Foundations & NGOs Bilateral Agencies Microfinance Investment Intermediaries (MIIs) AECID 9% Citi Foundation AusAID Accion AIM GMF Group Planet MicroFund World Bank 6% Cordaid CIDA Accion Gateway GPMF 2005, 2006, 2008 Procredit Holding IFC 5% DOEN Foundation GTZ Alterfin Gray Ghost respA GMF MIF IADB 4% Ford Foundation Italy MoFA ASN-Novib Hivos-Triodos respA MF Gates foundation JICA BBVA CODESPA I&P respA MLF Grameen Foundation Lux Dev BOLD I Impulse Rural Impulse Hivos MCC BOLD II Incofin SIDI ICCO Netherlands MoFA BOMS I KCD Global SNS MasterCard Foundation Norad BOPEF KCD Latinamerika SNS MF II Omydiar Network SDC Consorzio Etimos LocFund St Honore Oxfam Novib Sida CRESUD Lux MDF Symbiotics DRF Rabobank Foundation USAID DBMDF MF Enhancement Facility Triodos FSF Whole Planet Foundation DBMF-1 MFLO-LC Triodos MF DID-Partnership MFLO-SubDebt Triodos-Doen Development Finance Institutions (DFIs) Dignity MicroAccess2007 Unitus EF AECID ICDF DMCF MicroCred Holding Wallberg GMF AFD Proparco IFC DWM MF MicroCredit XXEB BIO IIC ELF MicroVentures CAF KfW EMF MicroVentures SICAR CDC MIF IADB FIG MicroVest I Multilateral DCA USAID Norfund FINCA MF Minlam & UN Agencies EIB OPIC Finethic NICA EC Finnfund SIFEM GCMC Oikocredit IFAD FMO Global MF equity fund OTI World Bank
10. 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.
11. 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/
12. Advancing financial access for the world’s poor www.cgap.org www.microfinancegateway.org