2012 MENA Regional Snapshot


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  • Question for Sanabel:Can we shed light on whytherehasn’t been growth? Coulditbethattherehasn’t been growth due to politcalinstability, but simultaneouslyMFI’s are not losingexisiting clients, thusleading to stabilityshown?
  • QuestionforSanabel:Anyexplanationwhythelargestmarkets (Egypt, Morocco) saw a droporinsability in growth, butthesmallermarketsgrew?
  • QuestionforSanabel:Anyadditionalexplanationtoaddabouttherelativelylowaverage loan balance (target market?, immaturity of market? Other?)?
  • http://public.tableausoftware.com/views/ECAmicrofinanceclients/MENAclients?:embed=y
  • Question to Sanabel:1. Do we know whyDFIs are the onlyonesthat charge MENA MFIs more than globalaverage? 2. Can wesaythatlowerinterest rates for MENA for differentfunder types is due to confessionnal rates? And if thisisso, do we have any info on whoprovidesthem? If thisis not the case,instability in the regionis not reflected in the rates – do we have anyexplanationwhy?
  • Question for Sanabel:Anyreasonbehind high personnel cost?
  • Question for Sanabel:Do we see any linkages between Arab spring countries and ROA trends? Perhaps somewhere in this report we should list the Arab spring countries…
  • http://sharepoint.themix.org/analysts/sanabel/Shared%20Documents/Analysis/2011/Post%20Revolution_Data_Final.xls
  • http://sharepoint.themix.org/analysts/sanabel/Shared%20Documents/Analysis/2011/Post%20Revolution_Data_Final.xls
  • http://sharepoint.themix.org/analysts/sanabel/Shared%20Documents/Analysis/2011/Post%20Revolution_Data_Final.xls
  • Question for Sanabel:Can you please define what is Average financing Balance? Balance per borrower? Debt per client? Can weexplainthat AFB is not the same as ALB. Can wealsoexplainwhere the data came from?
  • 2012 MENA Regional Snapshot

    1. 1. The Premier Source for MicrofinanceData and Analysis© 2012, MIX and Sanabel. All rights reserved.MIX and Sanabel Analysis of Key Trends2012 Arab RegionRegional SnapshotApril 2013
    2. 2. © 2012, MIX and Sanabel. All rights reserved.2Data Sources and AcronymsSourcesPerformance of MicrofinanceInstitutions (MFIs)Funding Structure of MFIsMIX MarketMIX Market Funding Structure DataIslamic Micro and Small MediumEnterprise (MSME) Finance SurveyA survey for the collection of data on Islamic microfinance in theArab region was conducted by Sanabel, beginning from Q4 2011 –Q2 2012, in collaboration with CGAP and through funding fromAfD.Cross-Border Funders Investments CGAP Cross-Border Funder SurveyAcronymsECA Eastern Europe and Central AsiaEAP East Asia and the PacificLAC Latin America and the CaribbeanSA South AsiaSSA Sub-Saharan Africa
    3. 3. © 2012, MIX and Sanabel. All rights reserved.3Global Outreach and ScaleAccess the Graphs dataMENA continues to be the smallest market in the terms of both borrower outreachand Gross Loan Portfolio.010203040506001020304050602009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011 2009 2010 2011SSA EAP ECA LAC MENA SALoanPortfolio(Billions,USD)Borrowers(Millions)Borrowers and Gross Loan PortfolioNumber of Active Borrowers Gross Loan Portfolio
    4. 4. © 2012, MIX and Sanabel. All rights reserved.4Outreach and Scale in MENAWithin theregion, microfinancemarkets are in differentstages of developmentwith particularly Egyptand Morocco showinghigher levels of outreachand scale compared toyounger markets inIraq, Sudan, and Syria.Access the Graphs dataEgypt remains the largestmarket in the region interms of borrowers, whileMorocco is still the largestmarket in terms ofportfolio.0100200300400500600700800900100001002003004005006007008009001000LoanPortfolio(Millions,USD)Borrowers(Thousands)Borrowers and Gross Loan Portfolio of MENA countriesNumber of Active Borrowers Gross Loan Portfolio
    5. 5. © 2012, MIX and Sanabel. All rights reserved.5Outreach and Scale in MENADespite some instability in the region, outreach of the microfinance sector remainsconsistent. 2010 2011LoanPortfolio(Billions,USD)Borrowers(Millions)Trends in Number of Borrowers and Gross Loan Portfolio in MENANumber of active borrowers Gross Loan PortfolioAccess the Graphs data
    6. 6. © 2012, MIX and Sanabel. All rights reserved.6Outreach and Scale in MENA by CountryIn fact, most of the region saw growth in outreach, with Egypt also showing recoveryafter the downturn in 2010 due to political volatility. Morocco experienced drop in loanportfolio primarily due to consolidation of bad debt as well as contracting outreach. Iraq Jordan Lebanon Morocco Palestine Sudan Syria Tunisia YemenLoanPortfolio(Billions,USD)Borrowers(Millions)Trends in Borrowers and Gross Loan PortfolioNumber of Active Borrowers Gross Loan PortfolioAccess the Graphs data
    7. 7. © 2012, MIX and Sanabel. All rights reserved.7Average Loan Balance per Borrower –Regional BreakdownMENA experiences low average loan balance per borrower , also when taking macroeconomicindicators into account. While this indicates MFIs in MENA target the low income market, a deeperdive in the region reveals a combination of income level among clients.Average loan balance per borrower(weighted average)Average loan balance per borrower/GNIper capita(weighted average)0%50%100%150%200%250%300%SSA EAP ECA LAC MENA SA$0$2,000$4,000$6,000$8,000$10,000$12,000$14,000SSA EAP ECA LAC MENA SAAccess the Graphs data
    8. 8. © 2012, MIX and Sanabel. All rights reserved.8Average Loan Balance per Borrower –MENA BreakdownWhile Iraq, Lebanon, and Palestine have the highest average loan balances and are the only onesabove the regional average of $1100, Palestine is the only country with an average loan balance /GNI per capita greater than 50%.While boasting the largest markets, Egypt and Morocco also have some of the lowest average loanbalances per borrower.Average loan balance per borrower(weighted average)Average loan balance per borrower/GNIper capita(weighted average)$0$500$1,000$1,500$2,000$2,500$3,000$3,500Average loan balance per borrowerMENA Average loan balance per borrower0%50%100%150%200%250%300%Average loan balance per borrower / GNI per capitaMENA regional average loan balanace / GNI per capitaAccess the Graphs data
    9. 9. © 2012, MIX and Sanabel. All rights reserved.9MENA in the Global ContextTo view a dynamic version of this graph with more data, please click here.For more data on women borrowers, please click here.Almost two-thirds of loansin MENA are to femaleborrowers.The region has the 2ndlowest level of outreachto rural clients.Corporate and SMElending remains minimal at5% of MENA’s totalportfolio.
    10. 10. © 2012, MIX and Sanabel. All rights reserved.10Funding through DebtMENA has the highest capital-to-asset ratio and relatively low debt-to-equity ratio. This isexplained by the fact that most countries in MENA are legally prohibited from collectingdeposits, whereas deposits form a larger portion of funding for MFIs in other regions.0%10%20%30%40%50%60% EAP ECA LAC MENA SARegional Leverage and Capital / Assetratio in 2011Debt to equity ratio (weighted average)Capital/asset ratio (weighted average)020406080100120140160180SSA EAP ECA LAC MENA SAMillions(USD)Liabilities across the regionBorrowings Short-term financial liabilities DepositsAccess the Graphs data
    11. 11. © 2012, MIX and Sanabel. All rights reserved.Country Dec 2011 09/11 GrowthEgypt $300 - $499 mln Morocco $100 - $299 mln Iraq $50 - $99mln Tunisia $2 - $49 mln Jordan $2 - $49 mln Lebanon $2 - $49 mln West Bank & Gaza $2 - $49 mln Yemen $2 - $49 mln Syria $2 - $49 mln Djibouti $2 - $49 mln Algeria $2 - $49 mln Iran < $2 mln Commitments by Country*(as of Dec. 2011, and 2009/20011 Trend)* Country allocation is available for 93% of MENA commitments$1.1 bln of Cross-border Funding to MENASource: CGAP Cross-Border Funder Survey
    12. 12. © 2012, MIX and Sanabel. All rights reserved.12Funding Structure by Funder TypeWhile DFIs represent 19% of the funding sources globally, in MENA they account for only 2%. FinancialInstitutions serve as the main channel for committed funds in MENA, and they offer lower interest ratesthan DFIs.DFI19%FinancialInstitution32%Fund22%Government9% Other18%Global Funding by Funder Type in2011DFI2%FinancialInstitution66%Fund16%Government13%Other3%MENA Funding by Funder Type in20110%2%4%6%8%10%080160240320400DFI FinancialInstitutionFund Government OtherFunding(Millions,USD)Funding in MENA by Funder Type in 2011Amount (USD), total Interest Rate (MENA) Interest Rate (Global average)Access the Graphs data
    13. 13. © 2012, MIX and Sanabel. All rights reserved.13Efficiency and ProfitabilityMENA exhibits one of the lowest Financial Expense / Assets ratios globally and the secondhighest Personnel Expense / Assets ratio.0%5%10%15%20%25%30%35%SSA EAP ECA LAC MENA SARegional Efficiency and Profitability ratiosAdministrative expense/ assetsFinancial expense/ assetsProvision for loan impairment/ assetsPersonnel expense/ assetsFinancial revenue/ assetsAccess the Graphs data
    14. 14. © 2012, MIX and Sanabel. All rights reserved.14Efficiency and Profitability: Modest ReturnsDespite the turmoil in the region, MENA exhibited a modest ROA.-5%-4%-3%-2%-1%0%1%2%3%4%5%SSA EAP ECA LAC MENA SAReturn on Assets in 2011Access the Graphs data
    15. 15. © 2012, MIX and Sanabel. All rights reserved.15Efficiency and Profitability: Returns Levels by CountryA declining return on assets was primarily observed in the Arab Spring countries.-4.00%-2.00%0.00%2.00%4.00%6.00%8.00%10.00%12.00%200920102011200920102011200920102011200920102011200920102011200920102011200920102011200920102011200920102011200920102011MENA Egypt Iraq Jordan Morocco Palestine Sudan Syria Tunisia YemenReturn on AssetsAccess the Graphs data
    16. 16. © 2012, MIX and Sanabel. All rights reserved.16Portfolio Quality - deep dive in MENAOn average, most countries experienced an increase in Portfolio at Risk in2011, particularly the countries associated with the Arab Spring. Over the course of2011, Write Offs did not yet increase alongside the riskier portfolio.0%2%4%6%8%10%12%14%200920102011200920102011200920102011200920102011200920102011200920102011200920102011200920102011200920102011200920102011200920102011MENA Egypt Iraq Jordan Lebanon Morocco Palestine Sudan Syria Tunisia YemenTrends in Write-off ratio and PAR > 30 daysWrite-off ratio Portfolio at risk > 30 daysAccess the Graphs data
    17. 17. © 2012, MIX and Sanabel. All rights reserved.17Islamic Microfinance Providers in the Arab countriesThe data is based on a survey on Islamic microfinance in theArab region conducted by Sanabel, beginning from Q4 2011 –Q2 2012, in collaboration with CGAP and through fundingfrom AfD.Data collected for FY 2010 from 36 MFIs from 10 Arabcountries: 11 from Sudan, 7 from Palestine, 5 from Yemen, 4from Iraq, 2 from Jordan, 2 from Lebanon, 1 from Syria, 1from Egypt, 1 from Bahrain, and 1 from Saudi Arabia. Thedata was collected from both fully fledged IslamicMicrofinance institutions as well as conventional MFIs withIslamic windows.
    18. 18. © 2012, MIX and Sanabel. All rights reserved.18Islamic MSME Providers’ Legal TypeUnlike conventional microfinance, almost half the Islamic microfinance providers are NGOs, while 24percent of the microfinance providers surveyed were Non-Banking Financial Institutions, and 15percent of microfinance providers surveyed were Commercial Banks.49%24%15%6%3% 3%Local Legal CharterNGONBFICommercial bankMicrofinance BankGovernmental OrganizationCooperativeSample Size: 36 MFIs
    19. 19. © 2012, MIX and Sanabel. All rights reserved.19Islamic Microfinance Providers by CountryAs Islamic finance is the sole system applied in Sudan, Sudan is the country with the highestnumber of participants in the survey, followed by Palestine.Data of 30 MFIs that provided 2010 data; data set excludes Al Thiqa – Iraq, Al Kuriami – Yemen since they only provide Islamic SME products, Bank Al-Khartoum, Youth Microfinanceinstitution, Gezira since they started microfinance operations in 2011, also the data set excludes Agriculture Bank- Sudan for not providing enough data on their portfolio.CountryNumber ofMFIs# of Clients(sharia compliantproducts) in 2010Gross FinancingPortfolio in USD(sharia compliantproducts) in 2010Average Financing Balancein USD(sharia compliantproducts) in 2010% of total Sharia compliantproduct’s clients to totalborrowers in 2010Bahrain 1 285 1,094,821 3,842 100%Egypt 1 8,577 1,943,510 227 100%Iraq 3 20,673 32,363,650 1,566 39%Jordan 2 7,328 15,442,163 2,107 42%Lebanon 2 87,637 163,407,427 1,865 78%Palestine 7 3,289 11,427,706 3,475 36%SaudiArabia1 4,889 6,000,000 1,227 100%Sudan 8 66,883 60,983,588 912 100%Syria 1 16,300 11,040,000 677 94%Yemen 4 28,782 7,041,943 245 100%
    20. 20. © 2012, MIX and Sanabel. All rights reserved.20Islamic Microfinance Providers by CountryLebanon recoded the highest share in both outreach and GLP with the Al Qard Al Hassan programrecording 36% and 53%, respectively, followed by Sudan with 8 MFIs recording 27% and 20%,respectively.Data of 30 MFIs that provided 2010 data; data set excludes Al Thiqa – Iraq, Al Kuriami – Yemen since they only provide Islamic SME products, Bank Al-Khartoum, Youth Microfinanceinstitution, Gezira since they started microfinance operations in 2011, also the data set excludes Agriculture Bank- Sudan for not providing enough data on their portfolio.Bahrain0%Egypt1%Iraq10%Jordan5%Lebanon53%Palestine4%Saudi Arabia2%Sudan20%Syria3%Yemen2%Islamic Gross Financing PortfolioSample size: 30 MFIsBahrain0%Egypt4%Iraq8%Jordan3%Lebanon36%Palestine1%Saudi Arabia2%Sudan27%Syria7% Yemen12%Islamic Products Number of ClientsSample Size: 30 MFIs
    21. 21. © 2012, MIX and Sanabel. All rights reserved.21Average Financing Balance versus Average FinancingBalance/GNI per Capita by Country in 2010Saudi Arabia recorded the lowest average financing balance / GNI per capita with 8%followed by Egypt at 9%, while Palestine recorded the highest with 165%, followed bySudan at 72%.3,8423,4752,1071,8651,5661,227912677245 22724%165%49%20%67%8%72%25% 21%9%0%20%40%60%80%100%120%140%160%180%200%-5001,0001,5002,0002,5003,0003,5004,000Bahrain Palestine Jordan Lebanon Iraq SaudiArabiaSudan Syria Yemen EgyptAverage Financing Balance in USD (Sharia Compliant Products)Average Financing Balance in USD (sharia compliant products)/GNI per CapitaSample Size: 30 MFIs
    22. 22. © 2012, MIX and Sanabel. All rights reserved.About MIXMIX is the premier source for objective, qualifiedand relevant microfinance performance data andanalysis. Committed to strengthening financialinclusion and the microfinance sector bypromoting transparency, MIX provides performanceinformation on microfinance institutions(MFIs), funders, networks and service providersdedicated to serving the financial sector needs forlow-income clients. MIX fulfills its mission througha variety of platforms.On MIX Market (www.mixmarket.org), we provideinstant access to financial and social performanceinformation covering approximately 2,000 MFIsaround the world. Our publications, MicroBankingBulletin and MIX Microfinance World, featurethorough and timely analysis based on qualifieddata and research. Incorporated in 2002, MIX is anon-profit organization headquartered inWashington, DC with regional offices inAzerbaijan, India, Morocco, and Peru.About SanabelSanabel - the Microfinance Network of ArabCountries - is the only and largest membership-driven regional microfinance network in the Arabregion. Sanabel envisions all low income people inArab countries with access to comprehensivefinancial services. In addition, Sanabel advocatesfor growth, innovation, best practices &standardization of the microfinance sector in Arabcountries.Since establishment in 2002, Sanabel’s membershiphas grown from 14 members to 80 Arab MFIs by theend of 2010 (representing NGOs, non-bankfinancial institutions, internationalorganizations, banks that provide directlending, top organizations that provide in-directlending, and local networks) and individuals from13 different Arab countries as well as InternationalFriends of the network.22About MIX and SANABEL
    23. 23. © 2012, MIX and Sanabel. All rights reserved.MIX partners with a dedicated group of industry leaders:MIX Global and Project Partners23
    24. 24. © 2012, MIX and Sanabel. All rights reserved.Visit us on the Web:www.themix.org www.mixmarket.orgContact us: info@themix.orgInterested in learning more about MIX?Sign up to receive our free e-mailnewsletters!Find us on FacebookFollow us on Twitter: @mix_marketRegional Offices:Baku, Azerbaijan44 J. Jabbarli st. Caspian Plaza I, 5th Floor,Baku, AzerbaijanLima, PeruJirón León Velarde 333 Lince, Lima 14, PerúDakar, SenegalVilla n°4, rue YF-632, cité Ablaye ThiamOuest-Foire, Dakar-SénégalHyderabad, IndiaRoad #12, Landmark Building, 5th Floor,Banjara Hills, Hyderabad 500034, IndiaMicrofinance Information Exchange24Headquarters:1901 Pennsylvania Ave., NW, Suite 307Washington, D.C. 20006 USA