Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America

This report investigates the poverty outreach of 14 microfinance institutions (MFI) across six Latin American countries: Peru, Colombia, Bolivia, Ecuador, Guatemala, and Nicaragua. It uses information that these MFIs have collected in terms of pove...

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Main Author:	Crowther, Naomi
Format:	Working Paper
Language:	English en_US
Published:	International Finance Corporation, Washington, DC 2017
Subjects:	poverty outreach microfinance
Online Access:	http://documents.worldbank.org/curated/en/703131487137984230/Factors-influencing-poverty-outreach-among-microfinance-institutions-in-Latin-America http://hdl.handle.net/10986/26108

id	okr-10986-26108
recordtype	oai_dc
spelling	okr-10986-261082021-04-23T14:04:33Z Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America Crowther, Naomi poverty outreach microfinance This report investigates the poverty outreach of 14 microfinance institutions (MFI) across six Latin American countries: Peru, Colombia, Bolivia, Ecuador, Guatemala, and Nicaragua. It uses information that these MFIs have collected in terms of poverty likelihood using the Progress Out of Poverty Index (a.k.a. Simple Poverty Scorecard) supplemented by in-depth interviews with industry experts. The following is a summary of the report findings. Those who reach the highest percentage of poorer clients are the ones that focus on clients in regions with higher percentages of poor people. The report also surfaced two interlinked factors driving poverty outreach across some Latin American markets: competition and over-indebtedness. Increased banking saturation is changing the landscape of microfinance, pushing MFIs who do not explicitly target the poor to provide loans to poorer individuals. The wealthier the client of an MFI the larger the average loan size and number of loans that they receive, which is consistent with the MFIs’ financial sustainability. Across countries, MFIs reach the lowest percentages of poorer households in regions with lower population density and challenging geographies. The report also found significant correlations between the number of previous loans and the size of subsequent loans, but non-significant correlations between the percentage of poorer MFI clients in a region and the loan size. The report also triangulates information gleaned from MFI interviews to shed light on their behavior, such as the commercial strategies of these MFIs. Micro-level data was also used to understand the MFIs’ client profiles in terms of loan size and the frequency with which they receive loans. 2017-02-21T21:48:26Z 2017-02-21T21:48:26Z 2015-06-01 Working Paper http://documents.worldbank.org/curated/en/703131487137984230/Factors-influencing-poverty-outreach-among-microfinance-institutions-in-Latin-America http://hdl.handle.net/10986/26108 English en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo International Finance Corporation International Finance Corporation, Washington, DC Publications & Research Publications & Research :: Working Paper Latin America & Caribbean Bolivia Colombia Ecuador Guatemala Nicaragua Peru
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	poverty outreach microfinance
spellingShingle	poverty outreach microfinance Crowther, Naomi Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America
geographic_facet	Latin America & Caribbean Bolivia Colombia Ecuador Guatemala Nicaragua Peru
description	This report investigates the poverty outreach of 14 microfinance institutions (MFI) across six Latin American countries: Peru, Colombia, Bolivia, Ecuador, Guatemala, and Nicaragua. It uses information that these MFIs have collected in terms of poverty likelihood using the Progress Out of Poverty Index (a.k.a. Simple Poverty Scorecard) supplemented by in-depth interviews with industry experts. The following is a summary of the report findings. Those who reach the highest percentage of poorer clients are the ones that focus on clients in regions with higher percentages of poor people. The report also surfaced two interlinked factors driving poverty outreach across some Latin American markets: competition and over-indebtedness. Increased banking saturation is changing the landscape of microfinance, pushing MFIs who do not explicitly target the poor to provide loans to poorer individuals. The wealthier the client of an MFI the larger the average loan size and number of loans that they receive, which is consistent with the MFIs’ financial sustainability. Across countries, MFIs reach the lowest percentages of poorer households in regions with lower population density and challenging geographies. The report also found significant correlations between the number of previous loans and the size of subsequent loans, but non-significant correlations between the percentage of poorer MFI clients in a region and the loan size. The report also triangulates information gleaned from MFI interviews to shed light on their behavior, such as the commercial strategies of these MFIs. Micro-level data was also used to understand the MFIs’ client profiles in terms of loan size and the frequency with which they receive loans.
format	Working Paper
author	Crowther, Naomi
author_facet	Crowther, Naomi
author_sort	Crowther, Naomi
title	Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America
title_short	Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America
title_full	Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America
title_fullStr	Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America
title_full_unstemmed	Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America
title_sort	factors influencing poverty outreach among microfinance institutions in latin america
publisher	International Finance Corporation, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/703131487137984230/Factors-influencing-poverty-outreach-among-microfinance-institutions-in-Latin-America http://hdl.handle.net/10986/26108
_version_	1764460975581298688

Factors Influencing Poverty Outreach Among Microfinance Institutions in Latin America

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