Microfinance Investment in Sub-Saharan Africa : Turning Opportunities into Reality
Yet despite healthy economic prospects, the region has the lowest share of banked households in the world (12 percent) and the highest share of poor people, with 50 percent of the population living on $1.25 a day or less (Consultative Group to Assi...
| Main Authors: | , , |
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| Format: | Brief |
| Language: | English |
| Published: |
Washington, DC: World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/06/16542046/microfinance-investment-sub-saharan-africa-turning-opportunities-reality http://hdl.handle.net/10986/9440 |
| Summary: | Yet despite healthy economic prospects,
the region has the lowest share of banked households in the
world (12 percent) and the highest share of poor people,
with 50 percent of the population living on $1.25 a day or
less (Consultative Group to Assist the Poor, or CGAP and
World Bank 2010). More work needs to be done to expand
financial access, and many governments and international
funders are keen to contribute. Equity and debt capital
continues to be important in developing financial services
for low-income populations in the region. However, local
equity is not available in most countries, and local debt
funding is scarce. Sub-Saharan Africa (SSA) microfinance
relies heavily on deposit funding, mostly composed of
short-term deposits, while many smaller institutions cannot
attract sufficient deposits to finance growth. The region
received 11 percent of global microfinance funding
commitments in 2010.4 In terms of cross-border investment,
it received among the lowest levels in the world, $1 billion
out of a total of $13 billion as of December 2010 (Reille,
Forster, and Rozas 2011). This brief examines public and
private foreign investment in SSA microfinance retailers,
and the key challenges that limit investment. The findings
are based on CGAP data on cross-border funding flows,
publicly available resources, and interviews with more than
30 investors and other stakeholders conducted in the first
quarter of 2012. |
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