Russia Microfinance Analysis and Benchmarking Trends Report 2008

This report is a joint effort between the Russian Microfinance Center (RMC) and the Microfinance Information Exchange, Inc. (MIX). It presents performance data from the MicroBanking Bulletin for 40 Russian MFIs benchmarked in 2007. The report presents positive trends in terms of:

• Return on equity, self-sufficiency and operational efficiency;
• MFIs ability to establish reasonable pricing policies, and manage their saving and loan products;
• MFI profitability, due to progressively lower cost of finance.

Recent problems with financial institutions' liquidity and sustainability in the international and Russian markets will undoubtedly influence the development of Russias microfinance industry. Overcoming the crisis will require greater efforts from MFIs in order to maintain savers confidence and prevent an increase in portfolio at risk. They will also have to face decreased access to foreign funding and therefore, turn to domestic funding sources like savings, investments and public funds.Finally, MFIs might be less affected by the financial crisis than banks by virtue of their more limited operations, absence of activity in the stock market and construction industry. They are also less dependent on foreign capital.