2006: The State of Microfinance Industry in Eastern Europe and Central Asia
Sep 2007, Pytkowska, J. & Rataj, M.

This report assesses the performance of the microfinance sector in Eastern Europe and Central Asia, following the regions’ transition to a market economy.

This report looks at the progress that microfinance has made in the regions of Eastern Europe and Central Asia (ECA), since the early 1990s when the regions began moving towards a market economy.

The report states that:

• Despite the decreased presence of state-owned banks and financial sector development, few commercial banks have shown a strategic interest in lending to micro and small enterprises,
• There are almost 6,000 institutions in the region that provide microfinance services, with a majority being credit unions located in Central and Eastern Europe (CEE),
• The four main types of organizations providing microfinance services to a wide range of clients are credit unions, NGOs/ non-bank financial institutions (NBFIs), microfinance banks and downscaled commercial banks.

The report assesses the financial performance of MFIs, stating that:

• Since the 1990s, MFI assets have shown an annual increase of over 40%, with major contributors being credit unions, downscaled banks, NGO/NBFIs and microfinance banks,
• Different institutions providing microfinance services have:
  
  • Different funding structures and access to both domestic and international funding sources,
  • Different source of equity: donor grants and earnings, shareholder capital, membership shares, etc,
  • Different sources of foreign exchange risk and a variety of risk mitigation techniques.
• NGO/NBFIs have been the most profitable institutional type.

The report concludes with a look at the social performance of NGOs/NBFIs.

Download this Document

Publisher(s):
Microfinance Center for CEE & NIS

About Us  |  Contact Us  |  Partners  |  Help  |  Site Map  |  Terms and Conditions  |  Privacy Policy  |  Manage Subscriptions

© CGAP 2010 ALL RIGHTS RESERVED