Microfinance Market

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Microfinance Market Size, Share, Analysis, Regional Outlook,
Competitive Strategies and Forescast to 2025 | Hexa Research
“Global microfinance market is expected to grow at a steady rate over
the forecast period (2017 to 2025)”
18 February 2019, the global Microfinance Market is anticipated to witness steady growth over the forecast
period (2017 to 2025). This growth can be attributed to rapid rise in number of small and medium enterprises
(SMEs). Government initiatives to improve credit lines of people from lower income group s is projected to further
fuel growth. Lower interest rates compared to other finance options are likely to positively influence adoption of
these services. Rise in efforts to provide high quality financial services to socially marginalized people is also one
of the key driving factors. Better risk management practices with rise in supply chain activities of microinsurance
companies can also create growth opportunities in future.
Along with financial products, microfinance also offers options such as fund transfers, payments, insurance, and
savings. Crucial role of microenterprises in economic development is projected to propel market expansion.
Microfinance institutes have evolved from conventional non-governmental organizations (NGOs) to specialized
banks. To put this in perspective, some NGOs and non-profit institutions are transforming into profit-seeking
institutions to gain market reach and sustainability. Citi Finance and GE Finance, among other consumer finance
companies, are joining them. Consumer retailers are emerging as consumer lenders. Examples of such lenders
include Tesco and Wal-Mart. Such activities are anticipated to create collaboration and expansion avenues in the
market.
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Technological advancements such as rising adoption of automated portfolio monitoring sol utions to gather more
information about client credit flow can further drive the market for microfinance. Factors such as challenges in
credit assessment may hinder this growth to an extent in the forthcoming years. Having said that, rising
globalization and its positive impact on microfinance institutions has opened new avenues for them in the form of
partnerships, foreign investments, strategic alliances, and global trade. All these factors are anticipated to bode
well for market growth. Rise in initiatives to spread awareness regarding advantages of these institutions, coupled
with efforts to empower marginalized population, may further create business opportunities in the forthcoming
years.
Banks and non-banks are some of the major types of institutions active in microfinancing. The banks segment is
projected to remain steady in future. Low interest rates are anticipated to bode well for the growth of banking
institutes in the coming years. However, reluctance of banks in providing funds to SMEs is antic ipated to boost the
non-banking sector. Focus on non-bank financial resources such as mutual funds can also drive the expansion of
this segment in future. Some of the significant end-use sectors are household finance, agriculture, services, and
manufacturing. The services sector is likely to witness significant rise in terms of loans granted. Agriculture and
household sectors are also anticipated to witness substantial growth in the forthcoming years.
Asia Pacific, North America, Europe, and Middle East and Africa are the major regional markets for microfinance.
Asia Pacific is projected to remain one of the leading regions over the forecast period, driven by impressive
growth in countries such as India. It is poised to hold a significant market share and w itness healthy expansion in
terms of CAGR. Demand from countries such as China, Japan, South Korea, and Taiwan is projected to give the
region a major fillip. Rapid industrialization, consumer awareness, and high demand for services and goods can
propel regional demand. Emergence of key Islamic banks and financial services can further drive growth. India is
expected to be a key regional market in Asia Pacific.
Fundación de la Mujer, Banco do Nordeste, ASA International, Bandhan Financial Services, Wells Fa rgo, Access
Bank plc, Fundación WWB Colombia, Al Amana Microfinance, and Albaraka are some of the companies operating
in the microfinance market. Partnerships and regional expansions are among chief business strategies adopted by
many companies. Global collaborations, rising standardization, and loan approvals can offer advantages to these
institutions. Efforts from banks to empower socially marginalized sectors may create business avenues. For
instance, as per the cooperation protocol signed by the Egyptian Arab Land Bank (EALB) and Tamweely
Microfinance in November 2018, the latter will be awarded EGP 50m during primary phase. These funds are
anticipated to be used for underprivileged women and the most disadvantaged people.
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The global microfinance market is anticipated to witness steady growth over the forecast period

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