Global microfinance markets to grow by 10-15%
responsAbility publishes “Microfinance Market Outlook 2016”
Zurich, 24 November 2015 – Global microfinance markets are expected to grow by 10-15% in 2016, although growth rates will differ markedly between regions. This is the key finding of the newly released responsAbility Microfinance Market Outlook 2016. The reference publication’s sixth edition presents an in-depth and concise overview of the expected developments in the microfinance industry over the next year.
Established in Zurich in 2003, the Swiss asset manager responsAbility today has assets under management of USD 3 billion invested in more than 500 companies in 93 developing countries through 12 different investment vehicles. Among other investments, responsAbility-led funds manage 18% of global private investments in microfinance – that is more than half of private microfinance investments managed from Switzerland.
Since 2010, responsAbility’s annual Microfinance Market Outlook has tracked the development of the global microfinance industry and made forecasts for the next 12-14 months. Drawing on a global network of microfinance experts from all major markets, the publication combines these specialists’ views with macroeconomic key figures and the comprehensive data collected through responsAbility’s business activities.¹
On average, global microfinance markets are expected to grow by 10-15% in 2016 – although growth rates will differ markedly between regions. Led by India and Cambodia, markets in the Asia-Pacific region are expected to grow by an average of 30%. In contrast, markets in Central Asia and the Caucasus region are suffering from their close ties to the stagnant Russian economy. Low commodity prices are putting additional pressure on oil-exporting countries like Azerbaijan and Kazakhstan, causing microfinance growth rates to slow to 0-10% in this region. Markets in Sub-sahara Africa are expected to continue to grow at above-average rates of 15-20%, followed by the Middle East and North Africa (10-15%), Eastern Europe (10%) and Latin America (5-10%).
responsAbility’s expert interviews unveiled the following key trends in the microfinance industry: technological progress, more stringent regulatory frameworks especially in less mature microfinance markets and greater diversification in the funding mix of microfinance institutions. As a consequence of progressing financial sector development in these markets, microfinance institutions can increasingly rely on financing from local banks or savings deposits alongside loans from international lenders. However, 50% of interviewed experts expect microfinance investment vehicles to continue to gain importance as a source of funding over the next three years.
Commenting on the future development of the microfinance market, Rochus Mommartz, member of the Management Board of responsAbility, said: “Funding penetration in most microfinance markets lags far behind that of developed economies. As a result, catch-up growth is likely to continue over the next few years and produce attractive new investment opportunities for the private sector.”
¹ See also: Symbiotics, “2015 Microfinance Investment Vehicles Survey. Market Data & Peer Group Analysis”, September 2015
responsAbility Investments AG
Ulli Janett, Media Relations
Telefon: +41 44 250 67 15
E-mail: ulli.janett [at] responsAbility.com
About responsAbility Investments AG
responsAbility Investments AG is one of the world’s leading asset managers in the field of development investments and offers professionally managed investment solutions to both private and institutional investors. The company supplies debt and equity financing to non-listed firms in emerging economies and developing countries.
responsAbility currently has USD 3 billion of assets under management invested in over 500 companies in 93 countries. Founded in 2003, the company is headquartered in Zurich and has local offices in Bangkok, Hong Kong, Lima, Luxembourg, Mumbai, Nairobi, Oslo and Paris. Its shareholders include a number of reputable institutions in the Swiss financial market and its own employees. responsAbility is regulated by the Swiss Financial Market Supervisory Authority FINMA.