Since 1998, RESULTS’ partner organisation the Microcredit Summit Campaign have published an annual review of microfinance across the globe. This week saw the launch of the 2013 edition using data from 2011, which found that for the first time since the inception of the Campaign the number of people making use of microfinance services has actually become smaller from year to year.
This reduction in numbers was largely the result of a contraction in the Indian microfinance sector following the Andhra Pradesh crisis of 2010, but the report also paints a complex picture of the different forces influencing the progress of financial inclusion around the world.
In many parts of the world, changing donor/investor attitudes and other factors reduced the funding that was available to microfinance institutions; a situation that was compounded by the global financial crisis. The increasingly commercial and profit-oriented nature of some microcredit institutions has also created other issues as institutions lose their incentive to seek out poorer and more remote (and thus less profitable) clients and communities.
The report also contains interesting insights and expert interviews on the benefits of group lending programmes for fostering social solidarity, an exploration of the potential benefits of mobile banking for expanding microfinance outreach and a psychological study of American university students that goes some way to explaining why vulnerable people in developing countries are so susceptible to overindebtedness.
The complete report is available here.
