Cross-border funding of microfinance

Abstract

As of December 2009, cross-border funders reported commitments to microfinance1 of US$21.3 billion, reflecting a 17 percent increase (US$3 billion) over 2008 commitments. Although this rate of increase is lower than the prior year's 30 percent growth rate, cross-border funding is expected to continue growing. Of cross-border funders, public funders provide a larger share of commitments, though private funders are growing their commitments at a higher rate, with 2009 commitments one-third higher than 2008 commitments. In some markets, cross-border funding represents the lion's share of microfinance institutions' (MFIs') funding base. Yet, where institutions can mobilize deposits and where local capital markets exist, cross-border flows is likely to represent a small part of the picture. This focus note draws on data from Consultative Group to Assist the Poorest (CGAP's) annual surveys on cross-border funding (2009, 2010) to provide an overview of the microfinance funding landscape and trends in cross-border funding.