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The Premier Source for Microfinance Data and Analysis
© 2012, MIX and Sanabel. All rights reserved.
MIX and Sanabel Analysis of Key Trends
2012 Arab Region Regional Snapshot
April 2013
© 2012, MIX and Sanabel. All rights reserved.
2
Data Sources and Acronyms
Sources
Performance of Microfinance Institutions (MFIs)Funding Structure of MFIs
MIX Market MIX Market Funding Structure Data
Islamic Micro and Small Medium Enterprise (MSME) Finance Survey
A survey for the collection of data on Islamic microfinance in the Arab region was conducted by Sanabel, beginning from Q4 2011 – Q2 2012, in collaboration with CGAP and through funding from AfD.
Cross-Border Funders Investments CGAP Cross-Border Funder Survey
AcronymsECA Eastern Europe and Central Asia
EAP East Asia and the Pacific
LAC Latin America and the Caribbean
SA South Asia
SSA Sub-Saharan Africa
© 2012, MIX and Sanabel. All rights reserved.
3
Global Outreach and Scale
Access the Graph's data
MENA continues to be the smallest market in the terms of both borrower outreach and Gross Loan Portfolio.
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
SSA EAP ECA LAC MENA SA
0
10000000
20000000
30000000
40000000
50000000
60000000
0
10000000000
20000000000
30000000000
40000000000
50000000000
60000000000
Borrowers and Gross Loan Portfolio
Number of Active Borrowers Gross Loan Portfolio
© 2012, MIX and Sanabel. All rights reserved.
4
Outreach and Scale in MENA
Within the region, microfinance markets are in different stages of development with particularly Egypt and Morocco showing higher levels of outreach and scale compared to younger markets in Iraq, Sudan, and Syria.
Access the Graph's data
Egypt remains the largest market in the region in terms of borrowers, while Morocco is still the largest market in terms of portfolio.
Egyp
tIra
q
Jord
an
Leba
non
Moroc
co
Pale
stin
e
Suda
nSy
ria
Tuni
sia
Yem
en0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
0
100000000
200000000
300000000
400000000
500000000
600000000
700000000
800000000
900000000
1000000000
Borrowers and Gross Loan Portfolio of MENA countries
Number of Active Borrowers Gross Loan Portfolio
© 2012, MIX and Sanabel. All rights reserved.
5
Outreach and Scale in MENA
Despite some instability in the region, outreach of the microfinance sector remains consistent.
2009 2010 20110.0
500,000.0
1,000,000.0
1,500,000.0
2,000,000.0
2,500,000.0
3,000,000.0
0.0
500,000,000.0
1,000,000,000.0
1,500,000,000.0
2,000,000,000.0
2,500,000,000.0
3,000,000,000.0
Trends in Number of Borrowers and Gross Loan Portfolio in MENA
Number of active borrowers Gross Loan Portfolio
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
6
Outreach and Scale in MENA by Country
In fact, most of the region saw growth in outreach, with Egypt also showing recovery after the downturn in 2010 due to political volatility. Morocco experienced drop in loan portfolio primarily due to consolidation of bad debt as well as contracting outreach.
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
Egypt Iraq Jordan Lebanon Morocco Palestine Sudan Syria Tunisia Yemen
0
200000
400000
600000
800000
1000000
1200000
0
200000000
400000000
600000000
800000000
1000000000
1200000000
Trends in Borrowers and Gross Loan Portfolio
Number of Active Borrowers Gross Loan Portfolio
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
7
Average Loan Balance per Borrower – Regional Breakdown
MENA experiences low average loan balance per borrower , also when taking macroeconomic indicators into account. While this indicates MFIs in MENA target the low income market, a deeper dive in the region reveals a combination of income level among clients.
Average loan balance per borrower(weighted average)
Average loan balance per borrower/GNI per capita
(weighted average)
SSA EAP ECA LAC MENA SA0%
50%
100%
150%
200%
250%
300%
SSA EAP ECA LAC MENA SA$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
8
Average Loan Balance per Borrower – MENA Breakdown
While Iraq, Lebanon, and Palestine have the highest average loan balances and are the only ones above the regional average of $1100, Palestine is the only country with an average loan balance / GNI per capita greater than 50%.
While boasting the largest markets, Egypt and Morocco also have some of the lowest average loan balances per borrower.
Average loan balance per borrower(weighted average)
Average loan balance per borrower/GNI per capita
(weighted average)
Egyp
tIra
q
Jord
an
Leba
non
Moroc
co
Pale
stin
e
Suda
nSy
ria
Tuni
sia
Yem
en$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Average loan balance per borrowerMENA Average loan balance per borrower
Egyp
tIra
q
Jord
an
Leba
non
Moroc
co
Pale
stin
e
Suda
nSy
ria
Tuni
sia
Yem
en0%
50%
100%
150%
200%
250%
300%
Average loan balance per borrower / GNI per capitaMENA regional average loan balanace / GNI per capita
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
9
MENA in the Global Context
To view a dynamic version of this graph with more data, please click here. For more data on women borrowers, please click here.
Almost two-thirds of loans in MENA are to female borrowers.
The region has the 2nd lowest level of outreach to rural clients.
Corporate and SME lending remains minimal at 5% of MENA’s total portfolio.
Percent of female borrowers
© 2012, MIX and Sanabel. All rights reserved.
10
Funding through Debt
MENA has the highest capital-to-asset ratio and relatively low debt-to-equity ratio. This is explained by the fact that most countries in MENA are legally prohibited from collecting deposits, whereas deposits form a larger portion of funding for MFIs in other regions.
SSA EAP ECA LAC MENA SA0.0
2.0
4.0
6.0
8.0
10.0
12.0
0%
10%
20%
30%
40%
50%
60%
Regional Leverage and Capital / Asset ratio in 2011
Debt to equity ratio (weighted average)Capital/asset ratio (weighted average)
SSA EAP ECA LAC MENA SA0
20000000
40000000
60000000
80000000
100000000
120000000
140000000
160000000
180000000
Liabilities across the region
Borrowings Short-term financial liabilitiesDeposits
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
Country Dec 201109/11
Growth
Egypt$300 - $499
mln
Morocco$100 - $299
mln
Iraq $50 - $99mln
Tunisia $2 - $49 mln
Jordan $2 - $49 mln
Lebanon $2 - $49 mln West Bank & Gaza $2 - $49 mln
Yemen $2 - $49 mln
Syria $2 - $49 mln
Djibouti $2 - $49 mln
Algeria $2 - $49 mln
Iran < $2 mln
Commitments by Country* (as of Dec. 2011, and 2009/20011 Trend)
* Country allocation is available for 93% of MENA commitments
$1.1 bln of Cross-border Funding to MENA
Source: CGAP Cross-Border Funder Survey
© 2012, MIX and Sanabel. All rights reserved.
12
Funding Structure by Funder Type
While DFIs represent 19% of the funding sources globally, in MENA they account for only 2%. Financial Institutions serve as the main channel for committed funds in MENA, and they offer lower interest rates than DFIs.
DFI19%
Financial Institu-
tion32%
Fund22%
Gov-ern-ment8%
Other18%
Global Funding by Funder Type in 2011
DFI2%
Financial Institution
66%
Fund16%
Government13%
Other3%
MENA Funding by Funder Type in 2011
DFI
Finan
cial I
nstit
utio
nFu
nd
Gover
nmen
t
Other
0
80,000,000
160,000,000
240,000,000
320,000,000
400,000,000
0%
2%
4%
6%
8%
10%
Funding in MENA by Funder Type in 2011
Amount (USD), total Interest Rate (MENA)Interest Rate (Global average)
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
13
Efficiency and Profitability
MENA exhibits one of the lowest Financial Expense / Assets ratios globally and the second highest Personnel Expense / Assets ratio.
SSA EAP ECA LAC MENA SA0%
5%
10%
15%
20%
25%
30%
35%
Regional Efficiency and Profitability ratios
Administrative expense/ assetsFinancial expense/ assetsProvision for loan impairment/ assetsPersonnel expense/ assetsFinancial revenue/ assets
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
14
Efficiency and Profitability: Modest Returns
Despite the turmoil in the region, MENA exhibited a modest ROA.
SSA EAP ECA LAC MENA SA-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
Return on Assets in 2011
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
15
Efficiency and Profitability: Returns Levels by Country
A declining return on assets was primarily observed in the Arab Spring countries.
2009
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2011
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2011
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2011
2009
2010
2011
MENA Egypt Iraq Jordan Morocco Palestine Sudan Syria Tunisia Yemen
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Return on Assets
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
16
Portfolio Quality - deep dive in MENA
On average, most countries experienced an increase in Portfolio at Risk in 2011, particularly the countries associated with the Arab Spring. Over the course of 2011, Write Offs did not yet increase alongside the riskier portfolio.
2009
2010
2011
2009
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2011
2009
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2011
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2011
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2011
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2011
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2011
2009
2010
2011
2009
2010
2011
2009
2010
2011
MENA Egypt Iraq Jordan Lebanon Morocco Palestine Sudan Syria Tunisia Yemen
0%
2%
4%
6%
8%
10%
12%
14%
Trends in Write-off ratio and PAR > 30 days
Write-off ratio Portfolio at risk > 30 days
Access the Graph's data
© 2012, MIX and Sanabel. All rights reserved.
17
Islamic Microfinance Providers in the Arab countries
The data is based on a survey on Islamic microfinance in the Arab region conducted by Sanabel, beginning from Q4 2011 – Q2 2012, in collaboration with CGAP and through funding from AfD.
Data collected for FY 2010 from 36 MFIs from 10 Arab countries: 11 from Sudan, 7 from Palestine, 5 from Yemen, 4 from Iraq, 2 from Jordan, 2 from Lebanon, 1 from Syria, 1 from Egypt, 1 from Bahrain, and 1 from Saudi Arabia. The data was collected from both fully fledged Islamic Microfinance institutions as well as conventional MFIs with Islamic windows.
© 2012, MIX and Sanabel. All rights reserved.
18
Islamic MSME Providers’ Legal Type
Unlike conventional microfinance, almost half the Islamic microfinance providers are NGOs, while 24 percent of the microfinance providers surveyed were Non-Banking Financial Institutions, and 15 percent of microfinance providers surveyed were Commercial Banks.
48%
24%
15%
6%
3% 3%
Local Legal Charter
NGONBFICommercial bankMicrofinance BankGovernmental OrganizationCooperative
Sample Size: 36 MFIs
© 2012, MIX and Sanabel. All rights reserved.
19
Islamic Microfinance Providers by Country
As Islamic finance is the sole system applied in Sudan, Sudan is the country with the highest
number of participants in the survey, followed by Palestine.
Data of 30 MFIs that provided 2010 data; data set excludes Al Thiqa – Iraq, Al Kuriami – Yemen since they only provide Islamic SME products, Bank Al-Khartoum, Youth Microfinance institution, Gezira since they started microfinance operations in 2011, also the data set excludes Agriculture Bank- Sudan for not providing enough data on their portfolio.
CountryNumber of
MFIs
#of Clients
(sharia compliant
products )in 2010
Gross Financing Portfolio in USD
(sharia compliant
products )in 2010
Average Financing Balance in USD
(sharia compliant
products )in 2010
%of total Sharia
compliant product’s clients to total
borrowers in 2010
Bahrain 1 285 1,094,821 3,842 100%
Egypt 1 8,577 1,943,510 227 100%
Iraq 3 20,673 32,363,650 1,566 39%
Jordan 2 7,328 15,442,163 2,107 42%
Lebanon 2 87,637 163,407,427 1,865 78%
Palestine 7 3,289 11,427,706 3,475 36%
Saudi Arabia
1 4,889 6,000,000 1,227 100%
Sudan 8 66,883 60,983,588 912 100%
Syria 1 16,300 11,040,000 677 94%
Yemen 4 28,782 7,041,943 245 100%
© 2012, MIX and Sanabel. All rights reserved.
20
Islamic Microfinance Providers by Country
Lebanon recoded the highest share in both outreach and GLP with the Al Qard Al Hassan program recording 36% and 53%, respectively, followed by Sudan with 8 MFIs recording 27% and 20%, respectively.
Data of 30 MFIs that provided 2010 data; data set excludes Al Thiqa – Iraq, Al Kuriami – Yemen since they only provide Islamic SME products, Bank Al-Khartoum, Youth Microfinance institution, Gezira since they started microfinance operations in 2011, also the data set excludes Agriculture Bank- Sudan for not providing enough data on their portfolio.
Bahrain0%
Egypt1%
Iraq10%
Jordan5%
Lebanon53%
Pales-tine4%
Saudi Arabia
2%
Sudan20%
Syria4%
Yemen2%
Islamic Gross Financing Portfolio
Sample size: 30 MFIs
Bahrain0%
Egypt4%
Iraq8% Jordan
3%
Lebanon36%
Palestine1%
Saudi Arabia2%
Sudan27%
Syria7%
Yemen12%
Islamic Products' Number of Clients
Sample Size: 30 MFIs
© 2012, MIX and Sanabel. All rights reserved.
21
Average Financing Balance versus Average Financing Balance/GNI per Capita by Country in
2010
Saudi Arabia recorded the lowest average financing balance / GNI per capita with 8% followed by Egypt at 9%, while Palestine recorded the highest with 165%, followed by Sudan at 72%.
Bahrain Palestine Jordan Lebanon Iraq Saudi Arabia
Sudan Syria Yemen Egypt -
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200% 3,842
3,475
2,107 1,865
1,566
1,227
912 677
245 227 24%
165%
49%
20%
67%
8%
72%
25% 21%9%
Average Financing Balance in USD (Sharia Compliant Products)Average Financing Balance in USD (sharia compliant products)/GNI per CapitaSample Size: 30 MFIs
© 2012, MIX and Sanabel. All rights reserved.
22
About MIX
MIX is the premier source for objective, qualified and relevant microfinance performance data and analysis. Committed to strengthening financial inclusion and the microfinance sector by promoting transparency, MIX provides performance information on microfinance institutions (MFIs), funders, networks and service providers dedicated to serving the financial sector needs for low-income clients. MIX fulfills its mission through a variety of platforms.On MIX Market (www.mixmarket.org), we provide instant access to financial and social performance information covering approximately 2,000 MFIs around the world. Our publications, MicroBanking Bulletin and MIX Microfinance World, feature thorough and timely analysis based on qualified data and research. Incorporated in 2002, MIX is a non-profit organization headquartered in Washington, DC with regional offices in Azerbaijan, India, Morocco, and Peru.
About Sanabel
Sanabel - the Microfinance Network of Arab Countries - is the only and largest membership-driven regional microfinance network in the Arab region. Sanabel envisions all low income people in Arab countries with access to comprehensive financial services. In addition, Sanabel advocates for growth, innovation, best practices & standardization of the microfinance sector in Arab countries. Since establishment in 2002, Sanabel’s membership has grown from 14 members to 80 Arab MFIs by the end of 2010 (representing NGOs, non-bank financial institutions, international organizations, banks that provide direct lending, top organizations that provide in-direct lending, and local networks) and individuals from 13 different Arab countries as well as International Friends of the network.
About MIX and SANABEL
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