IDB’s Report Concludes that Microfinance Outreach has Increased Immensely in Lat...

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Jan 2007
Latin America & Caribbean , January, 23 2007 - The success attained by microfinance institutions in recent years, has greatly expanded the outreach of the financial system to millions of households in Latin America and the Caribbean. However, although previous measurements of success have been made on a general level, the enclosed report by the Inter-American Development Bank adequately explores the magnitude of the microfinance market in Latin America and the Caribbean.

The countries evaluated in IDB’s report include Nicaragua, Ecuador, Bolivia, Peru, Guatemala, Chile, Honduras, Dominican Republic, Mexico, Panama, Costa Rica, El Salvador, Guyana, Colombia, Paraguay, Jamaica, Uruguay, Venezuela, Brazil, Argentina, Haiti, Barbados, and Trinidad & Tobago.  The purpose of this report is to offer an updated snapshot of access to financial services in Latin America and the Caribbean. For example, through the use of institutional as well as household survey data, the report shows that, about 6.4 percent of all households have access to microfinance services which would amount to a total of 8 million households.  From this, approximately 4.5 million households are connected to a micro-enterprise.  When we multiply this figure (4.5 million) by the average number of loans per household (1.2) the result are 9.6 million loans for all households and 5.4 million loans for household with micro-enterprises. 

In addition, the report confirms that microfinance is doing well and remains strong. For instance, in a 2001 inventory, the total number of microfinance borrowers was 1.8 million, whereas now it is close to the 6 million mark. Also, based on IDB’s report, a huge potential market still exists for microfinance and estimates indicate that close to 67 million households in the region rely on income from micro-enterprise activities.



 

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