Lending by microfinance institutions in Latin America and the Caribbean grew at its fastest pace in four years as stronger economic growth fueled demand for credit among low-income families and microentrepreneurs in the region.
The loan portfolio of microfinance institutions in the region rose 23 percent last year to $15.2 billion from $12.3 billion, according to new data released by the Multilateral Investment Fund (MIF), a member of the IDB Group.
“While we observe disparities among countries, the microfinance industry in our region continues to thrive and seems to go back to pre-crisis growth levels,’’ said Paola A. Pedroza, responsible for the survey.
There are currently nearly 700 microfinance institutions with available data operating in Latin America and the Caribbean. These institutions added 2 million new customers in 2010, serving a total of 12.5 million clients, according to the data released during the XIV Inter-American Forum on Microenterprise (Foromic 2011) in San José, Costa Rica.
Mexico has the biggest market for microfinance, with 3.1 million customers, followed by Peru with 2.2 million and Brazil with 1.9 million. In terms of loan portfolio, Peru tops the ranking with $4.9 billion in microloans, followed by Colombia, with a portfolio of $1.8 billion. Brazil is in third with a total of $1.6 billion in microloans.
The penetration of the microfinance industry in Latin America and the Caribbean remains unequal despite experiencing sustained growth. Estimated levels of penetration for countries such as Bolivia, Nicaragua, Peru and Mexico exceed 30 percent, while in countries such as Paraguay, Argentina, Panama and Brazil it represents less than 10 percent.
The average loan size in the region was $1,216 in 2010 and the annual average interest on microloans was 30.7 percent.