You are here

Microfinance charities

Published: January 2011

Microfinance institutions

The organizations listed below are microfinance institutions that provide loans, and in some cases other financial services, to clients in developing countries. In total we considered 114 institutions which stood out for submitting a social performance report to Mix Market (out of over 1,400 institutions listed on Mix Market), and contacted 43 promising ones. 11 of these provided us with enough information to complete a full review. We identified these organizations through our process for identifying promising microfinance charities. For reference, see our discussion on drop out, interest, and repayment rates, and how we interpret standard of living data.

Organization Rank (within cause) Focus on dropout Interest rates (monthly/APR/EIR) Repayment rate (Collection rate/PAR>30/Write-off) Clients' standard of living Room for more funds
Small Enterprise Foundation 1 Excellent 7% / 84% / 126%*** 99%*** / 1% / 1% Very poor** $1.1m for lending programs
Chamroeun 2 Above average 4-5% / 51-61% / 65-81%*** 99%*** / Poor*** $564k for lending and non-lending
CUMO 3 Above average 13% / 156% / 354%*** N/A / 3% / 0% Poor* Possible for lending programs
MicroLoan Foundation 4 Moderate 12% / 144-149% / 304-326%** 98%*** / Very poor* $600k for lending programs
ID-Ghana 5 Limited Not asked (see note below) N/A / 4% / 27% Very poor** For lending programs
DAMEN - Moderate 3% / 35% / 41%** N/A / 5% / 2% Less poor* $520k for lending programs
FMFB - Limited Insufficient information N/A / 1% / 1% Less poor* $1m for lending and non-lending
FINCA Peru - Moderate 69-80% "effective" annual interest* N/A / 2% / 1% Less poor* Possible for non-lending programs
Fundación Paraguaya - Moderate Insufficient information N/A / 6% / 3% Less poor* Not for lending programs
MicroDreams - Limited Insufficient information Not explored due to other remaining questions We have not seen information on this About $1m for lending programs
Progresar - Unknown 10-13% / 128-151% / 237-341%* N/A / 5% / 2% We have not seen information on this $101,000 for lending programs
AMK - Strong 3% / 30-37% / 34-45%*** 97%* / 3% / 0% Poor** Likely does not need additional donations

Notes:

  • PAR>30 and write-off ratios are not given quality ratings because they are all taken directly from Mix Market, and thus we are not aware of any variation in quality. They are for the most recent year for which data is available (2008 or 2009). They do not describe the current portfolio of any MFI.
  • For more information on what we mean by a "collection rate," see our blog post, "More on the microfinance repayment rate."
  • For more information on different methods for calculating interest rates, see our post, "Microfinance interest rates."
  • For more information on the standard of living information we used for each MFI, see this excel file.
  • We didn't ask ID-Ghana for information on their interest rates. At the time we reviewed them (late-2009), interest rates were not a key step in our process.
  • AMK appears strong on all factors we investigated (to the extent we investigated them), but informed us that it was recently sold to an equity fund, and it is therefore unclear to us what role donations will play in AMK's operations in the future. Note that AMK is listed as one of Kiva's largest partners,1 and likely “effectively” receives donations through that vehicle (since it charges substantial interest while not paying interest in Kiva loans).

U.S.-based microfinance charities

We have considered the following U.S.-based microfinance charities. As discussed on our blog, these are large organizations that partner with a variety of microfinance institutions in developing countries. With the exception of Kiva, most of their activities consist of consulting or “technical assistance,” rather than founding, directly supporting or investing in microfinance institutions.