The Global Microfinance market is to grow at a CAGR of 16.61% percent over the period 2012-2016. One of the key factors contributing to this market growth is the increased focus on the untapped markets. The Global Microfinance market has also been witnessing the formation of credit bureau for microfinance institutions. However, the issue of sustainability with respect to outreach could pose a challenge to the growth of this market.
Due to the recent financial crisis in India and Mexico, many MFIs have altered their legal structure and turned into companies to float their equity and bonds to be able to generate more funds. This was nothing but a consequence of their high dependence on donors and low sustainability. Lately, MFIs are undergoing the phase of Mission Drift wherein they are molding their social objectives to become financially sustainable. This has given the expected results and has enabled MFIs to become sustainable.
The low income segment, which is the main focus of MFIs, is still largely untapped. Tapping this large unbanked segment is proving to be a tremendous growth driver for MFIs. With the market maturing at a gradually increasing rate, there is a growing demand for credit products.
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