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Financing microfinance loan portfolios
How do financial institutions fund their loan portfolios? This paper examines 13 of ACCION International's partners and reveals that the unregulated MFIs use a combination of concessional loans, government funding, and commercial and multilateral loans. Regulated financial institutionsuse all of these, but also term deposits, savings accounts and, for the most developed MFIs, bond issues. Issues such as cost, maturity, volume and continuity of access must be considered when MFIs structure their liabilities to provide a sound basis for growth and stability in microenterprise
lending.
How do financial institutions fund their loan portfolios? This paper examines 13 of ACCION International's partners and reveals that the unregulated MFIs use a combination of concessional loans, government funding, and commercial and multilateral loans. Regulated financial institutions
use all of these, but also term deposits, savings accounts and, for the most developed MFIs, bond issues. Issues such as cost, maturity, volume and continuity of access must be considered when MFIs structure their liabilities to provide a sound basis for growth and stability in microenterprise
lending.
use all of these, but also term deposits, savings accounts and, for the most developed MFIs, bond issues. Issues such as cost, maturity, volume and continuity of access must be considered when MFIs structure their liabilities to provide a sound basis for growth and stability in microenterprise
lending.
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