Benchmarking the Financial Performance, Growth, and Outreach of Greenfield Microfinance Institutions in Sub-Saharan Africa [electronic resource] / Cull, Robert

By: Cull, RobertContributor(s): Bull, Greta | Cull, Robert | Harten, Sven | Nishida, IppeiMaterial type: TextTextPublication details: Washington, D.C., The World Bank, 2014Description: 1 online resource (52 p.)Subject(s): Access to Finance | Bankruptcy and Resolution of Financial Distress | Banks and Banking Reform | Corporate Law | Debt Markets | Finance and Financial Sector Development | Foreign Bank Entry | Law and Development | MicrofinanceAdditional physical formats: Cull, Robert: Benchmarking the Financial Performance, Growth, and Outreach of Greenfield Microfinance Institutions in Sub-Saharan Africa.Online resources: Click here to access online Abstract: In recent years there has been a rapid increase in the presence and growth of greenfield microfinance institutions in Sub-Saharan Africa. This paper uses regressions to benchmark those African greenfields relative to other microfinance providers and finds that greenfields grew faster in terms of deposits and lending, improved their profitability to levels comparable to the top microfinance institutions, and substantially increased their lending to women. The effects were especially strong for greenfields that followed a consultant-led model to establish a deep retail banking presence spanning multiple countries, including the creation of extensive branch networks. Although their loan sizes are somewhat larger than those of most African microfinance institutions, indicating less outreach to the poorest market segments, greenfields have achieved rapid gains in financial inclusion on a broad scale.
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In recent years there has been a rapid increase in the presence and growth of greenfield microfinance institutions in Sub-Saharan Africa. This paper uses regressions to benchmark those African greenfields relative to other microfinance providers and finds that greenfields grew faster in terms of deposits and lending, improved their profitability to levels comparable to the top microfinance institutions, and substantially increased their lending to women. The effects were especially strong for greenfields that followed a consultant-led model to establish a deep retail banking presence spanning multiple countries, including the creation of extensive branch networks. Although their loan sizes are somewhat larger than those of most African microfinance institutions, indicating less outreach to the poorest market segments, greenfields have achieved rapid gains in financial inclusion on a broad scale.

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