Benchmarking the Financial Performance, Growth, and Outreach of Greenfield Microfinance institutions in Sub-Saharan Africa

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.

Bibliographic Details

Main Authors:	Cull, Robert, Harten, Sven, Nishida, Ippei, Bull, Greta
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014-09
Subjects:	ACCESS TO FINANCE, ACCESS TO FINANCIAL SERVICES, ACCOUNTING, ACQUISITION, ACQUISITIONS, AFFILIATES, AFFORDABLE PRICES, ASSET VALUES, BALANCE SHEETS, BANK COMPETITION, BANK CREDIT, BANK LENDING, BANK MERGERS, BANK POLICY, BANK SPREADS, BANKING MARKETS, BANKING SECTORS, BANKING SYSTEMS, BANKS, BORROWING, BORROWING COSTS, BRANCH NETWORKS, BROAD ACCESS, CAPITAL COST, CAPITAL COSTS, CAPITAL INVESTMENT, CAPITAL INVESTMENTS, COLLATERAL, COMMERCIAL BANKS, COOP, COOPERATIVES, COOPS, CORPORATION, CREDIT ALLOCATION, CREDIT LEVEL, CREDIT RISKS, CREDIT UNION, CREDIT UNIONS, CREDITWORTHINESS, CROSS-BORDER BANKING, DEBT, DEPENDENT, DEPOSIT, DEPOSITORS, DEPOSITS, DEVELOPING COUNTRIES, DEVELOPMENT BANK, DEVELOPMENT FINANCE, DEVELOPMENT FINANCE INSTITUTIONS, DOMESTIC BANK, DOMESTIC BANKING, DOMESTIC BANKS, DUMMY VARIABLE, DUMMY VARIABLES, EIB, EMERGING MARKETS, EXCLUSION, EXTERNAL BORROWING, FEMALE BORROWERS, FEMALE CLIENTS, FINANCE CORPORATION, FINANCES, FINANCIAL ACCESS, FINANCIAL DEPTH, FINANCIAL HEALTH, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL PERFORMANCE, FINANCIAL RESTRUCTURING, FINANCIAL SELF-SUFFICIENCY, FOREIGN BANK, FOREIGN BANK ENTRY, FOREIGN BANK PARTICIPATION, FOREIGN BANKS, FOREIGN ENTRY, FUNDING SOURCES, GOOD CREDIT, HIGH INTEREST RATES, HIGHER CAPITAL COSTS, HOLDING, HOLDING COMPANIES, HOLDING COMPANY, HOLDINGS, HOST COUNTRIES, HOST COUNTRY, HUMAN CAPITAL, HUMAN RESOURCES, INCOME LEVELS, INDIVIDUAL LIABILITY, INFLATION, INFLATION RATE, INTEREST INCOME, INTEREST RATE, INTEREST RATE SPREADS, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL FINANCE, INVESTING, INVESTMENT BANK, INVESTMENT PROJECTS, INVESTMENT VEHICLES, LEGAL FRAMEWORK, LIABILITY, LIMITED, LOAN, LOAN LOSS, LOAN PORTFOLIO, LOAN PORTFOLIO QUALITY, LOAN PORTFOLIOS, LOAN SIZE, LOAN SIZES, LOANS TO INDIVIDUALS, LONG-TERM LIABILITIES, MARKET COMPETITION, MARKET CONCENTRATION, MARKET DEVELOPMENT, MFI, MFIS, MICROFINANCE, MICROFINANCE INSTITUTIONS, MOBILE PHONE, MULTINATIONAL, MULTINATIONAL BANKS, NON-GOVERNMENTAL ORGANIZATIONS, NON-PERFORMING LOANS, NPL, OPERATING COST, OPERATING COSTS, OPERATING EXPENSES, OUTREACH, POOR BORROWERS, POTENTIAL BORROWERS, PRIVATIZATION, PRODUCTIVITY, PROFITABILITY, PROXY, RESERVES, RESTRUCTURING PROCESSES, RETAIL BANKING, RETURN, RETURN ON ASSETS, RURAL BANK, RURAL BANKS, SAVINGS, SHAREHOLDER, SMALL LOANS, SOFT LOANS, SPONSOR, SPONSORS, START-UPS, SUBSIDIARIES, TERMS OF LOANS, TOTAL BORROWING, TRANSITION COUNTRIES, WOMEN BORROWERS,
Online Access:	http://documents.worldbank.org/curated/en/2014/09/20205158/benchmarking-financial-performance-growth-outreach-greenfield-microfinance-institutions-sub-saharan-africa https://hdl.handle.net/10986/20331
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