MSc. Thesis: The Impact of the current economic and financial crisis on microfinance Appendices

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RIJKSUNIVERSITEIT, GRONINGEN

Appendices

MSc. Thesis: The Impact of the current economic and

financial crisis on microfinance

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2 SECTION 1 DESCRIPTION OF SAMPLES ... 6

Tabel 1.1 Distribution across regions ... 6

Tabel 1.2 Distribution across institutional size ... 6

Tabel 1.3 Distribution across institutional type ... 7

Tabel 1.4 Correlations between institutional size, region and type ... 8

Tabel 1.5 Sample financial performance study: distribution across countries within

regions ... 9

Tabel 1.6 Sample Survey Participants: distribution across countries within regions ... 10

SECTION 2 DESCRIPTION FINANCIAL DATASET ... 12

Table 2.1. Descriptive Statistics of performance indicators ... 12

Table 2.2 :Descriptive statistics of MFI funding characteristics ... 12

Table 2.3: Descriptive statistics of MFIs’ loan portfolio characteristics ... 13

Table 2.4 Descriptive statistics of performance indicators across regions ... 14

SECTION 3 RESULTS FINANCIAL PERFORMANCE STUDY WEIGHTED

SAMPLE ... 16

Table 3.1 Correlation loan loss provisioning ratio and other credit risk indicators ... 16

Table 3.2: Effect of the CRISIS –savings (1) ... 17

Table 3.3: Effect of the CRISIS-savings (2) ... 17

Table 3.4: Effect of the CRISIS - commercial funding ... 18

Table 3.5: Effect of the CRISIS - across loanproducts ... 19

Table 3.6: Effect of the CRISIS – urban/ rural. ... 20

Table 3.7 Effect of the CRISIS - across sectors ... 21

Table 3.8 Effect of the CRISIS- female clients ... 22

Table 3.9: Effect of the crisis- across lending methodologies ... 23

Table 3.10: Effect of the CRISIS across institutional types ... 24

Table 3.11 Correlation between MFI characteristics affecting the impact of the crisis

on MFIs ... 25

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3 Table 4.1 Impact of the CRISIS on MFI performance indicators ... 26

Table 4.2 Impact of the CRISIS on MFI performance indicators across regions ... 27

Table 4.3: Effect of the CRISIS –savings ... 28

Table 4.4: Effect of the CRISIS- commercial funding(1) ... 28

Table 4.4b: Effect of the CRISIS –commercial funding (2) ... 29

Table 4.5: Effect of the CRISIS –across loan products ... 30

Table 4.5B: Effect of the CRISIS –across loan products-MICRO ... 31

Table 4.6 Effect of the crisis- across sectors ... 32

Table 4.6b Effect of the crisis- across sectors ... 33

Table 4.7: Effect of the CRISIS –female clients ... 33

Table 4.8: Effect of the CRISIS- across lending methodology ... 34

Table 4.9: Effect of the CRISIS across institutional type ... 35

Table 4.10 : Effect of the CRISIS-across tier ... 35

SECTION 5 SURVEY RESULTS ... 36

SURVEY RESULTS SECTION 5.1 GENERAL EFFECTS ... 36

Table 5.1.1 Effects across MFIs ... 36

Table 5.1.2 Measures taken by MFIs in response to the crisis ... 1

Table 5.1.3 Conditions affecting MFI performance pre-existing the crisis ... 37

Table 5.1.4 Government programs affecting MFI performance ... 37

SURVEY RESULTS SECTION 5.2 THE IMPACT ON FUNDING ... 38

Table 5.2.1 Impact on Funding after august 2008 ... 38

Table 5.2.2 Change in deposits and savings ... 38

Table 5.2.3 Reasons for significant decrease in savings ... 38

Table 5.2.4 MFIs using an emergency facility ... 39

Table 5.2.5 MFIs requesting loan rescheduling ... 39

Table 5.2.6 MFIs having problems to meet debt obligations ... 39

Table 5.2.7 MFIs having problems paying out withdrawals of savings ... 40

Table 5.2.8 MFIs experiencing or expecting refinancing problems ... 40

Table 5.2.9 Refinancing problems-savings ... 40

Table 5.2.10 Refinancing problems-commercial funding ... 41

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4 Table 5.3.1 Change in cost of funding after august 2008 ... 42

Table 5.3.2 Change in savings rate after august 2008 ... 42

Table 5.3.3 Change in interest rate charged after august 2008 ... 43

Table 5.3.4 Higher cost of funding versus interest rate charged to clients 2008 ... 43

SURVEY RESULTS SECTION 5.4 OPERATIONAL COSTS ... 44

Table 5.4.1 Change in operational costs ... 44

SURVEY RESULTS SECTION 5.5 IMPACT ON CLIENTS ... 44

Table 5.5.1 Reasons for deterioration portfolio quality in 2008/2009 ... 44

Table 5.5.2 Clients and sectors perceived to be most affected by the current crisis ... 45

Table 5.5.3 Loans in which loan losses are perceived to concentrate ... 45

Table 5.5.4 How will clients repay if they are affected in their income ... 46

Table 5.5.6 Write-off ratio expected for 2009 ... 46

Table 5.5.7 Write-off ratio expected for 2010 ... 47

Table 5.5.8 Change of write-offs in 2010 w.r.t. 2009 ... 47

Table 5.5.9 Portfolio at risk >30 + refinanced and restructured loans ... 48

SURVEY RESULTS SECTION 5.6A CLIENT GROWTH ... 48

Table 5.6.1 Revision clients growth targets due to the crisis ... 48

Table 5.6.2 Reasons revisions client growth targets ... 49

Table 5.6.3 Reasons for more new clients applying ... 50

Table 5.6.4 Reasons for fewer new clients applying ... 50

SURVEY RESULTS SECTION 5.6B LOAN PORTFOLIO GROWTH ... 51

Table 5.6.5 Revision growth targets of outstanding loan portfolio ... 51

Table 5.6.6 Reasons revision growth targets of loan portfolio ... 52

Table 5.6.7 Reasons for lower loan demand ... 53

Table 5.6.8 Reasons for higher loan demand ... 53

SURVEY RESULTS SECTION 5.7- EFFECTS ACROSS MFIS ... 54

Table 5.7.1 Main effects across institutional size ... 54

Table 5.7.2 Main effects across institutional type ... 54

Table 5.7.3 Relation effect repayment rates and numbers of competitors ... 55

Table 5.7.4 Relation effect repayment rates and indebted clients ... 56

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5

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6 SECTION 1 DESCRIPTION OF SAMPLES

Tabel 1.1 Distribution across regions

Region

MBB benchmark

(2008)

1

Sample

financial data

Weighted

Sample financial

data

Sample surve

Africa &

Middle East- North-Africa

23%

0%

11%

Asia

26%

7%

8%

11%

Eastern Europe and Central

Asia

20%

51%

47%

33%

Latin America

31%

42%

44%

45%

Tabel 1.2 Distribution across institutional size

1

Proportions are calculated from MBB 2008 which only provides numbers of MFIs per region and

categorizes regions in the groups specified in table 1.

2

Based on asset value in USD as of august 2009 reported to SNS Asset Management

3

Based on asset value reported at mixmarket.org

Tier

(based on asset value)

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7 Tabel 1.3 Distribution across institutional type

Type

4

Benchmark

Sample financial data

5

Weighted

Sample financial data

Survey Sample

Banks

6

8%

20%

13%

Credit unions/

cooperatives

7

17%

5%

6%

4%

NBFIs

8

31%

50%

48%

39%

NGOs

9

36%

24%

30%

41%

Other

8%

2%

3%

4

We reduced institutional types to five types. We defined rural banks as other due to the absence of this

type in our sample and due to the limited frequency of this type in the benchmark.

5

Based on information from the mixmarket dataset

6

Bank is “A licensed financial intermediary regulated by a state banking supervisory agency. It may

provide any of a number of financial services, such as deposit taking, lending, payment services, and

money transfers.” (glossary of terms, the Mix, 2009)

7

Credit Union/Cooperative: “A nonprofit, member-based financial intermediary. It may offer a range of

financial services, including lending and deposit taking, for the benefit of its members. While not regulated

by a state banking supervisory agency, it may come under the supervision of regional or national

cooperative council.” (glossary of terms, the Mix, 2009)

8

NBFI: “Non bank financial institution. An institution that provides similar services to those of a Bank, but

is licensed under a separate category. The separate license may be due to lower capital requirements, to

limitations on financial service offerings, or to supervision under a different state agency. In some countries

this corresponds to a special category created for microfinance institutions.” (glossary of terms, the Mix,

2009)

9

NGO: “Non government organization. One form of MFI. An organization registered as a nonprofit for tax

purposes or some other legal charter. Its financial services are usually more restricted, usually not including

deposit taking. These institutions are typically not regulated by a banking supervisory agency.” (glossary of

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8 Tabel 1.4 Correlations between institutional size, region and type

Tier1

Tier2

Tier3

NGO

NBFI

Bank

EER

CAC

SA

CA

SSEA

Tier1

1 -,900

**

-,208

**

-,347

**

-,039

,453

**

,071

**

,110

**

-,127

**

,011

-,105

**

Tier2

-,900

**

1 -,240

**

,322

**

,076

**

-,488

**

-,010

-,126

**

,109

**

-,062

**

,133

**

Tier3

-,208

**

-,240

**

1 ,053

*

-,081

**

,078

**

-,135

**

,038

,037

,115

**

-,065

**

NGO

-,347

**

,322

**

,053

*

1 -,564

**

-,284

**

-,113

**

-,252

**

,156

**

,135

**

,171

**

NBFI

-,039

,076

**

-,081

**

-,564

**

1 -,506

**

,036

,293

**

-,082

**

-,311

**

-,001

Bank

,453

**

-,488

**

,078

**

-,284

**

-,506

**

1 ,147

**

-,108

**

-,093

**

,181

**

-,144

**

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9 Tabel 1.5 Sample financial performance study: distribution across countries within regions

Frequency Percent(%) Eastern Europe and Russia Bosnia 3 21,4

Bulgaria 2 14,3 Kosovo 2 14,3 Macedonia 1 7,1 Moldova 1 7,1 Romania 1 7,1 Russia 3 21,4 Serbia 1 7,1 Total 14 100,0

Central Asia and the Caucasus Armenia 1 5,9 Azerbaijan 5 29,4 Georgia 3 17,6 Kazakhstan 1 5,9 Kyrgyzstan 2 11,8 Mongolia 1 5,9 Montenegro 1 5,9 Tajikistan 3 17,6 Total 17 100,0

South America Bolivia 4 28,6

Colombia 1 7,1

Ecuador 3 21,4

Peru 6 42,9

Total 14 100,0

Central America and the Carribean El Salvador 1 11,1 Guatemala 1 11,1 Honduras 3 33,3 Mexico 1 11,1 Nicaragua 3 33,3 Total 9 100,0

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10 Tabel 1.6 Sample Survey Participants: distribution across countries within regions

Countries Survey sample Frequency Valid Percent Central Asia and the

Caucasus Armenia 3 21,4 Azerbaijan 4 28,6 Georgia 2 14,3 Kazahkstan 1 7,1 Tajikistan 4 28,6 Total 14 100,0

Central America and the Carribean El salvador 2 9,1 Guatemala 3 13,6 Haiti 1 4,5 Honduraa 5 22,7 Mexico 3 13,6 Nicaragua 8 36,4 Total 22 100,0

Eastern Europe and Russia Bosnia 4 30,8

Bulgaria 2 15,4 Kosovo 2 15,4 Macedonia 1 7,7 Mongolia 1 7,7 Romania 1 7,7 Russia 2 15,4 Total 13 100,0

South America Bolivia 4 25,0

Brazil 2 12,4

Ecuador 3 18,8

Paraguaya 1 6,2

Peru 6 37,5

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11

South- South-East Asia Cambodi 5 62,5

Philipp 1 12,5

Sri Lan 1 12,5

Vietnam 1 12,5

Total 8 100,0

Africa and the Middle-East Ethiopia 1 11,1

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12 SECTION 2 DESCRIPTION FINANCIAL DATASET

Table 2.1. Descriptive Statistics of performance indicators

N

Minimum

Maximum

Mean

Std. Deviation

OPSELFSUF

1342

-1,53

4,63

1,1789

,35915

ROA

1349

-,20

,48

,0309

,05189

PARKL30

893 ,00

,24

,0323

,03720

PAR30RR

1241

,00

,27

,0390

,03964

PAR30

1126

,00

,21

,0291

,02620

WRITEOFFS

746 ,00

,11

,0093

,01469

BORWGROWTH

1087

-,52

,30

,0135

,04403

LPGROWTH

893 -,23

,66

,0305

,05096

Table 2.2 :Descriptive statistics of MFI funding characteristics

N

Minimum

Maximum

Mean

Std. Deviation

SAVLA

1302

,00

,76

,0781

,17822

SAVINGSDUM

1314

,00

1,00

,3219

,46739

BORCONCESLIA

891 ,00

,99

,1455

,28190

BORCOMLIA

1302

,00

1,00

,7525

,29280

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13 Table 2.3: Descriptive statistics of MFIs’ loan portfolio characteristics

N

Minimum

Maximum

Mean

Std. Deviation

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14 Table 2.4 Descriptive statistics of performance indicators across regions

PARKL30 N Range Minimum Maximum Mean Std. Deviation Eastern Europe and Russia 205 ,13 ,00 ,13 ,0259 ,02536 Central Asia and the Caucasus 248 ,23 ,00 ,23 ,0333 ,03759 South America 225 ,24 ,00 ,24 ,0347 ,04877 Central America and the

Caribbean 151 ,11 ,00 ,11 ,0284 ,02164 South- and South East Asia 64 ,21 ,01 ,22 ,0495 ,04387

PAR30 N Range Minimum Maximum Mean Std. Deviation Eastern Europe and Russia 269 ,1485 ,0001 ,1486 ,0249 ,0242 Central Asia and the Caucasus 293 ,0808 ,0005 ,0813 ,0227 ,0174 South America 304 ,1224 ,0002 ,1225 ,0353 ,0250 Central America and the

PAR30RR N Range Minimum Maximum Mean Std. Deviation Eastern Europe and Russia 316 ,2549 ,0001 ,2549 ,0357 ,0358 Central Asia and the Caucasus 314 ,0978 ,0005 ,0984 ,0275 ,0214 South America 333 ,2744 ,0002 ,2746 ,0468 ,0444 Central America and the

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15

OPSELFSUF N Range Minimum Maximum Mean Std. Deviation Eastern Europe and Russia 335 5,6284 -1,0032 4,6253 1,2134 ,4199 Central Asia and the Caucasus 347 1,7764 ,8480 2,6244 1,2857 ,2322 South America 358 1,1856 ,6093 1,7949 1,1596 ,2177 Central America and the Caribbean 226 3,7248 -1,5259 2,1990 1,0176 ,5369 South- and South East Asia 76 ,9403 ,7946 1,7350 1,1102 ,1969

ROA N Range Minimm Maximum Mean Std. Deviation Eastern Europe and Russia 334

,6247 -,1418 ,4830 ,0309 ,0577 Central Asia and the Caucasus

350 ,3191 -,0333 ,2858 ,0471 ,0394 South America 358 ,2713 -,0998 ,1715 ,0296 ,0456 Central America and the Caribbean

228 ,4278 -,1874 ,2405 ,0158 ,0575 South- and South East Asia

79 ,3452 -,2008 ,1443 ,0086 ,0622

LPGROWTH N Range Minimum Maximum Mean Std. Deviation Eastern Europe and Russia 221 ,4971 -,1007 ,3964 ,0231 ,0435 Central Asia and the Caucasus 218 ,8961 -,2349 ,6612 ,0383 ,0660 South America 238 ,4028 -,1885 ,2143 ,0276 ,0492 Central America and the

Carribean 168 ,2501 -,0495 ,2006 ,0314 ,0359 South- and South East Asia 48 ,2854 -,0902 ,1952 ,0402 ,0534

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16 SECTION 3 RESULTS

10

FINANCIAL PERFORMANCE STUDY

WEIGHTED SAMPLE

Table 3.1 Correlation loan loss provisioning ratio and other credit risk indicators

loan loss provisioning expense

divided by total assets

loan loss provisioning expense

divided by total assets

Pearson Correlation

1,000

Sig. (2-tailed)

N

1006

PARKL30

Pearson Correlation

,125

**

Sig. (2-tailed)

,000

N

920 PAR30

Pearson Correlation

,229

**

Sig. (2-tailed)

,000

N

924 WRITEOFFS

Pearson Correlation

,087

**

Sig. (2-tailed)

,007

N

961 PAR30RR

Pearson Correlation

,203

**

Sig. (2-tailed)

,000

N

957 **. Correlation is significant at the 0.01 level (2-tailed).

10

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17 Table 3.2: Effect of the CRISIS –savings (1)

VARIABLES ROA PAR30 PAR30RR WRITEOFFS CRISIS -0.0354*** 0.0465*** 0.0496*** 0.0087***

(4.40e-05) (6.51e-07) (1.02e-06) (8.85e-05)

CRISIS*SAVLA 0.046411 -0.1478*** -0.0908* -0.0316*** (0.140) (0.00107) (0.0624) (0.000495) SAVLA -0.0034 -0.0149* -0.0152 0.0037 (0.845) (0.0893) (0.278) (0.131) Constant 0.0455*** 0.0246*** 0.0295*** 0.0072*** Observations 1273 1053 1223 728 Number of id 57 57 57 55 Adjusted R-squared 0.120 0.410 0.363 0.135 Robust p-values in parentheses

*** p<0.01, ** p<0.05, * p<0.1 Fixed-effects regressions

Table 3.3: Effect of the CRISIS-savings (2)

VARIABLES ROA PAR30 PAR30RR WRITEOFFS CRISIS -0.0381*** 0.0469*** 0.0515*** 0.0091***

(5.87e-05) (5.71e-06) (3.51e-06) (4.22e-05)

CRISIS*SAVINGSDUM 0.015512 -0.0143* -0.0196** -0.0059** (0.112) (0.0764) (0.0245) (0.0251) DSAVINGSDUM -0.0125 -0.0062 0.0273 0.0212*** (0.158) (0.571) (0.367) (0) Constant 0.0489*** 0.0253*** 0.0214** 0.0016*** (0) (0) (0.0105) (7.24e-11) Observations 1273 1053 1223 728 Number of id 57 57 57 55 Adjusted R-squared 0.125 0.400 0.369 0.159 Robust p-values in parentheses

11

In unweighted sample this interaction effect is significant see table 4.3

12

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18 Table 3.4: Effect of the CRISIS - commercial funding

VARIABLES BORWGROWTH PAR30

CRISIS -0.0078 0.0103 (0.462) (0.441) CRISIS*BORCOMLIA -0.0227** 0.0312** (0.0401) (0.0358) BORCOMLIA 0.0176 0.0066 (0.376) (0.382) Constant 0.0138 0.0189*** (0.417) (0.00369) Observations 1078 1053 Number of id 57 57 Adjusted R-squared 0.146 0.423 Robust p-values in parentheses

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19 Table 3.5: Effect of the CRISIS - across loanproducts

VARIABLES PAR30 PAR30RR WRITEOFFS CRISIS 0.0515*** 0.0561*** 0.0092** (0.00176) (0.000419) (0.0256) CRISIS*SME -0.0286 -0.0172 0.0067 (0.301) (0.471) (0.379) CRISIS*HOUSING 0.0217 -0.0431 -0.0225 (0.942) (0.773) (0.640) CRISIS*CONSUMER -0.0197 -0.0733* -0.0196** (0.807) (0.0857) (0.0404) CRISIS*OTHER 0.1503 0.2214 0.0356 (0.267) (0.160) (0.273) SME -0.0651** -0.3166*** -0.1332*** (0.0367) (0.000338) (0.00494) HOUSING -0.0135 0.8060*** 0.6000*** (0.942) (0.00694) (0.00910) CONSUMER -0.1143 -0.2663*** 0.0430 (0.222) (0.000338) (0.136) OTHER2 -0.0572 0.0482 0.0658 (0.116) (0.742) (0.550) Constant 0.0497*** 0.0914*** 0.0093** (0.000162) (2.65e-10) (0.0300) Observations 777 858 518 Number of id 40 39 36 Adjusted R-squared 0.398 0.409 0.334 Robust p-values in parentheses

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20

Robust p-values in parentheses *** p<0.01, ** p<0.05, * p<0.1

Fixed-effects regressions

Table 3.6: Effect of the CRISIS – urban/ rural.

VARIABLES PARKL30 CRISIS 0.0102*** (0.00148) CRISIS*URBAN 0.0115*** (0.00233) URBAN 0.0122 (0.880) Constant 0.0197 (0.716) Observations 581 Number of id 36 Adjusted R-squared 0.183 Robust p-values in parentheses *** p<0.01, ** p<0.05, * p<0.1

Table 3.5b Effect of the CRISIS - across loanproducts

VARIABLES Par30 Par30rr Writeoffs

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21 Table 3.7 Effect of the CRISIS - across sectors

VARIABLES OPSELFSUF BORWGROWTH WRITEOFFS

CRISIS -0.2766*** -0.0300* 0.0095 (0.00725) (0.0818) (0.175) CRISIS*MANUF 0.4559 0.2011*** -0.0013 (0.587) (0.00371) (0.977) CRISIS*TRADCOM 0.2083** 0.0019 -0.0051 (0.0207) (0.894) (0.319) CRISIS*SERVICES -0.3879 -0.0530* 0.0246** (0.290) (0.0899) (0.0440) CRISIS*OTHER1 -0.0369 -0.0167 -0.0169* (0.875) (0.503) (0.0897) MANUF 0.0000 0.0000 0.0000 () () () TRADCOM -2.0712 -0.1388 0.0670 (0.193) (0.853) (0.341) SERVICES -1.4877 -0.1809 0.0341 (0.310) (0.765) (0.542) OTHER1 -1.0645 -0.1820 0.0626 (0.113) (0.737) (0.193) Constant 3.4313** 0.2104 -0.0579 (0.0241) (0.767) (0.367) Observations 926 769 523 Number of id 41 37 36 Adjusted R-squared 0.136 0.167 0.214

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22

Table 3.7b effect crisis across sectors-agri

VARIABLES Opselfsuf Borwgrowth Writeoffs

CRISIS -0.1632** -0.0311*** 0.0073** (0.0204) (0.000275) (0.0374) CRISIS*AGRI -0.1354 -0.0015 0.0009 (0.250) (0.940) (0.905) AGRI -0.9430 -0.0814 0.0453 (0.222) (0.531) (0.405) Constant 1.5731*** 0.0475 -0.0016 (5.96e-11) (0.116) (0.881) Observations 926 769 523 Number of id 41 37 36 Adjusted R-squared 0.120 0.140 0.138

Table 3.8 Effect of the CRISIS- female clients

VARIABLES OPSELFSUF PARKL30 PAR30 PAR30RR WRITEOFFS CRISIS -0.4237*** 0.0269*** 0.0493* 0.0661*** 0.0128** (0.00247) (0.00582) (0.0648) (0.00498) (0.0122) CRISIS*WOMEN 0.3379* -0.0225** 0.0007 -0.0226 -0.0079 (0.0601) (0.0470) (0.983) (0.448) (0.247) WOMEN 0.7583 -0.0515 -0.0470 -0.1042 0.0109 (0.334) (0.587) (0.548) (0.391) (0.111) Constant 0.9813** 0.0495 0.0440 0.0741 0.0015 (0.0100) (0.263) (0.227) (0.187) (0.627) Observations 859 664 733 806 501 Number of id 38 36 38 36 34 Adjusted R-squared 0.123 0.206 0.395 0.398 0.138 Robust p-values in parentheses

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23 Table 3.9: Effect of the crisis- across lending methodologies

VARIABLES PARKL30 PAR30 PAR30RR WRITEOFFS

CRISIS 0.0142*** 0.0449*** 0.0487*** 0.0078*** (0.000949) (0.000858) (0.000519) (0.00896) CRISIS*SOLID -0.0063 0.0381* 0.0125 0.0022 (0.380) (0.0884) (0.634) (0.573) CRISIS*VILLAGE -0.0183** -0.0418** -0.0515** -0.0109** (0.0250) (0.0492) (0.0326) (0.0257) SOLID -0.0204 -0.1452 -0.1857 0.0044 (0.737) (0.198) (0.105) (0.671) VILLAGE 0.0000 -0.2662*** 0.0000 0.0000 () (1.89e-07) () () Constant 0.0289*** 0.0473*** 0.0455*** 0.0072*** (3.90e-06) (5.68e-06) (9.46e-05) (2.54e-07)

Observations 633 770 853 507

Number of id 39 40 39 36

Adjusted R-squared 0.176 0.406 0.360 0.127

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24 Table 3.10: Effect of the CRISIS across institutional types

(NGO is reflected in the base term)

VARIABLES BORWGROWTH LPGROWTH

CRISIS -0.0223*** -0.0353*** (0.000115) (7.31e-05) CRISIS*BANK -0.0207** -0.0278*** (0.0124) (0.00150) CRISIS*NBFI13 -0.0101 -0.0117 (0.203) (0.243) CRISIS*OTHER14 0.0000 0.0000 () () Constant 0.0278*** 0.0410*** (0) (0) Observations 1046 866 Number of id 55 54 Adjusted R-squared 0.189 0.111

13

NBFI is a non-bank financial institution

14

(25)

25 Table 3.11 Correlation between MFI characteristics affecting the impact of the crisis on MFIs

BorComLia

Village Banks

Consumer

Urban

Women

EER

CAC

CA

bank

tier1

SAVLA

BorComLia

Pearson Correlation

1,000

,005

,030

-,219

**

,133

**

,047

-,019

-,064

*

-,303

**

-,187

**

-,476

**

SAVLA

Pearson Correlation

-,476

**

,061

,109

**

,342

**

-,090

**

-,023

-,148

**

,104

**

,588

**

,374

**

1,000

Village

Banks

Pearson Correlation

,005

1,000

,103

**

,098

**

,319

**

-,145

**

,272

**

-,152

**

,022

-,127

**

,061

Consumer

Pearson Correlation

,030

,103

**

1,000

-,109

**

-,291

**

-,120

**

,098

**

-,208

**

,088

**

,135

**

,109

**

Urban

Pearson Correlation

-,219

**

,098

**

-,109

**

1,000

,020

-,111

**

,075

*

,129

**

,487

**

,484

**

,342

**

Women

Pearson Correlation

,133

**

,319

**

-,291

**

,020

1,000

-,328

**

-,229

**

,066

*

-,073

*

-,285

**

-,090

**

EER

Pearson Correlation

,047

-,145

**

-,120

**

-,111

**

-,328

**

1,000

-,340

**

-,246

**

,147

**

,071

**

-,023

CAC

Pearson Correlation

-,019

,272

**

,098

**

,075

*

-,229

**

-,340

**

1,000

-,257

**

-,108

**

,110

**

-,148

**

CA

Pearson Correlation

-,064

*

-,152

**

-,208

**

,129

**

,066

*

-,246

**

-,257

**

1,000

,181

**

,011

,104

**

bank

Pearson Correlation

-,303

**

,022

,088

**

,487

**

-,073

*

,147

**

-,108

**

,181

**

1,000

,453

**

,588

**

tier1

Pearson Correlation

-,187

**

-,127

**

,135

**

,484

**

-,285

**

,071

**

(26)

26 SECTION 4 RESULTS FINANCIAL PERFORMANCE

STUDY-UNWEIGHTED SAMPLE

Table 4.1 Impact of the CRISIS on MFI performance indicators

(1) (2) (3) (4) (5) (6) (7) (8)

VARIABLES PARKL3015 PAR30

(22) (26) PAR30RR (26) WRITEOFFS (30) OPSELFSUF (24) ROA (22) BORWGROWTH (23) LPGROWTH (22)

Structural break Nov 08 Mrt 09 Mrt 09 Aug 09 Jan 09 Nov 08 Dec 08 Nov 08

CRISIS 0.0167*** 0.0350*** 0.0406*** 0.0088*** -0.2058*** -0.0314*** -0.0277*** -0.0360*** (2.35e-07) (2.38e-08) (1.13e-07) (0.00232) (1.44e-08) (1.06e-07) (1.25e-09) (0) Constant 0.0277*** 0.0245*** 0.0283*** 0.0079*** 1.2456*** 0.0435*** 0.0253*** 0.0396***

(0) (0) (0) (0) (0) (0) (0) (0)

Observations 1011 1126 1241 746 1342 1349 1087 980

Number of id 63 57 57 55 57 57 57 64

Adjusted R-squared 0.194 0.335 0.317 0.104 0.154 0.136 0.112 0.113 Robust p-values in parentheses

15

(27)

27 Table 4.2 Impact of the CRISIS on MFI performance indicators across regions

(1) (2) (3) (4) (5) (6) (7) (8)

VARIABLES PARKL3016 PAR30 PAR30RR WRITEOF FS

OPSELFSUF ROA BORWGROWTH LPGROWTH

Nov 08

CRISIS24 0.0383*** 0.0569*** 0.0764*** 0.0188** -0.3136*** -0.0429*** -0.0308*** -0.0397*** (2.30e-05) (2.51e-07) (8.51e-05) (0.0106) (7.81e-06) (0.00140) (2.99e-09) (9.43e-08)

CRISIS24cac -0.0273*** -0.0198 -0.0343* -0.0117 0.0829 -0.0004 0.0033 -0.0085 (0.00316) (0.174) (0.0956) (0.126) (0.370) (0.978) (0.757) (0.395) CRISIS24ca -0.0281*** -0.0346*** -0.0479** -0.0178** 0.1824** 0.0144 0.0004 0.0060 (0.00385) (0.00577) (0.0347) (0.0360) (0.0322) (0.431) (0.961) (0.614) CRISIS24sa -0.0295*** -0.0486*** -0.0662*** -0.0150* 0.2359*** 0.0342** 0.0135** 0.0289*** (0.00140) (5.15e-05) (0.000612) (0.0938) (0.00227) (0.0142) (0.0484) (0.000466) CRISIS24ssea -0.0299*** -0.0259** -0.0482** -0.0127* -0.0217 0.0171 -0.0173 -0.0255** (0.00109) (0.0120) (0.0114) (0.0909) (0.750) (0.281) (0.127) (0.0109) () () Constant 0.0277*** 0.0244*** 0.0282*** 0.0079*** 1.2460*** 0.0437*** 0.0252*** 0.0396*** (0) (0) (0) (0) (0) (0) (0) (0) Observations 1011 1126 1241 746 1342 1349 1087 980 Number of id 6317 57 57 55 57 57 57 64 Adjusted R-squared 0.296 0.423 0.427 0.157 0.184 0.163 0.117 0.134 Robust p-values in parentheses

16

(28)

28 Table 4.3: Effect of the CRISIS –savings

VARIABLES ROA PAR30 PAR30RR WRITEOFFS

CRISIS -0.0362*** 0.0409*** 0.0459*** 0.0115*** (8.33e-06) (8.04e-09) (3.38e-07) (0.000839)

CRISIS*SAVLA 0.0427** -0.0663*** -0.0562*** -0.0257*** (0.0231) (0.000162) (0.00395) (0.000782) SAVLA -0.0104 -0.0249** -0.0242** 0.0038 (0.580) (0.0253) (0.0219) (0.565) Constant 0.0425*** 0.0254*** 0.0296*** 0.0076*** (0) (0) (0) (0) Observations 1273 1053 1223 728 Number of id 57 57 57 55 Adjusted R-squared 0.143 0.393 0.343 0.141

Table 4.4: Effect of the CRISIS- commercial funding(1)

VARIABLES BORWGROWTH PAR30 PAR30RR WRITEOFFS

CRISIS -0.0115 0.0100 0.0148 -0.0071 (0.197) (0.456) (0.257) (0.167) CRISIS*BORCOMLIA -0.0215* 0.0330* 0.0336* 0.0198** (0.0824) (0.0616) (0.0848) (0.0192) BORCOMLIA 0.0125 0.0003 0.0121 0.0095*** (0.199) (0.958) (0.268) (0.00684) Constant 0.0160** 0.0233*** 0.0185** 0.0007 (0.0356) (1.20e-05) (0.0364) (0.798) Observations 1078 1053 1223 728 Number of id 57 57 57 55 Adjusted R-squared 0.115 0.369 0.345 0.180

(29)

29 Table 4.4b: Effect of the CRISIS –commercial funding (2)

if commercial funding as % of total liabilities >60%

VARIABLES ROA BORWGROWTH PAR30 PAR30RR WRITEOFFS

CRISIS -0.0100* -0.0143* 0.0137 0.0224** -0.0006 (0.0990) (0.0721) (0.253) (0.0209) (0.838) CRISIS*DBORCOMLIA -0.0298** -0.0164* 0.0256* 0.0208* 0.0105** (0.0494) (0.0791) (0.0564) (0.0757) (0.0140) DBORCOMLIA -0.0006 0.0105 0.0010 0.0082 0.0064* (0.972) (0.160) (0.804) (0.199) (0.0615) Constant 0.0517*** 0.0166** 0.0230*** 0.0213*** 0.0027 (0) (0.0108) (2.17e-09) (0.000596) (0.354) Observations 1260 1062 1043 1206 722 Number of id 56 56 56 56 54 Adjusted R-squared 0.133 0.117 0.370 0.336 0.154

(30)

30 Table 4.5: Effect of the CRISIS –across loan products

(31)

31 Table 4.5B: Effect of the CRISIS –across loan products-MICRO

VARIABLES Par30 Par30rr Writeoffs

CRISIS 0.0176 0.0184 0.0011 (0.101) (0.129) (0.725) CRISIS*MICRO 0.0332 0.0388* 0.0115 (0.110) (0.0925) (0.188) MICRO 0.0397** 0.1014** -0.0191 (0.0375) (0.0295) (0.608) Constant -0.0020 -0.0386 0.0205 (0.869) (0.200) (0.415) Observations 777 858 518 Number of id 40 39 36 Adjusted R-squared 0.374 0.358 0.128

(32)

32 Table 4.6 Effect of the crisis- across sectors

VARIABLES OPSELFSUF BORWGROWTH WRITEOFFS

CRISIS -0.2722** -0.0287 0.0046 (0.0250) (0.171) (0.652) CRISIS*MANUF 0.6335 0.1397** -0.0413 (0.262) (0.0429) (0.248) CRISIS*TRADCOM 0.1971 0.0064 0.0160 (0.184) (0.790) (0.525) CRISIS*SERVICES -0.1517 -0.0551 0.0061 (0.620) (0.107) (0.698) CRISIS*OTHER1 -0.1890 -0.0068 -0.0106 (0.505) (0.807) (0.524) MANUF 0.0000 0.0000 0.0000 () () () TRADCOM -1.3012 -0.2146 0.0402 (0.324) (0.761) (0.611) SERVICES -1.1727 -0.3007 0.0068 (0.337) (0.591) (0.925) OTHER1 -1.0868* -0.2529 0.0685 (0.0821) (0.598) (0.186) -2.1235 -0.3344 0.0480 (0.135) (0.647) (0.578) Constant 2.5991** 0.2692 -0.0289 (0.0220) (0.657) (0.667) Observations 926 769 523 Number of id 41 37 36 Adjusted R-squared 0.150 0.165 0.181

(33)

33 Table 4.6b Effect of the crisis- across sectors

VARIABLES Opselfsuf Borwgrowth Writeoffs

CRISIS -0.1811*** -0.0285*** 0.0099 (0.00289) (3.41e-05) (0.157) CRISIS*AGRI -0.1142 -0.0034 -0.0082 (0.449) (0.889) (0.661) AGRI -0.5075 0.0328 0.0012 (0.290) (0.742) (0.940) Constant 1.3708*** 0.0202 0.0074** (0) (0.316) (0.0189) Observations 926 769 523 Number of id 41 37 36 Adjusted R-squared 0.135 0.138 0.112

Table 4.7: Effect of the CRISIS –female clients

(women= female clients as a proportion of total clients, femdum = 1 if % female clients>50%)

PARKL30 (WOMEN) OPSELFSUF (WOMEN) Client growth (FEMDUM) PAR30 (FEMDUM) CRISIS 0.0316*** -0.4034*** -0.0262*** 0.0390*** (0.00209) (0.00237) (2.63e-05) (5.40e-05) CRISIS*WOMEN -0.0267* 0.4357* -0.0150* 0.0140** (0.0807) (0.0688) (0.0508) (0.0390) WOMEN -0.0013 0.1032 -0.0250*** 0.0083*** (0.973) (0.681) (3.04e-06) (9.38e-07) Constant 0.0257 1.2288*** 0.0345*** 0.0195*** (0.135) (0) (0) (0) Observations 664 859 718 733 Number of id 40 38 34 38 Adjusted R-squared 0.169 0.143 0.156 0.388

(34)

34 Table 4.8: Effect of the CRISIS- across lending methodology

% lent through individual loans excluded (reflected in baseterm, cirisis)

VARIABLES PAR30RR WRITEOFFS

CRISIS 0.0476*** 0.0098** (0.000172) (0.0487) CRISIS*SOLID -0.0139 -0.0066 (0.706) (0.515) CRISIS*VILLAGE -0.0592* -0.0141* (0.0643) (0.0729) SOLID -0.2047* 0.0051 (0.0930) (0.602) VILLAGE 0.0000 0.0000 () () Constant 0.0439*** 0.0074*** (0.000100) (1.46e-06) Observations 853 507 Number of id 39 36 Adjusted R-squared 0.333 0.119 Robust p-values in parentheses

(35)

35 Table 4.9: Effect of the CRISIS across institutional type

(ngo = exlcuded, is reflected in the base-term CRISIS)

VARIABLES OPSELFSUF ROA BORWGROWTH LPGROWTH PAR30 PAR30RR WRITEOFFS CRISIS -0.1571*** -0.0242** -0.0228*** -0.0342*** 0.0356*** 0.0410*** 0.0050* (0.00577) (0.0477) (5.81e-05) (2.86e-05) (0.00544) (0.00666) (0.0859) CRISIS*BANK 0.0412 -0.0036 -0.0017 -0.0190* -0.0130 0.0069 0.0096 (0.541) (0.808) (0.809) (0.0952) (0.402) (0.790) (0.404) CRISIS*NBFI -0.0888 -0.0139 -0.0072 -0.0046 0.0025 -0.0033 0.0038 (0.218) (0.313) (0.396) (0.667) (0.863) (0.838) (0.328) CRISIS*OTHER 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 Constant 1.2536*** 0.0428*** 0.0249*** 0.0379*** 0.0244*** 0.0275*** 0.0079*** (0) (0) (0) (0) (0) (0) (0) Observations 1298 1304 1046 866 1092 1197 736 Number of id 55 55 55 54 55 55 53 Adjusted R-squared 0.165 0.147 0.131 0.109 0.335 0.320 0.116 Robust p-values in parentheses

Table 4.10 : Effect of the CRISIS-across tier

VARIABLES OPSELFSUF ROA BORWGROWTH LPGROWTH PAR30 PAR30RR WRITEOFFS CRISIS -0.2281*** -0.0361*** -0.0324*** -0.0456*** 0.0460*** 0.0479*** 0.0069***

(3.64e-06) (1.82e-05) (2.08e-07) (2.06e-09) (1.31e-06) (1.44e-06) (0.000934)

CRISIS*TIER1 0.0542 0.0115 0.0120* 0.0123 -0.0229** -0.0173 0.0041 (0.372) (0.227) (0.0948) (0.171) (0.0277) (0.198) (0.472) Constant 1.2452*** 0.0434*** 0.0251*** 0.0377*** 0.0245*** 0.0284*** 0.0079*** (0) (0) (0) (0) (0) (0) (0) Observations 1342 1349 1087 893 1126 1241 746 Number of id 57 57 57 57 57 57 55 Adjusted R-squared 0.156 0.140 0.116 0.114 0.370 0.331 0.108 Robust p-values in parentheses

(36)

36 SECTION 5 SURVEY RESULTS

SURVEY RESULTS SECTION 5.1 GENERAL EFFECTS

Table 5.1.1 Effects across MFIs

Table 5.1.2 Measures taken by MFIs in response to the crisis

N=group of respondents reporting to feel effects of the crisis

No. of MFIs

Percent (x100%)

Restriction of credit disbursed 74 36,00 ,4865

Restriction of clients 74 28,00 ,3784

Stronger focus on portfolio quality 74 69,00 ,9324

Transforming into deposit-taking 74 18,00 ,2432

Attraction of savings 74 16,00 ,2162

Reducing FX exposure 74 26,00 ,3514

Laying personnel 74 6,00 ,0811

Offering counseling services 74 12,00 ,1622

Increasing reserves 74 13,00 ,1757

Focus on part. loanproduct 74 28,00 ,3784

Diversifying loan portfolio 74 41,00 ,5541

Decreasing loan ceiling 74 17,00 ,2297

Diversifying funding sources 74 46,00 ,6216

Total (group of MFIs taking measures) 74

(37)

37 Table 5.1.3 Conditions affecting MFI performance pre-existing

the crisis

N No. of MFIs Percent (x100%) High food prices 82 24,00 ,2927

High fuel prices 82 27,00 ,3293 High inflation 82 30,00 ,3659 Political instability 82 22,00 ,2683 More competition 82 38,00 ,4634 Valid N (listwise) 82

Table 5.1.4 Government programs affecting MFI performance

Soft loan

programs Interest caps

Capital injections Deposit guarantees Higher capital requirements Debt relief programs Social programs Program/policy not implemented in MFIs country 45,9% 69,8% 61,4% 61,1% 69,8% 57,9% 50,9% Program/policy affects MFIs 26,2% 20,8% 12,3% 7,4% 7,5% 14,0% 9,1% Program/policy does

not affect MFIs 27,9% 9,4% 26,3% 31,5% 22,6% 28,1% 40,0%

Total 100,0% 100,0 100,0 100,0 100,0 100,0 100,0

(38)

38 SURVEY RESULTS SECTION 5.2 THE IMPACT ON FUNDING

Table 5.2.1 Impact on Funding after august 2008

No. of respon-dents No changes Impossible to obtain Harder to obtain Debt agreements not renewed Loans recalled early Increased interest rate Disburse- ments delayed Only provided in hard currency Only provided at very short maturities Local commercial banks 61 23% 7% 38% 5% 2% 54% 11% 8% 30% Local NGOs 26 50% 15% 23% 4% 0% 12% 4% 4% 4% Local governments 28 54% 14% 18% 0% 4% 18% 4% 0% 0% Development financial institutions 48 40% 0% 35% 2% 0% 31% 15% 6% 10% Foreign commercial banks and investors 56 25% 0% 43% 5% 7% 52% 16% 32% 13% Foreign NGOs 32 41% 13% 19% 6% 0% 25% 3% 6% 9% Clients' savings and deposits 21 48% 0% 24% 0% 5% 43% 0% 0% 10%

Table 5.2.2 Change in deposits and savings

N

Percent (x100%) No change in deposits and savings 35 ,6286 A significant decrease in savings and deposits 35 ,3714

Valid N (listwise) 35

Table 5.2.3 Reasons for significant decrease in savings

N = Group of MFIs which observed a significant decrease in savings and deposits N

No. of MFIs Percent (x100%) Reason: clients lost confidence 13 1 ,0769 Reason: clients need money for conNo. of MFIsption 13 6 ,4615 Reason: clients need money for investment 13 2 ,1538

(39)

39 Table 5.2.4 MFIs using an emergency facility

No. of MFIs Percent (%) Does not use an emergency facility 60 84,5

Uses an emergency facility 5 7,0 Expects to use an emergency facility in 2009 6 8,5

N 71 100,0

Missing 11

Total 82

Table 5.2.5 MFIs requesting loan rescheduling

No. of MFIs Percent (%) Did not request loan rescheduling 59 83,1 Requested loan rescheduling after august 2008 9 12,7 Expects to request loan rescheduling 2009 3 4,2

N 71 100,0

Missing 11

Total 82

Table 5.2.6 MFIs having problems to meet debt obligations

No. of MFIs Percent (%)18 No problems meeting debt obligations 66 91,7 Problems meeting debt obligations after august 2008 3 4,2 Expecting problem meeting debt obligations in 2009 3 4,2

N 72 100,0

Missing 10

Total 82

18

(40)

40 Table 5.2.7 MFIs having problems paying out withdrawals of savings

(after august 2008)

No. of MFIs Percent (%) No problems paying out withdrawals 42 100,0

Missing 42

Total 84

Table 5.2.8 MFIs experiencing or expecting refinancing problems

No. of MFIs Percent (%) No refinancing problems 54 79,4 Refinancing problems after aug 2008 11 16,2 Expects refinancing problems in 2009 3 4,4

Total 68 100,0

Missing 16

Total 84

Table 5.2.9 Refinancing problems-savings

Savings (0=does not attract savings, 1= does attract savings)

,00 1,00 Total

No refinancing problems Count 41 13 54

% within refinancing problems 75,9% 24,1% 100,0% Refinancing problems after aug 2008 Count 11 0 11

% within refinancing problems 100,0% ,0% 100,0% Expects refinancing problems in 2009 Count 3 0 3

% within refinancing problems 100,0% ,0% 100,0%

Total Count 55 13 68

(41)

41 Table 5.2.10 Refinancing problems-commercial funding

Foreign commercial funding as a % of total liabilities

<25%

Between 25% and

50% >50% Total

No refinancing problems Count 5 12 16 33

% within refinancing problems 15,2% 36,4% 48,5% 100,0%

Refinancing problems after aug 2008 Count 2 1 6 9

% within refinancing problems 22,2% 11,1% 66,7% 100,0%

Expects refinancing problems in 2009 Count 0 1 1 2

% within refinancing problems ,0% 50,0% 50,0% 100,0%

Total Count 7 14 23 44

(42)

42 SURVEY RESULTS SECTION 5.3 FINANCIAL COSTS AND INCOME

Table 5.3.1 Change in cost of funding after august 2008

No. of MFIs Percent (%) Valid No change in cost of funding 26 37,7

Increase in cost of funding 36 52,2 Decrease of cost of funding 7 10,1

Total 69 100,0

Missing Missing 15

Total 84

Table 5.3.2 Change in savings rate after august 2008

No. of MFIs Percent (%) Valid No change in savings rate 33 71,7

Decrease in savings rate 3 6,5 Increased the savings rate 6 13,0 Expect to increase savings rate in 2009 4 8,7

Total 46 100,0

Missing Missing 38

(43)

43 Table 5.3.3 Change in interest rate charged after august 2008

No. of MFIs Percent (%)

No change 31 47,7

Increase in interest rates charged 18 27,7 Decrease in interest rates charged 5 7,7 Expected increase in interest rates charged in 2009 10 15,4 Expected decrease in interest rates charged in 2009 1 1,5

Total 65 100,0

Missing 19

Total 84

Table 5.3.4 Higher cost of funding versus interest rate charged to clients 2008

Change interest rates charged to clients second half 2008 or expected chnage in 2009

(44)

44 SURVEY RESULTS SECTION 5.4 OPERATIONAL COSTS

Table 5.4.1 Change in operational costs

Change operational cost

No. of MFIs Percent (%) Valid No change in operational costs 17 26,6

Increase in operational costs second half 2008 19 29,7 Decrease operational costs second half 2008 4 6,2 Expected increase operational costs in 2009 18 28,1 Expected decrease in operational cost in 2009 6 9,4

Total 64 100,0

Missing Missing 18

Total 82

SURVEY RESULTS SECTION 5.5 IMPACT ON CLIENTS

Table 5.5.1 Reasons for deterioration portfolio quality in 2008/2009

19

N No. of MFIs

Percent (x100%) General macroeconomic conditions 74 57,00 ,7703

Decreased flow of remittances 74 28,00 ,3784 Declined employment 74 45,00 ,6081 Devaluation local currency 74 15,00 ,2027 Higher living expenses 74 20,00 ,2703

Weaker incentives 74 8,00 ,1081

Political instability 74 15,00 ,2027 Valid N (listwise) 74

19

(45)

45 Table 5.5.2 Clients and sectors perceived to be most affected by the current crisis

N No. of MFIs Percent (x100%) Female clients 74 21,00 ,2838 Male clients 74 17,00 ,2297 Rural clients 74 32,00 ,4324 Urban clients 74 49,00 ,6622 Trade/commerce 74 55,00 ,7432 Agriculture 74 17,00 ,2297 Services 74 31,00 ,4189 Manufacturing 74 31,00 ,4189 Valid N (listwise) 74

Table 5.5.3 Loans in which loan losses are perceived to concentrate

N No. of MFIs

Percent (x100%) Smallest lon sizes 74 21,00 ,2838 Medium loan size 74 30,00 ,4054 Large loan size 74 42,00 ,5676

Microentreprises 74 36,00 ,4865

SME 74 30,00 ,4054

Housing 74 16,00 ,2162 ConNo. of MFIser 74 37,00 ,5000

(46)

46 Table 5.5.4 How will clients repay if they are affected in their income

N No. of MFIs

Percent (x100%) Clients will not repay 67 16,00 ,2388 Borrow from other sources to repay 67 20,00 ,2985 Cut on food expenditure to repay 67 5,00 ,0746 Cut on education expenditure to repay 67 8,00 ,1194 Cut back on non-food expenditure to repay 67 38,00 ,5672 Reduce savings and investments to repay 67 37,00 ,5522 Cut back on other expenditures to repay 67 7,00 ,1045

Table 5.5.5 Change in incentives since second half 2008

N No. of MFIs

Percent (x100%)

Incentives not changed 66 33,00 ,5000

Incentives enhanced due to reduced availability from alternative funding sources 66 29,00 ,4394 Incentives decline as clients do not believe to obtain a future loan 66 7,00 ,1061 Incentives decline due to governments programs 66 6,00 ,0909 Incentives decline due to other reason 66 5,00 ,0758

Table 5.5.6 Write-off ratio expected for 2009

(47)

47 Table 5.5.7 Write-off ratio expected for 2010

<0.5% 21 33,9 between 0.5% and 1,25% 15 24,2 Between 1.25% and 2% 12 19,4 Between 2% and 3% 8 12,9 >3% 6 9,7 Total 62 100,0 Missing 20 Total 82

Table 5.5.8 Change of write-offs in 2010 w.r.t. 2009

writeoff ratio expected for 2010 writeoff ratio expected

for 2009 <0.5% between 0.5% and 1,25% Between 1.25% and 2% Between 2% and 3% >3% Total < 0.5% Count 15 2 0 0 0 17

% within writeoff ratio

expected for 2009 88,2% 11,8% ,0% ,0% ,0% 100,0% between 0.5% and

1.25%

Count 6 10 0 0 0 16

expected for 2009 37,5% 62,5% ,0% ,0% ,0% 100,0% between 1.25% and

2%

Count 0 2 9 0 0 11

expected for 2009 ,0% 18,2% 81,8% ,0% ,0% 100,0%

between 2% and 3% Count 0 1 1 6 0 8

expected for 2009 ,0% 12,5% 12,5% 75,0% ,0% 100,0%

more than 3% Count 0 0 1 2 6 9

expected for 2009 ,0% ,0% 11,1% 22,2% 66,7% 100,0%

Total Count 21 15 11 8 6 61

(48)

48 Table 5.5.9 Portfolio at risk >30 + refinanced and restructured loans

Valid <2.5% 15 23,1 between 2.5% and 5% 25 38,5 between 5% and 7% 18 27,7 > 7% 7 10,8 Total 65 100,0 Missing Missing 17 Total 82

SURVEY RESULTS SECTION 5.6A CLIENT GROWTH

Table 5.6.1 Revision clients growth targets due to the crisis

No. of MFIs Percent Percent (%) No revision client growth targets 23 28,0 34,8 Downward revision clients growth targets 28 34,1 42,4 Upward revision client growth target 5 6,1 7,6 Revision for other reason than the crisis 10 12,2 15,2

Total 66 80,5 100,0

Missing Missing 16 19,5

(49)

49 Table 5.6.2 Reasons revisions client growth targets

Groups segregated by revision of client s growth targets Reasons revisions client growth targets N No. of MFIs

Percent (x100%) No revision client growth targets Fewer new clients applying 4 ,00 ,0000

More new clients applying 4 ,00 ,0000 More client drop outs 4 ,00 ,0000 Fewer financial resources 4 ,00 ,0000 More financial resources 4 ,00 ,0000 Stricter policy for accepting new clients 4 ,00 ,0000

Downward revision clients growth targets Fewer new clients applying 28 11,00 ,3929 More new clients applying 28 3,00 ,1071 More client drop outs 28 9,00 ,3214 Fewer financial resources 28 12,00 ,4286 More financial resources 28 1,00 ,0357 Stricter policy for accepting new clients 28 18,00 ,6429

Upward revision client growth target Fewer new clients applying 5 1,00 ,2000 More new clients applying 5 4,00 ,8000 More client drop outs 5 1,00 ,2000 Fewer financial resources 5 1,00 ,2000 More financial resources 5 1,00 ,2000 Stricter policy for accepting new clients 5 2,00 ,4000

Revision for other reason than the crisis Fewer new clients applying 9 1,00 ,1111 More new clients applying 9 2,00 ,2222 More client drop outs 9 3,00 ,3333 Fewer financial resources 9 1,00 ,1111 More financial resources 9 1,00 ,1111 Stricter policy for accepting new clients 9 6,00 ,6667

(50)

50 Table 5.6.3 Reasons for more new clients applying

(1=group which has observed more new clients applying, 0= group which does not observe more new clients applying)

N No. of MFIs

Percent (x100%) 0 Fired workers formal sector seeking a loan 44 11,00 ,2500

More growth opportunities microentreprises 44 8,00 ,1818 Fewer alternative funding sources 44 7,00 ,1591 Indebted people want to pay off loans 44 9,00 ,2045

1 Fired workers formal sector seeking a loan 9 3,00 ,3333 More growth opportunities microentreprises 9 4,00 ,4444 Fewer alternative funding sources 9 8,00 ,8889 Indebted people want to pay off loans 9 4,00 ,4444

Table 5.6.4 Reasons for fewer new clients applying

(1=group which has observed fewer new clients applying, 0= group which does not observe fewer new clients applying)

N No. of MFIs

Percent (x100%) 0 Fewer growth opportunities microentreprises 40 9,00 ,2250

People turn to informal funding sources 40 2,00 ,0500 Valid N (listwise) 40

1 Fewer growth opportunities microentreprises 13 10,00 ,7692 People turn to informal funding sources 13 2,00 ,1538

(51)

51 SURVEY RESULTS SECTION 5.6B LOAN PORTFOLIO GROWTH

Table 5.6.5 Revision growth targets of outstanding loan portfolio

No. of MFIs Percent Percent (%) No change portfolio growth targets 23 28,0 35,9 Downward revision portfolio growth targets 32 39,0 50,0 Upward revision portfolio growth targets 4 4,9 6,2 Revision portfolio growth targets other reasons than crisis 5 6,1 7,8

Total 64 78,0 100,0

Missing 18 22,0

(52)

52 Table 5.6.6 Reasons revision growth targets of loan portfolio

segregated by revision of client s growth targets Groups segregated by revision of

client s growth targets

Reasons revision growth targets of outstanding

loan portfolio N No. of MFIs

Percent (x100%) No change portfolio growth

targets

Lower loan demand 3 ,00 ,0000

Higher loan demand 3 ,00 ,0000

Fewer financial resources 3 ,00 ,0000 More financial resources 3 ,00 ,0000 Stricter policy for approving new loans 3 ,00 ,0000

Valid N (listwise) 3 Downward revision portfolio

growth targets

Lower loan demand 32 20,00 ,6250 Higher loan demand 32 1,00 ,0312 Fewer financial resources 32 12,00 ,3750 More financial resources 32 ,00 ,0000 Stricter policy for approving new loans 32 20,00 ,6250

Valid N (listwise) 32 Upward revision portfolio growth

targets

Higher loan demand 4 3,00 ,7500

Fewer financial resources 4 ,00 ,0000 More financial resources 4 ,00 ,0000 Stricter policy for approving new loans 4 1,00 ,2500

Valid N (listwise) 4 Revision portfolio growth targets

other reasons than crisis

Higher loan demand 5 1,00 ,2000

Fewer financial resources 5 ,00 ,0000 More financial resources 5 ,00 ,0000 Stricter policy for approving new loans 5 5,00 1,0000

(53)

53 Table 5.6.7 Reasons for lower loan demand

(1=group which has observed lower loan demand, 0= group which does not observe lower loan demand)

N No. of MFIs

Percent (x100%) ,00 Fewer growth opportunities for microentreprises 32 4,00 ,1250

People turn to informal sources to obtain funding 32 1,00 ,0313

1,00 Fewer growth opportunities for microentreprises 20 16,00 ,8000 People turn to informal sources to obtain funding 20 4,00 ,2000

a. No statistics are computed for one or more split files because there are no valid cases.

Table 5.6.8 Reasons for higher loan demand

(1=group which has observed higher loan demand, 0= group which does not observe higher loan demand)

N No. of MFIs

Percent (x100%) 0 More growth opportunities microentreprises 46 12,00 ,2609

To compensate for higher living expenses 46 4,00 ,0870 Indebeted clients seeking a loan to meet debt obligations 46 11,00 ,2391 Fewer alternative sources for funding 46 7,00 ,1522

1 More growth opportunities microentreprises 6 ,00 ,0000 To compensate for higher living expenses 6 1,00 ,1667 Indebeted clients seeking a loan to meet debt obligations 6 1,00 ,1667 Fewer alternative sources for funding 6 4,00 ,6667

(54)

54 SURVEY RESULTS SECTION 5.7- EFFECTS ACROSS MFIS

Table 5.7.1 Main effects across institutional size

TIER UNKNOWN TIER-1 TIER-2 TIER-3

Less access to funding ,5000 ,5789 ,4490 ,5000

Higher cost of funding ,5000 ,5263 ,7959 ,7000

Lower repayment rates ,7500 ,6842 ,7143 ,7000 Higher fx losses ,2500 ,3158 ,2653 ,4000 Lower demand ,7500 ,2632 ,3673 ,3000 Higher demand ,2500 ,2105 ,2653 ,6000 Valid N (listwise) ₄ ₁₉ ₄₉ ₁₀

Table 5.7.2 Main effects across institutional type

TYPE

UNKNOWN NGO NBFI BANK OTHER

Less access to funding ,5455 ,5517 ,3929 ,5556 ,4000 Higher cost of funding ,6364 ,7586 ,7857 ,5556 ,4000

(55)

55 Table 5.7.3 Relation effect repayment rates and numbers of competitors

Lowerrepaymentrates No change

repayment rates second half 2008

Lower repayment rates since second

half 2008 Total

Less than 5 competitors Count 6 6 12

% within nocomp2 50,0% 50,0% 100,0%

Less than 10 competitors Count 7 14 21

% within nocomp2 33,3% 66,7% 100,0%

More than 10 competitors Count 1 15 16

% within nocomp2 6,2% 93,8% 100,0% Total Count 14 35 49 % within nocomp2 28,6% 71,4% 100,0% chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square 6,840a 2 ,033 Likelihood Ratio 7,780 2 ,020 Linear-by-Linear Association 6,545 1 ,011 N of Valid Cases 49

(56)

56 Table 5.7.4 Relation effect repayment rates and indebted clients

Effect on repayment rates

No change repayment rates second half 2008

half 2008 Total

No info on concurrent loans Count 2 7 9

% within Concurrentloans 22,2% 77,8% 100,0%

Clients have no concurrent loans Count 0 2 2

% within Concurrentloans ,0% 100,0% 100,0%

Minority of clients have concurrent loans Count 9 24 33

50% of clients have concurrent loans Count 7 16 23

More than 50% has concurrent loans Count 0 1 1

% within Concurrentloans ,0% 100,0% 100,0%

Total Count 18 50 68

Table 5.7.5 Relation between competition and clients with concurrent loans

Concurrent loans No info on concurrent loans Clients have no concurrent loans Minority of clients have concurrent loans

50% of clients have concurrent loans

More than 50% has

(57)

57 Table 5.7.6 MFIs facing a high degree of competition

No. of MFIs Percent (%) Valid Not much competition 17 25,0

High degree of competition 51 75,0

Total 68 100,0

Missing Missing ₁₆

(58)

58 Table 5.7.7 Relation effect repayment rates and periodn installment period

Effect on repayment rates No change

half 2008 Total Weekly Count 2 11 13 % within INstallments 15,4% 84,6% 100,0% Monthly Count 13 35 48 % within INstallments 27,1% 72,9% 100,0% Semiannually Count 2 5 7 % within INstallments 28,6% 71,4% 100,0% Total Count 17 51 68 % within INstallments 25,0% 75,0% 100,0% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 3,263a 2 ,196 Likelihood Ratio 2,830 2 ,243 Linear-by-Linear Association ,087 1 ,768 N of Valid Cases 67

a. 2 cells (33,3%) have expected count less than 5. The minimum expected count is ,76.

(59)

59

Effect on repayment rates

No change repayment rates second half 2008

half 2008 Total Outstanding loans in foreign currency Count 2 1 3 % within currencyassets 66,7% 33,3% 100,0% Outstanding loans in domestic currency Count 9 34 43 % within currencyassets 20,9% 79,1% 100,0% Outstanding loans are

in both domestic and foreign currency Count 6 15 21 % within currencyassets 28,6% 71,4% 100,0% Total Count 17 50 67 % within currencyassets 25,4% 74,6% 100,0% Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square 3,263a _{2 ,196} Likelihood Ratio 2,830 2 ,243 Linear-by-Linear Association ,087 1 ,768 N of Valid Cases 67

(60)

60 Table 5.7.9 Relation effect repayment rates and services provided

half 2008 Total

Only financial services Count 13 25 38

% within services 34,2% 65,8% 100,0%

Additional services Count 5 26 31

% within services 16,1% 83,9% 100,0% Total Count 18 51 69 % within services 26,1% 73,9% 100,0% Chi-Square Tests Value df Asymp. Sig. (2-sided) Exact Sig. (2-sided) Exact Sig. (1-sided) Pearson Chi-Square 2,895a 1 ,089 N of Valid Cases 69

(61)

61 Table 5.7.10 Relation effect repayment rates and average maturity of loan to clients

half 2008 Total

Average maturity < 6mnd Count 1 7 8

% within maturity 12,5% 87,5% 100,0%

Average maturity < 12 mnd Count 7 10 17

% within maturity 41,2% 58,8% 100,0%

Average maturity <18 mnd Count 9 17 26

% within maturity 34,6% 65,4% 100,0%

Average maturity > 18mnd Count 3 10 13

% within maturity 23,1% 76,9% 100,0% Total Count 20 44 64 % within maturity 31,2% 68,8% 100,0% Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square 2,630a 3 ,452 Likelihood Ratio 2,849 3 ,416 Linear-by-Linear Association ,005 1 ,943 N of Valid Cases 64

(62)

62 Table 5.7.11 Relation effect repayment rates and basis on which loans are provided

Effect on repayment rates N No. of MFIs

Percent (x100%) No change repayment rates

second half 2008

cashflow based loans 21 14,00 ,6667 social collateral 21 4,00 ,1905

collateral 21 13,00 ,6190

based on remittances 21 5,00 ,2381 Valid N (listwise) 21

Lower repayment rates since second half 2008

cashflow based loans 52 38,00 ,7308 social collateral 52 16,00 ,3077

collateral 52 27,00 ,5192

based on remittances 52 8,00 ,1538 Valid N (listwise) 52

(63)

63 Table 5.7.12 Survey results: main effects across regions

Effects

Region

Higher Cost of funding

Less access to funding Higher fx losses Lower repayment rates Lower demand Higher demand

NO YES Total NO YES Total NO YES Total NO YES Total NO YES Total NO YES Total Eastern Europe and Russia Count 2 11 13 4 9 13 10 3 13 4 9 13 9 4 13 8 5 13 % within regions 15,4% 84,6% 100,0% 30,8% 69,2% 100,0% 76,9% 23,1% 100,0% 30,8% 69,2% 100,0% 69,2% 30,8% 100,0% 61,5% 38,5% 100,0% South- and South East Asia Count 3 5 8 3 5 8 5 3 8 5 3 8 5 3 8 6 2 8 % within regions 37,5% 62,5% 100,0% 37,5% 62,5% 100,0% 62,5% 37,5% 100,0% 62,5% 37,5% 100,0% 62,5% 37,5% 100,0% 75,0% 25,0% 100,0% Central Asia and

the Caucasus

Count 6 8 14 7 7 14 9 5 14 1 13 14 9 5 14 8 6 14

% within regions 42,9% 57,1% 100,0% 50,0% 50,0% 100,0% 64,3% 35,7% 100,0% 7,1% 92,9% 100,0% 64,3% 35,7% 100,0% 57,1% 42,9% 100,0%

South America Count 2 14 16 11 5 16 13 3 16 6 10 16 11 5 16 13 3 16

(64)

64 SECTION 6 MFI REPORT (ATTACHMENT 1)

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65 SECTION 7 MFI SURVEY

20

(ATTACHMENT 2)

20

MSc. Thesis: The Impact of the current economic and financial crisis on microfinance Appendices

RIJKSUNIVERSITEIT, GRONINGEN

Appendices