Microfinance Market to Grow with a CAGR of 12.05% Globally through 2028
The global microfinance market continues to grow,
offering financial services to underserved populations, fostering economic
empowerment, and supporting sustainable development in emerging economies.
Innovation and digitalization drive its expansion.
According to TechSci Research report, “Global Microfinance
Market - Industry Size, Share, Trends, Competition Forecast &
Opportunities, 2028”, the Global Microfinance Market stood at USD 178.4 billion
in 2022 and is anticipated to grow with a CAGR of 12.05% in the forecast
period, 2024-2028. The Global
Microfinance Market is driven by a commitment to financial inclusion,
technological innovation, government support, private sector investment, and a
focus on social and environmental impact. The industry trends toward digital
transformation, inclusive finance, impact investing, regulatory frameworks, big
data analytics, and sustainable finance. However, it faces challenges such as
overindebtedness, interest rate sustainability, risk management, and the need
for robust regulatory frameworks. Despite challenges, microfinance plays a
crucial role in empowering underserved populations and fostering economic
development, requiring a balanced approach to achieve financial sustainability,
client protection, and social impact.
The Global Microfinance Market is propelled by a
multifaceted interplay of drivers that collectively shape its trajectory and
impact. At the heart of this market lies a commitment to financial inclusion, a
mission that propels Microfinance Institutions (MFIs) to reach underserved
populations, providing them with access to financial tools and services. This
commitment is particularly pronounced in regions where traditional banking services
struggle to extend their reach, making microfinance a vital force in addressing
economic disparities.
Technological innovation stands out as a pivotal
driver, steering the industry towards a digital transformation. The advent of
mobile banking, online lending platforms, and digital payment solutions has
significantly expanded the accessibility of microfinance services. By
leveraging technology, MFIs have been able to penetrate remote and marginalized
communities, making financial inclusion a reality for those who were previously
excluded.
Government support has been instrumental in fostering
the growth of the microfinance sector. Recognizing its role in poverty
alleviation and economic development, governments across the globe have
implemented policies and regulations that support the operations of MFIs.
Financial incentives, grants, and subsidies are often provided to these
institutions, reducing their cost of capital and enabling them to offer more
affordable financial products to their clients.
Private sector investment is another key driver, with
investors increasingly viewing microfinance as an avenue for both financial
returns and positive social impact. Commercial banks, impact investors, and
philanthropic organizations are channeling funds into the sector, empowering
MFIs to expand their operations, develop innovative financial products, and
improve their overall sustainability. The infusion of private capital not only
diversifies the funding sources for MFIs but also brings in valuable financial
expertise.
Browse over xx market data Figures
spread through xxx Pages and an in-depth TOC on "Microfinance Market”
The integration of social and environmental impact
into the microfinance landscape is a defining driver. Impact investing,
characterized by a dual focus on financial returns and positive social or
environmental outcomes, is gaining prominence. Microfinance institutions are
increasingly aligning their operations with sustainable and socially
responsible practices, attracting impact investors who seek to make a
difference while achieving financial goals.
Another driver lies in the establishment of regulatory
frameworks that both facilitate and regulate microfinance activities.
Governments recognize the need for responsible lending practices to protect
consumers and ensure the stability of the financial system. Striking the right
balance between enabling growth and safeguarding against predatory lending
practices is an ongoing challenge, with regulatory bodies playing a critical
role in defining and enforcing standards.
Collectively, these drivers converge to push the
microfinance sector towards greater innovation, outreach, and impact. The
industry trends towards digitalization, offering a broader range of financial
products, incorporating impact investing, implementing effective regulatory
measures, and leveraging data analytics for informed decision-making. These
trends not only address immediate financial needs but also contribute to
broader economic development goals, empowering individuals and communities to
break the cycle of poverty and build sustainable livelihoods. As the global
microfinance market continues to evolve, the synergy of these drivers is
expected to play a pivotal role in shaping its future trajectory.
Non-Banking Financial Companies (NBFCs) have emerged
as a rapidly growing segment in the financial industry. These institutions,
while not traditional banks, offer a range of financial services such as loans,
asset management, and wealth management. NBFCs have gained prominence due to
their ability to serve clients who may not meet the stringent requirements of
traditional banks. They provide flexibility in lending practices and cater to
diverse financial needs. With the ongoing digitization of financial services
and increasing demand for alternative financing options, NBFCs are
well-positioned for continued growth, contributing significantly to financial
inclusion and economic development in many regions.
Major companies operating in Global Microfinance Market
are:
- Annapurna Finance (P) Ltd
- Bank Rakyat Indonesia (BRI)
- Bandhan Bank
- CDC Small Business Finance
- Cashpor Micro Credit
- Grameen America
- Grameen Bank
- Kiva
- Madura Microfinance Ltd.
- Pacific Community Ventures
Inc
Download Free Sample Report
Customers can also request for 10%
free customization on this report.
“The Global Microfinance Market is driven by a
commitment to financial inclusion, technological innovation, government
support, private sector investment, and a focus on social and environmental
impact. These drivers empower Microfinance Institutions (MFIs) to reach
underserved populations, offer diverse financial products, and incorporate
impact investing into their operations. However, challenges like
overindebtedness and regulatory complexities exist. The industry trends toward
digitalization, inclusive finance, responsible lending, and data analytics.
Despite challenges, microfinance remains a crucial tool for economic
empowerment and poverty reduction, requiring a balanced approach to achieve
financial sustainability, client protection, and social and environmental
impact.” said Mr. Karan Chechi, Research Director with TechSci Research, a
research-based management consulting firm.
“Microfinance Market – Global Industry Size, Share,
Trends, Opportunity, and Forecast, Segmented By Provider (Banks, Micro Finance
Institute (MFI), NBFC (Non-Banking Financial Institutions)), By End User (Small
Enterprises, Micro Enterprises, and Solo Entrepreneurs or Self-Employed), By
Region, By Competition, 2018-2028”, has evaluated the future growth potential of Global
Microfinance Market and provides statistics & information on market size,
structure and future market growth. The report intends to provide cutting-edge
market intelligence and help decision makers take sound investment decisions.
Besides, the report also identifies and analyzes the emerging trends along with
essential drivers, challenges, and opportunities in Global Microfinance Market.
Contact
Mr. Ken Mathews
Techsci Research LLC
420 Lexington Avenue, Suite 300,
New York, United States- 10170
Tel: +13322586602
Email: [email protected]
Website: www.techsciresearch.com