USD 220 billion
Report ID:
SQMIG40F2001 |
Region:
Global |
Published Date: March, 2024
Pages:
207
|Tables:
64
|Figures:
75
Global Microfinance Market size was valued at USD 220 billion in 2022 and is poised to grow from USD 244.20 billion in 2023 to USD 562.77 billion by 2031, growing at a CAGR of 11% during the forecast period (2024-2031).
The expansion of the microfinance market is driven by several significant factors. These include the growth of small and medium-sized businesses, along with increased access to loan facilities for low-income economic groups. The market's growth is further propelled by the offering of financial services that encourage aspiring entrepreneurs to act on their ideas. As a result, the microfinance sector is expanding, and the roles of governments and financial institutions are becoming more pronounced in both developing and underdeveloped countries.
A prominent trend contributing to the growth of the microfinance market is the rising awareness of microfinance, facilitated by improved access to technology. With the enhancement of technological infrastructure and the presence of intermediaries like microfinance credit officers, beneficiaries of microfinance services can conduct transactions conveniently and efficiently. Particularly noteworthy is the growing popularity of microfinance among rural women engaged in cottage industries, as it presents a promising avenue for augmenting household income.
The evolving nature of microfinance is another catalyst for market expansion. The increasing number of microfinance organizations in emerging countries is playing a pivotal role in reducing poverty and enhancing the living standards of the underprivileged population, thereby driving market growth. Furthermore, the shift from traditional lending practices to microfinance solutions, coupled with the advantages of lower operating costs and reduced market risk, is propelling the microfinance market's upward trajectory.
Nonetheless, there are certain challenges hampering the market's growth, including high interest rates and shorter repayment periods imposed by microfinance companies. On a contrasting note, the proliferation of advanced technologies such as mobile banking, ATMs, and point-of-sale systems in the microfinance sector across developing nations represents a significant growth opportunity for the market.
US Microfinance Market is poised to grow at a sustainable CAGR for the next forecast year.
Global Market Size
USD 220 billion
Largest Segment
Banks
Fastest Growth
Banks
Growth Rate
11% CAGR
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The global microfinance market is segmented on the basis of provider, end- user, region. By provider, the market is segmented into banks, micro finance institute (mfi), nbfc (non-banking financial institutions), others. By end - user, the market is segmented into small enterprises, micro enterprises, solo entrepreneurs or self-employed. By region, the market is segmented into North America, Europe, Latin America, Asia- Pacific, Middle East and Africa.
Microfinance Market Analysis By Provider
The dominance during the forecast period rests with banks. This can be attributed to the heightened procurement costs and elevated security associated with the banking system, qualities that generally align with the preferences of microfinance consumers. Nonetheless, it is noteworthy that the demand for non-bank microfinancing services is projected to witness significant growth in the years to come, contributing substantially to market expansion.This suggests a changing landscape where consumers are increasingly open to exploring diverse avenues for microfinance services beyond traditional banking systems.
As financial inclusion continues to gain importance and the microfinance landscape evolves, the competition and collaboration between banks, MFIs, NBFCs, and other providers will shape the market's future trajectory. The ongoing shift in consumer preferences and the growing recognition of the unique advantages offered by non-bank microfinance options are expected to fuel a substantial demand surge in this sector, contributing to the overall growth and diversification of the global microfinance market.
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A noteworthy trend in this market is the substantial dominance of the European and North American regions. This dominance can be attributed to the increasing demand for both individual and small business lending across these areas. Furthermore, the presence of major microfinancing service providers, coupled with their proactive engagement in research and development activities aimed at enhancing security measures, significantly contributes to the anticipated growth of the global microfinance market throughout the forecast period.
Significantly, within the global context, the Asia Pacific region commands a leading share in terms of revenue contribution to the microfinance market. This prominence is primarily underpinned by China and India, which emerge as major drivers within the region. Particularly noteworthy is India's role, where financial institutions have proactively introduced microfinance schemes designed to extend loans to low-income segments of society. This initiative underscores India's position as a leader in the global microfinance market, emphasizing the integral role of microfinance in fostering economic growth and inclusivity.
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Microfinance Market Drivers
Financial Inclusion Initiatives
Small Business Growth
Microfinance Market Restraints
Repayment Challenges
High Interest Rates
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The competitive landscape of the global microfinance market is characterized by a dynamic interplay of diverse players striving to cater to the financial needs of underserved populations and small businesses. Microfinance institutions (MFIs), traditional banks, non-banking financial institutions (NBFCs), and innovative fintech startups contribute to a multifaceted ecosystem.
Prominent players like SKS Microfinance and Bandhan Financial Services from India, Compartamos Banco from Mexico, and Grameen Bank from Bangladesh have established themselves as key contributors to the industry's growth. These players have demonstrated a commitment to financial inclusion by tailoring their services to meet the unique requirements of low-income individuals and micro-entrepreneurs.
The global microfinance market also witnesses participation from international organizations like ASA International, headquartered in the Netherlands, and Opportunity International based in the United States. These entities emphasize cross-border collaboration and the application of innovative business models to enhance the effectiveness of microfinance initiatives
Emerging digital-first players like Equitas Small Finance Bank and Ujjivan Financial Services, both from India, showcase the growing integration of technology within microfinance operations. Their tech-driven approach enables convenient access to financial services and efficient delivery of microloans.
Microfinance Market Top Player’s Company Profiles
Microfinance Market Recent Developments
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Product types team that Collects, Collates, Co-relates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
According to our global microfinance market analysis, the global microfinance market stands as a critical driver of financial inclusion and economic progress. With diverse players, including established institutions and innovative startups, the market reflects a commitment to serving underserved populations and small businesses. The dominance of European and North American regions showcases the influence of demand for individual and small business lending, while Asia Pacific's growth, fueled by emerging economies like India, highlights the sector's potential. Technological advancements, regulatory support, and impact investing further shape the market's trajectory. Ultimately, the global microfinance market's impact transcends financial services, reaching communities and individuals, and contributing to a more inclusive and resilient global economy.
Report Metric | Details |
---|---|
Market size value in 2022 | USD 220 billion |
Market size value in 2031 | USD 562.77 billion |
Growth Rate | 11% |
Base year | 2023 |
Forecast period | 2024-2031 |
Forecast Unit (Value) | USD Billion |
Segments covered |
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Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
Companies covered |
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Customization scope | Free report customization with purchase. Customization includes:-
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Executive Summary
Market overview
Parent Market Analysis
Market overview
Market size
KEY MARKET INSIGHTS
COVID IMPACT
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
For the Microfinance Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Microfinance Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Microfinance Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Microfinance Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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Report ID: SQMIG40F2001