While it’s a relatively new financial concept, the concept of microfinance is incredibly powerful. Microloans and other forms of microfinance may have the power to reduce global poverty while providing much-needed financial services to a sector of people that are most commonly underserved by traditional financial products. Not to be confused with predatory payday loans, microfinance products can also be useful for small businesses that have difficulty securing traditional financing.
Microfinance products have slowly been growing since they first arrived in the late 1990s. But are they having the positive impact they should be having in underrepresented populations? Today, we’ll take a closer look at some interesting microfinance statistics to learn more about the state of the microfinance industry and where it’s headed.
26 Key Microfinance Statistics
The microfinance industry serviced 200 million borrowers as of 2020.
Four out of five microfinance borrowers in 2020 were female.
65% of microfinance borrowers live in rural areas where customers are unbanked or underbanked and traditional banking and lending is difficult or impossible.
In 2017, 664,000 microloans were distributed to borrowers.
The microfinance industry has been growing at an annual rate of 11.5%.
The South Asian region of the world is the largest microfinancing market, with 85.6 million borrowers in 2018.
The global microfinance market is projected to reach $342 billion by 2027.
In 2021, the Small Business Administration provided 4,510 microloans to small businesses. The average microloan was $16,557
Before the coronavirus pandemic, microloans had a 98% repayment rate. During COVID-19, that fell to 90%.
The amount of microloans provided by the SBA has increased by 32.6% since 2010.
The SBA issued $74.6 billion in microloans in 2021.
In 2020, 51% of SBA microloans were awarded to minority-owned businesses.
About 80% of the SBA microloans issued in 2020 were used for working capital.
As recently as 2011, only 51% of adults in the world had some form of a bank account.
As of 2021, 76% of adults in the world have some form of bank account, leaving 24% of adults in the world with no form of banking.
Globally, 78% of men have a bank account, while 74% of women do. The popularity of microfinance among women is helping to reduce this gender gap.
About 1.4 billion adults do not have a traditional or mobile banking option as of 2021.
More than two billion people worldwide lack access to financial services.
Less than 20% of borrowers in developing countries obtained their loan from a traditional financial institution.
Globally, the average microloan is $1,000 or less.
Financial inclusion practices such as microlending can help enable 7 of the 17 Sustainable Development Goals laid out by the United Nations.
As of 2022, more than 1.4 billion people were being serviced by the microfinance industry. Of those, more than a million were living in extreme poverty at the time of their loan.
India leads the world in terms of microfinance borrowers, with 50.9 million borrowers as of 2017 — a 5.8% increase over 2016. Vietnam was second, and Bangladesh was third.
The annual growth rate of the microfinance industry from 2008-2017 was 30%.
Amid the COVID-19 crisis, the global market for microfinance in 2022 was estimated at $186.4 billion.
According to the National Small Business Institute, 27% of small businesses were unable to secure traditional financing when they needed it in 2017.