2006 Russia Microfinance Analysis and Benchmarking Report - Russian
The microfinance sector in Russia is home to more than 2000 microfinance institutions (MFIs), scattered across different regions. Most of these institutions are relatively small, although there is a small group of large-scale providers. Growth has been rapid in the aggregate, but is still often slow at the institutional level. In part, this structure is due to the legislative environment in Russia, which allows for several different legal forms, some with limitations on their expansion; and in part it is due simply to the demographics and geography of Russia, with the most underserved populations often far outside major urban centers, spread across 11 time zones and a territory of 17 million square kilometers. Nonetheless, about 8- 10 percent of the microfinance institutions in Russia operate efficiently with loan portfolios in excess of one million USD .
Loan portfolios have grown by 20 percent annually, with 3.5 times expansion of the sector between 2003 and 2006, as shown in Figure 1. Due to the presence of hundreds of credit unions in the sector, much of this growth
has been financed through savings, although commercial banks and international investors are beginning to take a larger role. However, sustainability has also been a challenge as well and one primary cause is the high cost of savings for Russian MFIs. Almost half of Russian MFIs do not cover their adjusted costs, with some paying deposit rates in excess of 20 percent.
This report looks in detail at Russian microfinance institutions by type, size, age, and other factors driving their development. The report uses two data sets: 1) a broad set of high-level trend data for approximately 183 microfinance providers in Russia provided through the Russian Microfinance Center ( RMC ) and 2) a more detailed sampling of performance data for 20 institutions participating in annual benchmarks with RMC and the Microfinance Information Exchange ( MIX ). The report also provides an analysis of Russian legislation regarding microfinance, development tendencies within the sector, and the major characteristics of Russian microfinance institutions. This analysis helps to identify the factors influencing the development of the microfinance industry in Russia and leading to broader access to financial services for the population.
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