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The microfinance market share is expected to increase by USD 122.46 billion from 2021 to 2026, and the market’s growth momentum will accelerate at a CAGR of 11.61%.
This microfinance market research report provides valuable insights on the post-COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers microfinance market segmentation by type (banks and non-banks) and geography (APAC, South America, North America, Europe, and the Middle East and Africa). The microfinance market report also offers information on several market vendors, including Accion International, Al Amana Microfinance, AL BARAKAH MICROFINANCE BANK, Annapurna Finance P Ltd., Banco do Nordeste do Brasil SA, Bandhan Bank Ltd., Cashpor Micro Credit, FINCA International Inc., Fusion Micro Finance Ltd., GENTERA S.A.B. de C.V., Grameen Foundation, IndusInd Bank Ltd., Kiva Microfunds, Kotak Mahindra Bank Ltd., Manappuram Finance Ltd., Opportunity International, Pacific Community Ventures, Pro Mujer Inc., PT Bank Rakyat Indonesia Persero Tbk, Stichting BRAC International, and Women World Banking Inc. among others.
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The quick and easy access to credit is notably driving the microfinance market growth, although factors such as inadequate risk management may impede the market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the microfinance industry. The holistic analysis of the drivers will help deduce end goals and refine marketing strategies to gain a competitive edge.
Key Microfinance Market Driver
Quick and easy access to credit is one of the major drivers impacting the microfinance market growth. Microfinance provides quick and easy access to credit, unlike traditional financial institutions, which may take more than a day to complete the paperwork for the loan application. If the financial institution accepts the application, it may take another few weeks or months before the credit is authorized and transferred. Many banks have policies that restrict them from providing loans to certain businesses, such as restaurants and clinics. The growth of online microfinance platforms has simplified access to funds. Businesses can apply for credit on these platforms within minutes of registering, and the funds are made available instantly once the application is approved. The advent of microfinance platforms enhanced the ease of obtaining loans. Hence, the popularity of microfinance platforms is increasing.
Key Microfinance Market Trend
Rapid growth in APAC is one of the major trends influencing the microfinance market growth. Microfinance institutions, including P2P lending, crowdfunding, and invoice trading, are growing in APAC due to the presence of several SMEs. The number of SMEs has increased significantly in Asian countries. For instance, the number of SMEs in China was approximately 18.07 million by the end of 2018. Similarly, according to the data published by the Ministry of Micro, Small, and Medium Enterprises (MSMEs) of India, as of March 2020, there were 63.3 million (6.33 Crore) SMEs present across India. The growing number of SMEs in APAC is increasing the demand for micro-financial services for business growth. Microfinance solutions and service providers are helping SMEs by strengthening their access to credit and equity, which enables SMEs to invest in growth. Moreover, growing Internet penetration, coupled with the use of smartphones, is encouraging people in APAC to use P2P lending and crowdfunding platforms. This is expected to propel the growth of the global microfinance market in the coming years.
Key Microfinance Market Challenge
Inadequate risk management is one of the major trends influencing the microfinance market growth. Risk management is amongst the most challenging factors impacting the growth of the global microfinance market. Microcredit establishments address marginalized communities, mainly in low-profits and growing countries. The lending procedure in microfinance no longer requires any protection, unlike the formal banking system. Thus, microfinance establishments are constantly on the threshold of vulnerability. Contrarily, customers regularly borrow from a couple of establishments in a quick gap, ensuing in over-indebtedness. For instance, 56% of the borrowers from rural areas are over-indebted in developing countries like India. However, microfinance institutions are continuously facing operational challenges owing to inadequate risk management, but some MFIs are still not in the process of adopting any economic risk management system. Such factors may hamper the growth of the global microfinance market during the forecast period.
This microfinance market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global microfinance market as a part of the global specialized consumer services market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the microfinance market during the forecast period.
The report analyzes the market’s competitive landscape and offers information on several market vendors, including:
This statistical study of the microfinance market encompasses successful business strategies deployed by the key vendors. The microfinance market is fragmented and the vendors are deploying organic and inorganic growth strategies to compete in the market.
To make the most of the opportunities and recover from the post-COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The microfinance market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the microfinance market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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45% of the market’s growth will originate from APAC during the forecast period. China and India are the key markets for microfinance in APAC. Market growth in APAC will be faster than the growth of the market in other regions.
The rapid growth of social media and the increasing number of SMEs and startups will facilitate the microfinance market growth in APAC over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
The outbreak of COVID-19 in 2020 adversely affected the economy in APAC. To limit the spread of the disease, stringent lockdowns imposed in India, China, Bangladesh, Japan, Australia, and other countries led to a halt in banking operations. The demand for loans from other businesses also declined significantly owing to the suspension of operations. These factors negatively affected the growth of the microfinance market in APAC in 2020.
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The microfinance market share growth by the bank segment will be significant during the forecast period. As MSBs offer significant benefits to low-income groups, the demand for microfinancing is expected to rise during the forecast period. Moreover, the need to provide easy credit and offer small loans to customers without any collateral further increases the preference for MFBs among people.
This report provides an accurate prediction of the contribution of all the segments to the growth of the microfinance market size and actionable market insights on the post-COVID-19 impact on each segment.
Banknote market - The market share is expected to increase by USD 2.47 billion from 2020 to 2025, and the market's growth momentum will accelerate at a CAGR of 4.18%.
Microinsurance market - The market share is expected to increase by USD 30.44 billion from 2020 to 2025, and the market's growth momentum will accelerate at a CAGR of 7.40%.
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Microfinance Market Scope |
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Report Coverage |
Details |
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Page number |
120 |
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Base year |
2021 |
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Forecast period |
2022-2026 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 11.61% |
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Market growth 2022-2026 |
$ 122.46 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
9.23 |
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Regional analysis |
APAC, South America, North America, Europe, and Middle East and Africa |
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Performing market contribution |
APAC at 45% |
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Key consumer countries |
Mexico, China, India, France, and Peru |
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Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
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Key companies profiled |
Accion International, Al Amana Microfinance, AL BARAKAH MICROFINANCE BANK, Annapurna Finance P Ltd., Banco do Nordeste do Brasil SA, Bandhan Bank Ltd., Cashpor Micro Credit, FINCA International Inc., Fusion Micro Finance Ltd., GENTERA S.A.B. de C.V., Grameen Foundation, IndusInd Bank Ltd., Kiva Microfunds, Kotak Mahindra Bank Ltd., Manappuram Finance Ltd., Opportunity International, Pacific Community Ventures, Pro Mujer Inc., PT Bank Rakyat Indonesia Persero Tbk, Stichting BRAC International, and Women World Banking Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Five Forces Analysis
5 Market Segmentation by Type
6 Customer Landscape
7 Geographic Landscape
8 Drivers, Challenges, and Trends
9 Vendor Landscape
10 Vendor Analysis
11 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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