Kosovo microfinance outreach up by 27% but portfolio growth lags behind

TIRANA, Jan 19؉n its first report on Kosovo microfinance benchmarking, the Microfinance Information Exchange (MIX) has listed the latest trends in Kosovo MFIs.
It showed that the MFIs had increased their borrower base by 20 percent in 2008 and by 27 percent as of 31 October 2009 but the growth in portfolio was slower at 15% in the 3rd quarter of 2009, compared to the increase of 41 per cent in 2008.
Moreover, this is far below the penetration levels reached by other microfinance sectors in the Balkans: 84 per cent in Bosnia and Herzegovina (BiH), 35 per cent in Serbia and Montenegro, and 23 per cent in Albania.
The report has attributed it to the decrease in remittances in Kosovo, in turn reducing the purchasing power of clients. As a result MFIs became more conservative in their lending by disbursing smaller loans, the report said giving figures like – the median indicator for average loan balance per borrower has decreased from 2,023 euros (USD 2,810) in 2008 to 1,904 euros (USD 2,644) in 2009. On the contrary, in previous years it had been continuously rising, the report said.
On the brighter side, the report said in terms of profitability, Kosovo MFIs are on par with peers from the Balkans with adjusted ROA at 1.3 percent, which was higher than the median for the ECA region at 0.3 percent.
Currently there are 14 microfinance institutions operating mainly in rural areas, representing 18 per cent of the financial sector in terms of number of loans and 7 per cent in total loan amount, the report said and added that these figures indicate an overall large number of loans provided in small amounts by MFIs in Kosovo.