Microfinance Report by the Economist Intelligence Unit (EIU)

The Economist Intelligence Unit produced an insightful and detailed report on global microfinance in 2012, available at http://www.eiu.com/Handlers/WhitepaperHandler.ashx?fi=EIU_MICROFINANCE_2012_WEB_1.pdf&mode=wp&campaignid=microscope2012.

Bangladesh, Philippines, and Nepal are covered, among many other countries. Philippines takes 4th place in overall microfinance business environment rankings. Bangladesh takes 41st place, and Nepal 44th. EIU ranked a total of only 55 countries, so Bangladesh and Nepal are near the bottom. Rates to borrowers are high. In Bangladesh a 27% rate cap decreases the quantity of loans available (inflation of 7-12% in 2012), and in Nepal, government subsidies have kept rates at a comparatively low 18-24% (inflation of 7-9% in 2012). In the Philippines, there are only 1 million micro-finance borrowers of 77 million total population (http://www.census.gov.ph/content/philippines-population-expected-reach-100-million-filipinos-14-years).

Given the high interest rates and limited penetration of microfinance, it is unlikely in its current manifestation to have a large effect on development or stability in Nepal, Bangladesh, or the Philippines.

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