Microfinance Market Report 2024

This Microfinance market report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.

The microfinance market size has grown rapidly in recent years. It will grow from $193.85 billion in 2023 to $215.51 billion in 2024 at a compound annual growth rate (CAGR) of 11.2%. The growth observed during the historic period can be attributed to several factors, including the increased usage of digital technology, the commercialization and sustainability of microfinance, a greater focus on responsive lending, improved access to loan facilities, and a rise in the adoption of online platforms for lending.

The microfinance market size is expected to see rapid growth in the next few years. It will grow to $330.98 billion in 2028 at a compound annual growth rate (CAGR) of 11.3%. The projected growth during the forecast period can be attributed to several factors, including evolving regulatory frameworks, a heightened focus on environmental sustainability, rising interest in socially responsible investing, growing demand for microfinance loans, and increasing financial inclusion. Key trends expected during this period include the integration of cloud computing, the use of biometrics and digital identity verification, the expansion of microinsurance and parametric insurance, the incorporation of embedded payments and insurance, and the standardization of digital operations.

The growing number of small and medium-sized enterprises (SMEs) is anticipated to drive significant expansion in the microfinance market. SMEs are defined by their relatively small scale in terms of revenue, assets, and workforce. The rise in SMEs is attributed to increased entrepreneurial activity, advancements in technology that lower entry barriers, supportive government policies, and broader global market access. Microfinance plays a crucial role in supporting SMEs by providing essential access to small loans and financial services, which aids in capital acquisition, cash flow management, and risk mitigation. For example, in February 2024, Startups.co.uk reported a 19.5% increase in new SME businesses in 2023, totaling 39,966 establishments, up from a 6.5% increase in 2022. Overall business incorporations grew by 2% to 778,219 in 2022. This rise in SMEs is thus driving the growth of the microfinance market.

Key players in the microfinance market are focusing on innovative technological solutions, such as digital microfinance platforms, to enhance accessibility, streamline operations, and improve financial inclusion for underserved populations. Digital microfinance platforms offer financial services such as microloans, savings accounts, and insurance through online or mobile-based systems. For instance, in April 2021, Eamar Microfinance, based in Nigeria, launched Yemen’s first digital microfinance platform, providing both financial and non-financial digital services. This platform enables clients to access these services conveniently, offering advisory support, training, and access to e-money and transfers. This initiative aims to promote financial inclusion and support economic recovery amid Yemen’s ongoing humanitarian crisis.

In March 2024, Kotak Mahindra Bank, an India-based private sector bank, acquired Sonata Finance Private Limited for $64.56 million. This acquisition is intended to strengthen Kotak Mahindra’s position in the financial services sector by integrating Sonata Finance Private Limited's operations and leveraging its market presence. Sonata Finance Private Limited is an India-based non-banking finance company (NBFC) specializing in microfinance.

Major companies operating in the microfinance market are Bank Rakyat Indonesia (BRI), Oliver Wyman Group, Bandhan Bank Limited, LendingClub Corporation, ASA International Group PLC, Accion International, Annapurna Finance Private Limited, PRASAC Microfinance Institution Ltd., Prosper Marketplace Inc, Madura Microfinance Ltd, Compartamos Banco, Pro Mujer International, Oikocredit International, Ujjivan Financial Services, Fundación Génesis Empresarial (FGE), Kiva Microfunds, Gojo & Company Inc., FINCA International, Fonkoze Financial Services S.A., Cashpor Micro Credit, Opportunity International, BSS Microfinance Limited, Asirvad Microfinance Limited.

Asia-Pacific was the largest region in the microfinance market in 2023, and is expected to be the fastest-growing region in the forecast period. The regions covered in the microfinance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the microfinance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Microfinance is a financial service designed to offer small loans, savings, insurance, and other financial products to individuals or small businesses that lack access to traditional banking services. It primarily targets low-income populations who are unable to qualify for conventional bank loans due to a lack of collateral, steady employment, or credit history.

The main types of services in microfinance include group and individual microcredit, leasing, micro investment funds, insurance, savings and checking accounts, and others. Group and individual microcredit involve providing small loans to individuals or groups with limited financial resources to support income-generating activities or small businesses. These loans can be offered by banks, microfinance institutions (MFIs), non-banking financial companies (NBFCs), and other entities, serving various purposes such as agriculture, manufacturing or production, trade and services, and household needs. The end users of these services include small enterprises, microenterprises, and solo entrepreneurs or self-employed individuals.

The microfinance market research report is one of a series of new reports that provides microfinance market statistics, including microfinance industry global market size, regional shares, competitors with a microfinance market share, detailed microfinance market segments, market trends and opportunities, and any further data you may need to thrive in the microfinance industry. This microfinance market research report delivers a complete perspective on everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The microfinance market includes revenues earned by entities by providing services such as microloans, microinsurance, money transfers, payment services, and financial education. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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