Global Microfinance Market Size, Demand, Company Analysis, Report 2031

(MENAFN- Straits Research) Microfinance is a financial service industry that provides banking and financial services to those who do not have access to traditional banking institutions, usually in underserved and low-income areas. The primary goal of microfinance is to alleviate poverty and promote economic growth by providing financial resources to people typically excluded from regular financial institutions. The microfinance market share is predicted to grow at an 11.3% CAGR because of the rising demand for governments in emerging economies to create jobs to promote economic growth. The engagement of governments and financial institutions in emerging and developing nations in providing financial services to assist entrepreneurs in implementing their ideas creates new opportunities in the microfinance industry.
Market Dynamics
Financial Inclusion Initiatives to Promote Market Growth
Financial inclusion initiatives include government regulations, international programs, and financial institutions' efforts to provide low-income populations with affordable financial services. These measures alter microfinance market trends. The Indian PMJDY One of the world's largest financial inclusion programs, PMJDY, debuted in 2014. It attempted to give every Indian household a savings bank account, insurance, and financial services. The effort entered millions of unbanked people into the financial system.
M-Pesa, founded by Safaricom, transformed financial inclusion in Kenya without government involvement. This mobile money network lets people send and receive money, pay bills, and use other financial services on their phones, even in areas with little banking infrastructure. M-Pesa shows how technology can boost financial inclusion. According to the World Bank's Global Findex database, financial institution and mobile money account holders increased from 63% to 71% globally between 2017 and 2021. Financial inclusion policies have boosted access to financial services and facilitated microfinance company operations.
Digital Transformation Create Tremendous Opportunities
Digital transformation in microfinance involves using technology to improve MFI efficiency, reach, and impact. Digital payments, online loan processing, mobile banking, and data analytics are among the changes. Tala, a fintech firm, provides microloans to impoverished people in Africa, Asia, and Latin America using digital technologies. Tala uses smartphone app-based lending algorithms to evaluate creditworthiness and issue loans quickly. GSMA statistics show that mobile phone penetration has expanded dramatically in emerging countries.
By 2022, Sub-Saharan Africa and South Asia will have approximately 5.4 billion unique mobile consumers. By 2022, the GSMA expects 1.6 billion mobile money accounts. Digital transformation makes microfinance services more accessible to underprivileged individuals, enhances operational efficiency, decreases costs, and improves data-driven decision-making.
Regional Insights
Asia Pacific generates the largest microfinance revenue. India, Bangladesh, Indonesia, and Vietnam drive regional market expansion. India has the world's largest microfinance industry. Government efforts to boost MSMEs and several microfinance institutions drive India's market growth. To counter COVID-19 losses, India provided a collateral-free credit for MSMEs totaling USD 30 billion. Indian financial institutions' low-income loan microfinance schemes put the country at the forefront of the sector. Government attempts to decrease poverty and improve the population's standard of living have driven this growth in the microfinance sector. The majority of individuals live in rural areas without regular financial services. Thus, microfinance is becoming crucial in providing financial services to this overlooked community.
Europe is the second largest contributor. Germany, the UK, and France drive microfinance expansion in Europe. Due to its expanding role in financial inclusion and entrepreneurship, microfinance institutions and associated legislation have emerged. Microfinance banks, NGOs, cooperatives, and social enterprises offer financial services to individuals and small businesses focusing on social impact and sustainable development. In Europe, microfinance regulations vary by country. Some nations have dedicated microfinance laws and regulatory bodies, whereas others incorporate them into financial regulations. Despite being smaller than other regions, Europe's microfinance business is increasing because of banks, specialized providers, and impact investors. Financial inclusion, entrepreneurship, and marginalized people's financial needs remain priorities across the continent.
Key Highlights

The global Microfinance market size was valued at USD 213.68 billion in 2022 and is projected to reach USD 524.84 billion by 2031, registering a CAGR of 10.5% during the forecast period (2023-2031).
Group and individual micro-credit, leasing, micro-investment funds, insurance, savings and checking accounts, and others are all subcategories of type. The most common service type in the market is group and individual microcredit.
Providers can further subdivide the category into banks and non-banks. Banks have the biggest market share.
Depending on the region, the market is analyzed in North America, Asia-Pacific, Europe, and LAMEA. Asia-Pacific dominates the market.

Competitive Landscape
The key players in the global Microfinance market are JPMorgan Chase & Co., Banco do Nordeste do Brasil S.A., Access Microfinance Holding AG, Al-Barakah, Microfinance Bank, Fusion Micro Finance Ltd., Annapurna Finance (P) Ltd., Asirvad Micro Finance Limited, Bandhan Bank, Belstar Microfinance Limited, Bopa Microfinance, BRAC, BSS Microfinance Limited, Cashpor Micro Credit, CDC Small Business Finance Corp., Citigroup, Inc., GC Business Finance, Gojo & Company, Grameen America Inc., IndusInd Bank Ltd., Khushhali Bank, Kiva, LiftFund, Madura Microfinance Ltd., Manappuram Finance Limited, Microfinance Ireland DAC, Equitas Small Finance, Microlend Australia Ltd., NRSP Microfinance Bank, Pacific Community Ventures, Pro Mujer Inc., PT. Bank Rakyat Indonesia (Persero) Tbk., Sathapana Ltd., Satin Creditcare Network Limited, SPBD Microfinance Holdings (Singapore) Pte. Ltd., and Ujjivan Small Finance Bank Limited.
Market News

In June 2023, JPMorgan Chase announced new commercial and philanthropic initiatives to help close the housing affordability gap in Washington, D.C., and abroad.
In September 2023, BNB, MDS, and the RN government collaborated to expand microcredit and social inclusion.

Global Microfinance Market: Segmentation
By Service Type

Group and Individual Micro Credit
Leasing
Micro Investment Funds
Insurance
Savings and Checking Accounts
Others

By Providers

Banks
Non-Banks

By Region

North America
Asia-Pacific
Europe
The Middle East and Africa
Latin America

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