Benchmarking Microfinance in Romania: 2019-2023 Overview

The Romanian microfinance sector has experienced significant evolution and growth between 2019 and 2023, as highlighted in the latest benchmarking report by the Romanian MicroFinance Association. This report, the fifth of its kind, provides a comprehensive analysis of trends, impacts, and performance indicators within the sector, comparing them against European benchmarks.

Key Objectives

  • Trend Analysis: Assessing the evolution of microfinance in Romania over the last five years.
  • Impact Assessment: Evaluating the effects of global crises, such as COVID-19 and the Ukraine war, on the sector.
  • Performance Indicators: Presenting and comparing Romania’s financial and social performance indicators with European standards.
  • Promotion and Lobbying: Highlighting achievements to garner support from regulators, investors, and policymakers.

Sector Highlights

  • Growth: The microcredit portfolio increased by 80%, with a notable rise in the number of active clients by 9%.
  • Digitalization: Rapid adoption of digital platforms, with 94% of microfinance institutions (MFIs) implementing digital signatures and 65% digitizing the loan application process.
  • Productivity: Enhanced productivity, with fintechs averaging 142 active clients per employee.

Performance Indicators

  • Portfolio Quality: Despite the pandemic, the portfolio quality remained stable, with minor increases in portfolio-at-risk (PAR) indicators.
  • Operational Sustainability: The sector maintained operational self-sustainability, with established and mature MFIs showing robust performance.
  • Social Inclusion: Significant focus on underserved demographics, with 60% of loans disbursed to women and 24% to rural clients.

Challenges and Opportunities

  • Legal Framework: Need for a more supportive regulatory environment for credit unions and better recognition of MFIs as social economy actors.
  • Funding and Incentives: Continued reliance on European funding programs, with new opportunities emerging through collaborations with the National Guarantee Fund for SMEs.

The Romanian microfinance sector has demonstrated resilience and adaptability in the face of global challenges. With ongoing digitalization efforts and strong performance indicators, the sector is well-positioned to continue its growth and support for underserved communities.