Beirut - May 2009 State of the Industry in 2008 Ranya Abdel-Baki Transparency & Research Manager Sanabel 6 th Annual Conference Sanabel – The Microfinance Network of Arab Countries

Data Collection & Resources Primary Sources: Sanabel Annual Industry Survey FY 2008 data Sample: 363 Arab MFIs Benchmarks (Sanabel/MIX Annual Data Collection for MBB) FY 2007 data Sample: 48 Arab MFIs Fixed Sample Benchmarks FY 2004 FY 2008 data Sample: 20 MFIs Secondary Sources: CGAP Funders Survey (FY 2007)

The Region in a Snapshot: Overview Median Age 9.75 years8.5 years Number of Branches 2,5421,960 Number of Employees 21,80818,984 Percentage of Female Employees 31%32% Number of MFIs with HR Managers 37 MFIsNA Sanabel Annual Industry Survey 2008

The Region in a Snapshot: Financial Services in 2008

The Region in a Snapshot: Non-Financial Services in 2008

The Region in a Snapshot: Outreach & Scale in 2008 Sanabel Annual Industry Survey 2008 : Number of Borrowers million2.985 million % Women Borrowers 62%59% % Rural Borrowers 40%42% % Borrowers Below Poverty Line 60%63% Gross Loan Portfolio USD billionUSD billion Average Loan Balance USD 475USD 471

The Region in a Snapshot: Outreach & Scale in 2008 Sanabel Annual Industry Survey 2008 : Top MFIS# of Borrowers % of Borrowers from Total Outstanding GLP (USD) % of GLP from Total Top 5 MFIs 1,337,59743% 720,714,16148% Top1 0 MFIs 1,866,80659%901,655,20760% Top15 MFIs 2,194,51770%1,003,671,76462% Top 20 MFIs 2,338,82974%1,079,579,44072%

Outreach: Breakdown by Country in 2008

Scale: Breakdown by Country in 2008

Growth in Outreach and Scale ( ) Fixed Sample

Growth in Average Number of Borrowers and Percentage of Women Borrowers ( ) Fixed Sample

Change in Financial Structure in Arab Region (2007)

Funding in the Region: Amount (2007) Total Amount Committed by Funders in USD Million: Source: CGAP, “Who is Funding Microfinance? Results of the First Global Survey of Funders”, Microfinance Portfolio, November 2008.

Funding in the Region: Key Players (2007) Breakdown by Type of Funder Source: CGAP, “Who is Funding Microfinance? Results of the First Global Survey of Funders”, Microfinance Portfolio, November 2008.

Funding in the Region: Financial Instruments (2007) Breakdown by Financial Instrument Source: CGAP, “Who is Funding Microfinance? Results of the First Global Survey of Funders”, Microfinance Portfolio, November 2008.

Funding in the Region: Recipients (2007) Breakdown by Countries < 50 million50 — 100 million100—300 million> 300 million AlgeriaPalestineEgyptMorocco DjiboutiSyria IraqTunisia JordanYemen Lebanon Source: CGAP, “Who is Funding Microfinance? Results of the First Global Survey of Funders”, Microfinance Portfolio, November 2008.

Breaking Down Return on Assets (2007)

Yield on Portfolio ( )

Portfolio Quality in 2008

Legislation Highlights in 2009 Developments EGYPTSingle Regulators Law was passed Consultation Event on the Draft General Rules for MFC was held on May 4 th 2009 USAID EMF/CGAP working with MoSS on transformation plan YEMENOn March 22 nd 2008 Parliament approved the new microfinance law allowing for the establishment of microfinance banks

Conclusion: Future Outlook Only strong sustainable MFIs are able to survive By doing what? Addressing key human resource challenges and align staff with MFI strategy Carefully selecting clients and matching products with client needs Clearly disclosing loan terms to clients and properly evaluating creditworthiness and repayment ability Introducing innovations and establishing market niches Securing funding and diversifying funding sources on the medium to long terms Applying sound governance and risk management practices