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A New Look at Microfinance Apexes

This paper reviews recent experience with apex facilities that support institutions delivering retail financial services to poor and low-income clients. CGAP published its first study of such apexes 10 years ago. That study did not reach categorical conclusions about apex effectiveness, but it did raise some serious concerns about the extent to which apexes supported the development of sustainable microfinance.

Since then, the number of apexes and their total funding have grown a great deal. Apex facilities have become increasingly popular with host-country governments, as well as with development finance institutions (DFIs) and multilateral agencies, such as the European Commission (EC), the Inter-American Development Bank (IDB), the International Fund for Agricultural Development (IFAD), Germany's Kreditanstalt fur Wiederaufbau (KfW), and the World Bank. A 2008 CGAP mapping exercise identified 76 apexes in 46 countries. In 2009, the largest 15 of these disbursed US$1.5 billion. By comparison, total disbursements of all cross-border funders (including bilateral and multilateral donors, DFIs, and microfinance investment vehicles) are roughly US$3 billion annually. Not only has the number of apexes grown, but more individual apexes have accumulated enough years of experience to permit some assessment of their usefulness.

Sub-topics: Funding Trends