Countries & Regions

The Guatemalan microfinance market saw the highest growth in the Central American region in 2010 with total loan portfolio growth of 40% and total borrower growth of 28%. This increase in outreach acted as a driving factor for improved profitability in the sector, leaving Guatemala with average ROA indicators far above the regional averages. The sector does however face legislative challenges as NGO MFIs currently operate without any clear regulatory framework. Multiple drafts of legislation proposed by government actors to address this regulatory gap have met with opposition from various stakeholders throughout the country. An in-depth discussion of the dynamic growth seen in the market and proposed changes to the regulatory framework can be found throughout the Guatemala Country Briefing:

• Overview: Of the 3 types of MFIs active in Guatemala, Banks and Credit Unions account for more than 80% of total loan portfolio. NGO MFIs suffer from lack of clear legislation addressing how they are to operate.
• Supply & Demand: Total loan portfolio across the country grew by 40% in 2010, representing the highest growth in the Central American region. While more than 80% of loans were targeted at supporting micro-enterprises; housing, consumer, and commercial loans also saw significant growth.
•  Performance: Positive trends in profitability in 2010 were marked by the second highest ROA in the Central American region. Guatemalan MFIs also improved overall portfolio quality, reducing PAR > 30 by 22% from the previous year.
• Quarterly Update: Increased remittance flows into Guatemala offer a boost to the microfinance industry, while discussions continue among various stakeholders about how new legislation can best develop a regulatory framework for the sector.

To stay current on Guatemala market level developments and gain deeper market intelligence, learn more about MIX Premium Solutions to see if our premium services are right for you.