Microfinance Market Report 2025

The microfinance market size has grown rapidly in recent years. It will grow from $215.51 billion in 2024 to $239.09 billion in 2025 at a compound annual growth rate (CAGR) of 10.9%. The growth in the historic period can be attributed to increased usage of digital technology, commercialization and sustainability, an increased focus on response lending, increased access to loan facilities, and a rise in the adoption of online platforms for lending.

The microfinance market size is expected to see rapid growth in the next few years. It will grow to $366.06 billion in 2029 at a compound annual growth rate (CAGR) of 11.2%. The growth in the forecast period can be attributed to evolving regulatory frameworks, an increasing focus on environmental sustainability, rising interest in socially responsible investing, growing demand for microfinance loans, and increasing financial inclusion. Major trends in the forecast period include the integration of cloud computing, biometrics and digital identity, microinsurance and parametric insurance, embedded payments and insurance, and standardization of digital operations.

The forecast of 11.2% growth over the next five years reflects a slight reduction of 0.2% from the previous projection. This reduction is primarily due to the impact of tariffs between the US and other countries. This is likely to directly affect the US through reduced small loan accessibility, as group lending platforms and mobile banking solutions, primarily sourced from Kenya and the Philippines, become subject to implementation cost increases. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.

The growing number of small and medium-sized enterprises (SMEs) is anticipated to drive significant expansion in the microfinance market. SMEs are defined by their relatively small scale in terms of revenue, assets, and workforce. The rise in SMEs is attributed to increased entrepreneurial activity, advancements in technology that lower entry barriers, supportive government policies, and broader global market access. Microfinance plays a crucial role in supporting SMEs by providing essential access to small loans and financial services, which aids in capital acquisition, cash flow management, and risk mitigation. For example, in February 2024, Startups.co.uk reported a 19.5% increase in new SME businesses in 2023, totaling 39,966 establishments, up from a 6.5% increase in 2022. Overall business incorporations grew by 2% to 778,219 in 2022. This rise in SMEs is thus driving the growth of the microfinance market.

Leading companies in the microfinance market are focused on creating innovative solutions with technological advancements, such as digital platforms, to increase accessibility, streamline operations, and promote financial inclusion for underserved populations. Digital platforms are online systems that allow users to connect, interact, and exchange goods, services, or information, supporting business transactions, communication, and content sharing. For example, in August 2023, the Reserve Bank of India (RBI), India’s central bank, introduced the Public Tech Platform for Frictionless Credit. This initiative aims to improve credit access for micro, small, and medium enterprises (MSMEs) by streamlining credit delivery through financial institutions, thereby fostering greater financial inclusion.

In March 2024, Kotak Mahindra Bank, an India-based private sector bank, acquired Sonata Finance Private Limited for $64.56 million. This acquisition is intended to strengthen Kotak Mahindra’s position in the financial services sector by integrating Sonata Finance Private Limited's operations and leveraging its market presence. Sonata Finance Private Limited is an India-based non-banking finance company (NBFC) specializing in microfinance.

Major companies operating in the microfinance market are Bank Rakyat Indonesia (BRI), Oliver Wyman Group, Bandhan Bank Limited, LendingClub Corporation, ASA International Group PLC, Accion International, Annapurna Finance Private Limited, PRASAC Microfinance Institution Ltd., Prosper Marketplace Inc, Madura Microfinance Ltd, Compartamos Banco, Pro Mujer International, Oikocredit International, Ujjivan Financial Services, Fundación Génesis Empresarial (FGE), Kiva Microfunds, Gojo & Company Inc., FINCA International, Fonkoze Financial Services S.A., Cashpor Micro Credit, Opportunity International, BSS Microfinance Limited, Asirvad Microfinance Limited.

Asia-Pacific was the largest region in the microfinance market in 2024, and is expected to be the fastest-growing region in the forecast period. The regions covered in the microfinance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the microfinance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The microfinance market includes revenues earned by entities by providing services such as microloans, microinsurance, money transfers, payment services, and financial education. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sharp rise in U.S. tariffs and the ensuing trade tensions in spring 2025 are having a considerable impact on the financial sector, particularly in the areas of investment strategies and risk management. The increased tariffs have intensified market volatility, leading institutional investors to adopt more cautious approaches and driving greater demand for hedging solutions. Banks and asset managers are encountering higher costs in cross-border transactions as disrupted global supply chains and declining corporate earnings weigh on equity market performance. At the same time, insurance providers are facing elevated claims risks linked to supply chain interruptions and trade-related business losses. Furthermore, reduced consumer spending and weaker export demand are limiting credit growth and dampening investment appetite. In response to these challenges, the sector must focus on diversification, accelerate digital transformation, and strengthen scenario planning to manage the heightened economic uncertainty and safeguard profitability.

Microfinance is a financial service designed to offer small loans, savings, insurance, and other financial products to individuals or small businesses that lack access to traditional banking services. It primarily targets low-income populations who are unable to qualify for conventional bank loans due to a lack of collateral, steady employment, or credit history.

The main types of services in microfinance include group and individual microcredit, leasing, micro investment funds, insurance, savings and checking accounts, and others. Group and individual microcredit involve providing small loans to individuals or groups with limited financial resources to support income-generating activities or small businesses. These loans can be offered by banks, microfinance institutions (MFIs), non-banking financial companies (NBFCs), and other entities, serving various purposes such as agriculture, manufacturing or production, trade and services, and household needs. The end users of these services include small enterprises, microenterprises, and solo entrepreneurs or self-employed individuals.

The microfinance market research report is one of a series of new reports that provides microfinance market statistics, including microfinance industry global market size, regional shares, competitors with a microfinance market share, detailed microfinance market segments, market trends and opportunities, and any further data you may need to thrive in the microfinance industry. This microfinance market research report delivers a complete perspective on everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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