4.3.4 Sources of funding
The surveyed MFIs rely on three main sources of funding: the
deposits, the equity and the borrowings.
71% of MFIs rely on deposits as main source of funding which
contributed in 2011 for 38%, 42%, 53%, 48% and 50% of the financial structures
of MFIs of Malicounda, Dakar, Tattaguine, Pékesse and
Méckhé severally. This situation corroborates the legal status of
these MFIs to collect first savings then to redistribute them as credit. For
the 29% remaining, their main source of funding is borrowings with 50% and 59%
for MFIs of Podor and Daroukoudoss respectively.
The figure 7 hereafter shows the borrowing capacity of the
MFIs.
Figure 7: Leverage
(Debt/Equity)
/X: The real value is X times de value on the
figure
Source: Our survey (may-august
2012)
The analysis of the figure 7 reveals that at the MFI of Dakar
(MEC FAM) the leverage ratio varied tremendously from high negative ratios in
2009 and 2010 to a highly positive figure in 2011. The negative figures in 2009
and 2010 are mainly due to the loss in equity during those periods. The equity
itself has been influenced by the negative figure of retained earnings over
years. The highly positive ratio in 2011 entails that the MFIs is borrowing
more than it should and might jeopardize its depositors albeit the decrease in
savings mobilization. Indeed, for Périlleux (2010), the higher the
external financing, the more borrowers prevail, thus threatening savings and
credit unions' viability. Therefore, the MFI should adopt new policies aiming
at boosting its equity capital in the perspective of lowering the leverage
ratio.
In contrast, most of the other MFIs showed a cushioning
situation in 2010 and 2011. This implies that they can still have access to
long term borrowed funds except at the MEC of Malicounda which recorded
impressive leverage (113%) in 2010 mainly due to loss in equity while at the
same time their liabilities increased, peculiarly the long term borrowed funds.
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