Seven Aspects of Loan Size

Attempts to measure the depth of outreach in microfinance usually start—and often end—with loan size. But just what is loan size? This paper discusses seven aspects of loan size, each of which affects not only depth of outreach but also profitability. The seven aspects are: term to maturity, dollars disbursed, average balance, dollars per installment, time between installments, number of installments, and “dollar-years of borrowed resources”. This paper defines the seven aspects, explains why each one matters, and gives examples of their measurement with data from three Latin American microfinance organizations. Author’s note Mark Schreiner is a Senior Scholar in the Center for Social Development at Washington University in St. Louis. He is also a consultant with Microfinance Risk Management, http://www.microfinance.com. He gratefully acknowledges extremely help from the editor and from an anonymous referee, data from three Latin American microfinance organizations, and financial support from the Division of Asset Building and Community Development of the Ford Foundation. This is an earlier version of a paper published in Journal of Microfinance, Vol. 3, No. 2, pp. 27-47. 1 Seven Aspects of Loan Size