In Africa, as in the other regions in which the ProCredit group operates, 2009 was one of our most challenging years to date. This was the case in each of the African countries in which we are present-Mozambique, Ghana, the Democratic Republic of Congo and Sierra Leone. The highly uncertain macroeconomic environment, the decline in key exports, and the reduced inflow of remittances from abroad caused severe problems for the small businesses we serve in our lending operations and also had a substantial impact on the lower- and middle-income households who are our deposit customers. However, ProCredit's simple and transparent approach to banking proved to be extremely robust, as was demonstrated by the stability, and indeed growth, of our deposit client base and loan portfolio even under the difficult conditions we faced in 2009. Thanks to our efforts to understand and realistically assess our clients' repayment capacity and their financial constraints, our institutions were able to keep arrears far below the averages for their respective national banking sectors.

In 2009, the ProCredit institutions in Africa continued to grow, and at year-end they had a total of 59 branches and over 2,000 employees. The loan portfolio increased by 18% to over USD 90 million. In the context of a worsening economic environment and widespread uncertainty, the portfolio at risk (over 30 days) initially rose in 2009, reaching a peak level of 5.33% in September. By the end of the year, though, it had declined to 4.91%. The confidence of our customers, and of the public in general, in the ProCredit institutions was highlighted by the continuous growth in the number of depositors we served, which rose to 458,000 by year-end. The total volume of funds which they had entrusted to us stood at USD 184 million.

These figures demonstrate once again that there is a huge demand in African countries for the professional, transparent and responsible banking services that ProCredit offers. At the same time, serving banking markets in Africa poses immense challenges that were made even more daunting in 2009 by the global financial and economic crisis and the increasing prevalence of irresponsible consumer lending practices.

The first challenge we face in Africa stems from the very nature of the markets we seek to serve and the constraints to rapid expansion which are inherent in these markets. Compared with the situation in other regions, developing their potential requires the use of extremely labour-intensive processes; it also generates comparatively slow growth in the volume of banking operations given the low average amounts of loans, deposits and customer transactions that are specific to the target groups of the ProCredit institutions. Together with the generally weak transport and communications infrastructure in our countries of operation, this means that the ProCredit institutions in Africa cannot grow as rapidly as those in other regions, and also that it is more expensive to increase their outreach and market coverage.