The Global Financial Crisis: What does it mean for microfinance?

In most past financial crises – like those of the 1990s in Asia, Mexico, and Russia – financial services for poor people have been remarkably resilient. In fact, the quality of the loan portfolios of microfinance institutions (MFIs) during the Asian crisis and in Latin America during various banking crises barely quivered, while corporate portfolios collapsed. ”Our present crisis is like no other,” says CGAP CEO Elizabeth Littlefield. ”Microfinance is far more connected now. While it still has deeply shock-resistant roots, and many places seem unaffected today, there is little doubt that there will be impact.” Integrating microfinance into the mainstream has many benefits but it also has some costs. MFIs that depend on foreign capital investments are suffering, and the medium and longer term effects of a global recession are likely to be hard on microfinance clients in some countries. http://www.cgap.org/p/site/c/template.rc/1.26.4511

Advertisements

One thought on “The Global Financial Crisis: What does it mean for microfinance?

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s