All not quite well with microfinance?

While the global eye has been on the traditional capital markets, there are some whispers that perhaps a bit more attention should be cast towards microfinance. After a year of rapid food and fuel inflation, the risk officer of one of the major microfinance networks was recently heard noting that stories are flowing in from affiliates about clients who can no longer repay their loans. Huge shifts in currency markets are also causing some problems: many of the largest MFIs borrow in dollars but lend in local currencies, and many of these have fallen in value by more than half in the last few months. Will we see a microfinance bank default in the coming months? And if we do, will it be a for-profit or a non-profit that goes insolvent?

 
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