Comments on: Yunus Claims Microfinance Untouched by Global Financial Crisis

By: Will the Global Financial Crisis Hurt Microfinance? | myKRO

Will the Global Financial Crisis Hurt Microfinance? | myKRO — Fri, 10 Oct 2008 17:12:11 +0000

[...] couple of days ago I posted about Muhammad Yunus’ optimistic assertions about how well microfinance is weathering the [...]

By: Ryan Calkins

Ryan Calkins — Tue, 07 Oct 2008 18:56:16 +0000

Thanks, Jim, for the comments. It’s unfortunate that MFIs will pay for the sins of the less credit-worthy. Do you think that there is any chance that investors will see microfinance as a safe harbor in the storm? I can imagine folks pulling there money out of sinking index funds and putting them into Compartamos or one of the commercial Microfinance funds. Or is that just wishful thinking?

By: JimA

JimA — Tue, 07 Oct 2008 11:49:06 +0000

Maybe microfinance hasn’t been hit yet, but it’s when those who fund microfinance institutions (MFIs) get hit and loans to MFIs aren’t made because lenders can’t fund their investments, and the MFI has to cut back lending so loan repayments can be used to repay maturing loans, THEN it will in fact be impacted. New loans to clients won’t happen, as things get worse, loan renewals won’t happen as the MFI will need cash to meet maturing debt obligations. Unless you’re a deposit taking MFI, and only fund your loans with deposits, and you don’t lose any of your depoitors, then yes, perhaps it won’t hit a microfinance as hard. Then, as an MFI, you only have to worry that your clients can withstand the general economic downturn. Aside from those things, microfinance should sail through this crisis unscathed.