‘Today the lending portfolios of microfinance institutions (mfis) are worth a combined $124bn. But the industry is in trouble. Covid-19 is straining its finances. Repayments, usually done in cash and in person, have plummeted, yet the banks and investors which provide the mfis with funds still expect money. A crunch looms. More than two-thirds of mfis have cut lending, often by at least half. Nearly one-third do not have enough cash to meet outflows this quarter. If only this were the industry’s only problem. Compounding it is a set of deeper, longer-standing issues that have begun to undermine its reputation for efficiency and probity.’
Read here (The Economist, August 15, 2020)
