Posted on July 10, 2009 - by boris

Global crisis to impact MFI’s profitability…

Hindu News posted:

Mumbai (PTI): Surging bad loans, weak managements and fund scarcity could impact the profitability of microfinance institutions across the world in the current year, a survey said.

“The resilience of the global microfinance industry will be put to the test by the economic crisis…microfinance could face a fall in growth and funding because of the global recession and declining investor confidence,” a survey prepared by Centre for the Study of Financial Innovation said.

MFIs, across the world, will face the risks from a slew of factors like surge in bad loans, shortage of liquidity and declining profitability, the survey said.

Besides, the ability of MFIs to manage their way through the crisis owing to the weakness in management and corporate governance are also likely to play a decisive role, the survey said.

The survey, sponsored by Citi Foundation and Consultative Group to Assist the Poor (CGAP), is supported by the Council of Microfinance Equity Funds and refelcts the views of 400 practioners, investors, regulators and analysts in 82 countries.

Source:http://www.hindu.com/thehindu/holnus/006200907100940.htm