Posts Tagged ‘crisis’
Posted on December 4, 2008 - by James
Microfinance Still Hums, Despite Global Financial Crisis
When the rich suffer, so do the poor. Or so goes the trickle-down theory. It turns out, though, that the spreading of global financial pain is far from simple. The microfinance industry, for instance, may be resistant to some of the volatility now plaguing financial markets. That’s because those who borrow in small amounts from micro lenders often work on projects unaffected by large-scale global banking travails. Recent studies have confirmed the robust reliability of borrowers at the bottom end of the global income scale. The world’s poorest are affected, though, by commodity price volatility and fluctuating food and fuel costs. Mary Ellen Iskenderian, CEO of Women’s World Banking, a global network of 54 microfinance institutions and banks in 30 countries, spoke to Time’s Jeremy Caplan recently about how the financial crisis has affected those on the lower rungs of the world’s economic ladder… [click here to read the rest of this article...]
Posted on November 18, 2008 - by James
Reuters: Global Credit Crisis Hurts MiFi in South Asia…
MUMBAI (Reuters) - A global credit crisis that has felled large investment banks and prompted multi-billion dollar bailout packages is also hurting unlikely victims half a world away: small south Asian businesses dependent on microfinance.
Microfinance has helped poor women and farmers in Bangladesh and India set up businesses and grow crops since the 1970s.
But as credit tightens and largesse from corporations and socially-minded investors dries up, microfinance will be hit, impacting poor people who have no other access to finance… [click here to read the rest of this article...]
Posted on November 4, 2008 - by James
MFIs face challenge of global meltdown
HYDERABAD: Financing FOR the poor is getting more frugal now with microfinance institutions facing the heat of the global financial meltdown. There has been a virtual halt in fresh disbursements to MFIs by banks and financial institutions coupled with over 200 basis points hike in interest rate. It does not end at credit squeeze alone. Banks are also asking for personal guarantees of directors of MFIs… [click here to read the rest of this article...]
Posted on October 29, 2008 - by lincolnw
Global Economy Tests African Microcredit Channels
Amid growing signs that the global economy is worsening, the White House yesterday extended an invitation to developing countries to attend a summit next month in Washington with leaders of the world’s wealthy economies.Faced with rising food and fuel prices, some of Africa’s poorest nations are struggling to lower earlier projections of economic growth by focusing on how to satisfy the basic day-to-day needs of their citizens. One avenue for attracting investment needed to keep capital flowing in to local African businesses and public works is the practice of microfinance, or supplying credit to the poor at agreed-to, flexible rates which they can afford to pay back in an acceptable time frame.But the director of the Microcredit Summit Campaign Sam Daley-Harris says that tightening pressures are being felt even in low-end borrowing circles and that such small but essential programs that can make a difference for Africans facing dire poverty are also feeling the effects of the global financial pinch…{click this link to read the rest of the article}
Posted on October 21, 2008 - by James
Muhammad Yunus on the Financial Crisis…
A Nobel Prize-winning academic turned micro-finance banker for the poor has important advice for Washington. Muhammad Yunus believes that the government bailout of the banking system is but the first step in redesigning the global credit system. In the end, Yunus believes that a new self-correcting market system will have to be created.
In 1983, Muhammad Yunus set up the Grameen Bank in Bangladesh and ushered in the era of micro-finance andsocial entrepreneurship. By offering tiny amounts of credit to poor people, mostly women, to finance small businesses, he contradicted the established banking norms of the day. As a consequence, he received an unrelenting barrage of criticism from bankers and economists… [click here to read the rest of this article...]
Posted on October 1, 2008 - by James
Global credit crunch affects microfinancing…
The global credit crunch has led to a significant drop in fund flow to the microfinance sector.
Banks, which are required to provide 32-40 per cent of their loans to the priority sector (which includes rural credit), are the largest providers of funds to MFIs.
They lend to microfinanciers, who then on lend to the poor at a higher rate.
But with banks’ lending rates rising more than 200 basis points over the last quarter, microfinanciers are finding it tough to get enough funds to sustain business.
“We raised money a couple of months ago so we are safe. But for entities that didn’t, it’s going to be very difficult,” said K. Vinod Kumar, Assistant Vice-President, member services at SKS Microfinance.
Microfinanciers don’t want to raise lending rates themselves —- they already hover around 20 per cent plus —- as it would mean a reduction in business and would hamper expansion… [click here to read the rest of this article...]
