In most past financial crises – like those of the 1990s in Asia, Mexico, and Russia – financial services for poor people have been remarkably resilient. In fact, the quality of the loan portfolios of microfinance institutions (MFIs) during the Asian crisis and in Latin America during various banking crises barely quivered, while corporate portfolios collapsed. “Our present crisis is like no other,” says CGAP CEO Elizabeth Littlefield. “Microfinance is far more connected now. While it still has deeply shock-resistant roots, and many places seem unaffected today, there is little doubt that there will be impact.” Integrating microfinance into the mainstream has many benefits but it also has some costs. MFIs that depend on foreign capital investments are suffering, and the medium and longer term effects of a global recession are likely to be hard on microfinance clients in some countries.

It’s in times of crisis that we see what microfinance is really made of. And even as the current global banking mess has gone from bad to worse, recent headlines have global and industry leaders asserting that microfinance can and should be able to withstand it . Yet, other reports strike a more worried tone. Only time will really tell. As the world watches and waits to see just how far this crisis will spread, CGAP expert Kate McKee says with a likely fall in available liquidity to finance MFI growth, some concentration of the microfinance market, and perhaps even consolidation, seems inevitable; and wonders if we need to worry that solid, smaller and less well-known providers, serving important market segments, could lose out.

Many of the world’s life-changing conveniences wouldn’t be possible without utilities. Utilities provide water for drinking, cooking, and washing; and electricity to power everything from light bulbs to vacuum cleaners. But there is another service whose convenience also transforms lives by enabling economic livelihoods and supporting social relationships, but that does not enjoy the benefit of a utility’s delivery infrastructure: electronic cash payments. Being able to make payments conveniently and securely remains an essential ingredient in modern life and commerce. Yet, most people and microenterprises in developing countries must rely on physical delivery of cash or goods to make payments, which imposes large costs and risks. When access to such basic yet powerful payment facilities remains a privilege of the affluent, it’s time for some big new ideas. A new CGAP paper, “Realizing the Potential of Branchless Banking: Challenges Ahead,” offers one vision, looking at what it would take to give every person the option of participating in modern payments networks as if these networks, too, were “utilities” – to perhaps finally help reach the goal of universal access to finance.