The Impact of the Financial Crisis on Microfinance Institutions and Their Clients
May, 2009 Xavier Reille, Christoph Kneiding, and Meritxell Martinez
The global financial crisis is spreading quickly in emerging markets, but little is known about its impact on the microfinance sector. Which regions are most affected and why? Are microfinance institutions (MFIs) proving resilient to this unprecedented economic downturn? How are MFI clients coping? What is the effect of the crisis on MFI business models? And how do MFIs foresee their liquidity situation in the near future?
CGAP surveyed MFIs in March 2009 to monitor the impact of the crisis. Support from MIX, the Microcredit Summit campaign, and large MFI networks enabled wide dissemination. Over 400 MFI managers responded, providing a good representation of regions and institutional sizes. MFI managers from institutions more affected than others might have more incentives to respond, so this analysis recognizes the risk of self-selection bias.
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