Elizabeth Littlefield

Throughout past financial crises—especially those of the 1990s (Mexico, Asia, Russia)—financial services for poor people have shown remarkable resilience to shock. In fact, the loan portfolios of microfinance institutions (MFIs) in Asia during the Asian crisis and in Latin America during various banking crises in that region barely blinked while corporate portfolios collapsed.

This is because these banking and currency crises had little relevance to subsistence-based economies in closed ecosystem markets. Our present financial crisis is like no other, and microfinance is far more connected now. Although microfinance still has deep shock-resistant roots, there will be impact—both on the institutions and the clients they serve. The medium and longer term effects of a global recession are likely to be punishing to poor people.

Read the rest of this page »

When a family already spends 80% of their income on food and the prices double – what do they do? The food crisis affects poor people most acutely. Foods that are mainly consumed by the poor have seen some of the largest price rises; sorghum rose 95% in 2007-8. Some of the causes of the food crisis – food shortages, un-manageable price increases for poor and very poor households, and export controls – demand rapid action. Others – such as increased bio-fuel production, low agriculture productivity in Africa, and weak market infrastructures – will require longer term solutions.

Read the rest of this page »

We’re launching this blog as a way for CGAP’s microfinance specialists to talk about research they are working on and to share interesting observations about issues around access to finance that they come across from their study, mission and advisory work. We hope that you’ll enjoy the opportunity to engage in the conversation, and share your own observations by providing your comments and responses to relevant posts.

Read the rest of this page »