Archive for: PAR

Daniel Rozas’s “Throwing in the Towel: Lessons from MFI Liquidations” is a useful, timely, concise, and readable study of a half-dozen MFI failures, focusing on efforts by creditors and others to collect the loan portfolio of the defunct institutions.  The topic is an important one: when making a loan to an MFI, lenders often take the MFI’s loan portfolio as collateral to secure their loan in case the MFI defaults.  Likewise, structured finance deals that “securitize” MFI loan portfolios are often based on an assumption that if the MFI gets into trouble, someone else can collect its outstanding microloans.

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At a time when the financial crisis is in most people’s mind, and despite the recent fall in commodities’ prices, we shouldn’t lose sight of the effects of the food crisis on poor people.

The last CGAP blogpost on foodflation spurred discussion on how MFIs and their clients are affected by the crisis. To better understand the implications of the food crisis and the role microfinance could play in coping, we conducted an opinion survey in August (PDF) with the managers of 45 leading MFIs in 16 of the most affected countries.

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