New CGAP Report Finds that Vulnerabilities are Related to Fast Growth in Microfinance

According to a new report by CGAP, recent repayment troubles in four rapidly-growing microfinance markets do not stem from the financial crisis but from the way that microfinance operates in fast-growth markets. The report examines recent repayment troubles in four rapidly-growing but disparate microfinance markets - Nicaragua, Bosnia and Herzegovina, Morocco, and Pakistan - and concludes that the problems observed are closely associated with the growth phases each country experienced from 2004 to 2008.

Far from being the root cause of the problems in these countries, the authors argue that microfinance globally has weathered the difficulties of the financial crisis relatively well, giving observers confidence that microfinance will emerge strong from the crisis.

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