Growth and vulnerabilities in microfinance

Abstract

This focus note begins by briefly telling the story of recent growth in the four countries leading into the credit delinquency crises. The second section describes the key contextual factors that affected the severity and spread of the crises. The third section breaks down the three internal industry vulnerabilities that lie at the heart of the problems. This is followed by a discussion on how market infrastructure and tools can help to mitigate some of the dangers. The note concludes by placing these experiences within the broader context of the global microfinance story and makes recommendations to strengthen the industry.