The Microfinance Contagion Scenario
Harvard Business Review
JUNE 10, 2011
In other words, at current repayments rates, any MFI with more than 12% of its portfolio in AP is at risk of insolvency. That necessarily means that these MFIs will either default on their debt or debt holders will have to renegotiate and take a significant haircut. That's exactly what's happening. That could likely have consequences.
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