The Microfinance Contagion Scenario
Harvard Business Review
JUNE 10, 2011
But as information trickles out about how bad the repayment situation in AP is, a plausible global contagion scenario is emerging. In other words, at current repayments rates, any MFI with more than 12% of its portfolio in AP is at risk of insolvency. In a recent paper, Jonathan Morduch and Jonathan Conning explain the role of debt and equity financing in the microfinance industry.