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FDC 1998-02: Effects on Microfinance of the 1997-98 Asian Financial Crisis

This docment summarizes the results of surveys done through the network of the 'Banking with the poor' project in nine countries in South and Southeast Asia. Follow-up interviews were also conducted with microfinance practitioners, commercial bankers, policy-makers, researchers and donor agencies in Bangladesh, Indonesia, Philippines and Thailand. Results indicate an immediate impact of increased poverty as numbers of potential microfinance borrowers increased. Other early indications of the impact of the crisis include: * Largest impact is on microfinance institutions in Indonesia; * Overall weakening of financial institutions and systems; * Fallen profitability of microfinance institutions because of increased competition and reduced demand for microentrepreneur outputs; * Greatest effect on microfinance institutions serving small business clients rather than the poor; * Fewer government resources for poverty alleviation programmes. Impact on repayment rates, interest rates, and policy environment are also considered in various country contexts.

PinoyME Foundation
Authors Keywords
Conroy, John D.; McGuire, Paul B.; microfinance; Asian financial crisis;
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