Microfinance and Microdcredit, Sustainability of MFIs and Impact of the Financial Crises
|Author:||Mgr. Lenka Dokulilová|
|Year:||2009 - summer|
|Leaders:|| prof. Ing. Karel Janda M.A., Dr., Ph.D.
|Work type:|| Finance, Financial Markets and Banking
|Awards and prizes:|
|Abstract:||Nearly one-sixth of the world’s population lives with income lower than US$ 1 per day. These poor people are classified as non-bankable because of their low or no income, no steady employment, no collateral or no credit history. Despite of these facts, the potential of credit markets in developing countries is high. The microfinance system tries to help these people to establish their own profitable businesses and cross the border of poverty. In these days, microfinance sector has estimated customer base of more than 66 million borrowers globally. Many of MFIs became strong and financially sustainable institutions, unfortunately sometimes they forgot what the initial purpose of their existence was and are focused more on profit than social mission. The microfinance sector is known for its adaptability and quite healthy survival of past financial crises. However, current global financial crisis is testing the resilience of MFIs hardly. The MFIs are much more connected to international financial markets and certainly, they will not survive the crisis without any scratches.|