Microfinance Institutions in Times of Financial Volatility

The client seeks to examine the impact of the current financial volatility on the performance of Microfinance Institutions (MFIs). In the last five to seven years the larger MFIs have become more integrated into the financial markets by increasingly accessing both local and international sources of funding as well as mobilizing deposits from small and large savers.  These large MFIs also constitute a large share of the overall microfinance market in terms of Gross Portfolio Outstanding and number of clients served.  During these times of financial volatility, will the performance of these MFIs remain uncorrelated to overall events?  To what extent will they be affected by reduced liquidity?  How will their borrowers deal with increasing food prices and inflation in some of their countries?  Are these MFIs now more exposed to currency risk, both hard currency and the volatility of their own local currency?  Will these MFIs withstand this current financial crisis?  Blue Orchard Finance will look to the SIPA capstone workshop participants to answer some of these questions through a comprehensive research and interview process which will culminate in a final presentation and report consisting of recommended actions.