Microfinance Banana Skins 2012

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The microfinance industry needs to adjust to rapid changes in its markets if it is to retain its relevance, according to a new survey of the risks facing the sector. The annual Microfinance Banana Skins report ranks the risk perceptions of more than 350 practitioners and close observers of the microfinance scene in 79 countries. These reveal strong concern about the ability of microfinance providers to meet new pressures, particularly those of competition, unsettled economies, and new technology. The main risk identified by respondents is that of overindebtedness among microfinance borrowers. Although the extent to which micro-borrowers face repayment difficulties is not known, more than 60 per cent of respondents ranked overindebtedness as a high level concern, saying it posed both a financial and a reputational risk to the industry.