Get ready for the next victim of the global credit crunch - microfinance. (Pascal Lamy's warning yesterday about a squeeze on trade finance is already old news in the quickly moving financial crisis.) For-profit microfinance institutions will find it harder and harder to find financing. MFIs will have to rely more heavily on donor support to continue their operations. It will be interesting to see how the contentious issue of commercialization plays out during the squeeze. And to top it all off, MFIs will have to decide whether to ration scare capital to fewer borrowers or charge higher rates (or some combination of both).
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