Microfinance Institutions 'Warm Up' to Savings

The global financial crisis has prompted microfinance institutions to look at the prospects of offering savings accounts to clients, potentially giving variety to what had long been a credit-only service to the poor, The Economist reports.

The report said liquidity problems, heavy financing costs and exchange rate fluctuations have “prompted many ‘credit-only’ MFIs to warm to the idea of funding at least part of their lending activity using local savings.” Only a few MFIs allow deposits, based on studies, but the trend may well be going this direction because of the impact of the tough economic climate.