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.

    About the author

    • Tarra Quismundo

      Tarra Quismundo joined Devex Manila as a staff writer in October 2009 after more than six years of working as a reporter for the Philippine Daily Inquirer, a nationwide daily, for which she covered major breaking news in politics, military, police and international affairs. Tarra's Devex News coverage focuses on key Asian donors and top aid officials around the globe.