Flooding financial institutions with cash just because there is a crisis at hand isn’t the answer - especially if much of that cash flows back out to debt redemptions of other investors.
A final point. All the analysis in this paper is based on data that is four years old. New, current data that reflects the market reality will be needed to make decisions about specific markets and institutions. We at e-MFP stand ready to support collection and sharing of such data to inform the sector. But even this analysis, we believe, already provides a useful template for thinking about the complex issues and trade-offs ahead.
Daniel Rozas is Senior Microfinance Expert at e-MFP
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