The Subprime Crisis & Implications for Microfinance (SVMN, 05/18/08)

Building Financial Systems for the Poor Meditations on the US Sub-Prime Crisis: Implications for International Microfinance Silicon Valley Microfinance Network May 19, 2008 Kate McKee

Recent Headlines ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

A few statistics . . . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What in the world does sub-prime have to do with microfinance? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Observation #1 – Unsustainable products and practices ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Implications for MF – The products ,[object Object],[object Object],[object Object],[object Object],[object Object]

Implications for MF – The products (2) ,[object Object],[object Object],[object Object],[object Object]

Observation #2 – Buyer bias, wishful thinking ,[object Object],[object Object],[object Object],[object Object],[object Object]

Implications for MF – the buyer side ,[object Object],[object Object],[object Object],[object Object],[object Object]

Observation #3 – shaky processes, skewed incentives, and moral hazard ,[object Object],[object Object],[object Object],[object Object],[object Object]

Implications for MF – credit analysis, partners and the players in the chain ,[object Object],[object Object],[object Object],[object Object]

Observation #4 – Investors in the “slice-&-dice” finance world ,[object Object],[object Object],[object Object],[object Object]

Implications for MF – The climate for investment ,[object Object],[object Object],[object Object],[object Object]

Observation #5 – Regulators in the hot seat ,[object Object],[object Object],[object Object],[object Object],[object Object]

Implications for MF – Regulation ,[object Object],[object Object],[object Object]

South Africa National Credit Act ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

South Africa National Credit Act -- impact ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Will the Act have unintended consequences? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Some closing thoughts ,[object Object],[object Object],[object Object],[object Object],[object Object]

Thanks! Kate McKee, kmckee@worldbank.org Senior Policy Advisor CGAP Washington DC

Building Financial Systems for the Poor Thank you!

The Subprime Crisis & Implications for Microfinance (SVMN, 05/18/08)

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