Debt Restructuring in Microfinance

The twin global crises of a health pandemic and economic lockdowns are severely harming the livelihoods of low-income people around the world. Many providers driving the financial inclusion of these populations also are at risk. Microfinance providers (MFPs) are bracing themselves to ride out this health and economic storm (Meagher et al. 2020). In addition, moratoria and worsening portfolio-at-risk rates are putting the liquidity of MFPs under pressure (Zetterli 2020). Perhaps not surprisingly, MFPs and funders are returning to the negotiating table to respond to liquidity and, possibly, solvency issues facing distressed MFPs.

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