How is over-indebtedness caused?
Microfinance institutions must expand to become financially sustainable. As such, they aim for scale and strive to reach out to more and more clients. In some cases, especially with the entrance of profit driven actors, this leads to an increase in competition and results in institutions reaching out to the same clients in the same (often urban) areas. Some microfinance clients take on loans from two or more different microfinance institutions and enter into the the situation where they cannot repay these loans and become over-indebted. The problem does not occur with other microfinance products like savings and insurances, just because it is not in the clients's interest.
Key
facts and figures
Find out
about our clients
Download social performance Report (1MB)