Debt Restructuring in Microfinance

The COVID-19 pandemic is making it harder for people around world to sustain their livelihoods. The microfinance providers (MFPs) who serve low-income individuals and small businesses in emerging markets are bracing to weather this storm; however, moratoria and deteriorating portfolio-at-risk rates are putting their liquidity under pressure. Not surprisingly, some MFPs and funders have found themselves gathering around the negotiating table in search of a response to liquidity challenges and potential solvency concerns.

Based on workshops with nearly 300 participants from 30 countries, this COVID-19 Briefing contains insights for creditors and debtors on ways to effectively manage debt restructuring talks, brought on by the COVID-19 crisis.