Nicaragua's Country Risk Affects Micro-financing
The "No Payment" movement is scaring US and European investors, threatening the arrival of $70 million worth of funds for micro finance companies.
Monday, August 30, 2010
"In the last Central American Microfinance Conference the challenges and opportunities faced by the sector were discussed and the Guatemalan moderator, Reynold Walter, concluded by highlighting that governments should discourage 'no payment' movements, which received a round of applause from the attendees.
By October it is anticipated that the law will be approved after seven years in the National Assembly.
The Alba Caruna cooperative may continue to operate as second-tier bank with microfinancers beyond regulation of the new law.
The Law for the Promotion of microcredit proposed by the government is starting to make sense for the private sector.
Nearly three years after the crisis caused by the No Pago movement, the sector is growing at an annual rate of 12%, driven by traditional credit, micro-insurance, and health services.
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