One of the rare American-born folks I’ve met who actually speaks Turkmen (they are nearly all Peace Corps volunteers) recognized my name from reading an interview I gave to Radio Free Europe / Radio Liberty on the state of the Internet in Turkmenistan. He said he had read it recently, though it was from 2011.
I didn’t even remember the conversation, to be honest. But, sure enough, there it is on the site. I am pleased to report that I was able to get a visa to visit my favorite -stan even in spite of this article.
I there is something interesting in there.
Late last month, the Kyrgyzstan’s National Bank abruptly shuttered 94 microfinance lenders, allegedly for charging well above the industry-average interest rate of 38 percent. But observers fear the move will do little to cool what appears to be an overheating microfinance market.
Kyrgyzstan’s poor, unbanked and largely rural population, along with its lax regulatory environment, has triggered a microfinance boom in recent years. A microfinance institution (MFI) can be founded with only 100,000 Kyrgyz soms ($2,175); staff need no expertise in microfinance, let alone banking. With so little data and transparency, a crisis analogous to the US subprime mortgage meltdown of 2008, where the riskiest loans at the fringes of the market ended up sinking the entire economy, is not difficult to picture.
Continue reading Could Kyrgyzstan’s Microfinance Bubble Burst?