MICROCAPITAL BRIEF: European Investment Bank (EIB) Sponsors Research Programs on Rising Risk in Microcredit

The European Investment Bank (EIB) has submitted a call for proposals to select university centers that wish to conduct research on the theme of the rising risk of microcredit, which include possible cause factors, warning signals, current states and future prospects. A grant of EUR 100,000 (USD 143,000) per annum, for the duration of three years, will be provided to finalists.

The regional target of the proposals will focus on, but not be limited to, the African region (including the Middle East North Africa region), and will seek to address the degradation in the quality of microfinance loan portfolios and the subsequent rising credit risk. In this context, EIB invites research proposals which seek to address the following questions: Under what conditions can microcredit maintain sound asset quality and sustainability while expanding its outreach to markets with demand? What is the current state of credit risk, including the level of client over-indebtedness, in African countries and other countries identified as being most at risk? Could there be any warning signals to prevent a potential repayment crisis? What can be learned from the recent crises in microfinance (Morocco, Bosnia, Andhra Pradesh, etc)?

Proposals may be submitted in English or French by September 16, 2011. You may access more information at www.eib.org/universities or contact Ms. Luisa Ferreira at universities@eib.org.

By: Philip E. Hughes III, Research Assistant

About The European Investment Bank (EIB):
The European Investment Bank (EIB) was created in 1958 as the long-term lending bank of the European Union. In addition to supporting projects in EU member states, its main priorities include financing investments in prospective future member states and EU partner countries, principally in the area of small and medium-sized enterprises. In 2010, the EIB approved projects with a total value of USD 110 billion. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.”

Additional Resources:
Source Article: European Investment Bank: The EIB University Research Sponsorship Programme: http://www.eib.org/about/partners/universities/eiburs/index.htm

EIB:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Eur…

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