Microfinance loans are regarded as an important instrument for promoting financial inclusion and supporting economic activity in low-income regions. Recurring over-indebtedness crises – currently in India and Cambodia, for example, and in the past in Nicaragua, Bolivia, Pakistan, and Bosnia and Herzegovina, among others – nonetheless raise questions about the risks of commercial microfinance models. Not least, an article published in the Wall Street Journal in June 2026 has reignited the debate about the role of microfinance loans and the responsibility of the actors involved.

What factors contribute to the emergence of such crises? And how can microfinance institutions, investment managers, investors, and civil society effectively help to prevent over-indebtedness risks?

This workshop offers space for exchange and discussion on these questions. The aim is to develop a deeper understanding of the risks of commercial microlending and to discuss approaches for addressing these risks effectively.

The workshop focuses on topics including:

Over-indebtedness risks: the vulnerable circumstances of target groups and cost pressures in global value chains
The anatomy of past and present crises: lessons from over-indebtedness crises in India and other countries
What works? Preconditions for responsible microcredit offerings: insights from research
Challenges of existing approaches to preventing over-indebtedness: the practices of international development banks and client protection standards
Requirements for responsible microlending and investment practice: approaches based on international standards (OECD)

The workshop is aimed at development cooperation professionals, actors from the microfinance sector, civil society representatives, and anyone wishing to deepen their understanding of this instrument and the associated standards, risks, and frameworks.

https://etika.lu/nos-evenements/deconstructing-finance/