Dorotea, a thirty-something one-woman ceramics entrepreneur based in the remote forests of Peru, knows all about the global financial crisis. She might not be familiar with the intricacies of Lehman Brothers’ demise in 2008, nor with the succeeding slew of regulations intended to fix a broken banking system. But she knows she is lucky. If she were trying today to get the loan of 1,200 sol for a new kiln that she secured a few years ago, she would be disappointed.
Like virtually every bank worldwide, her micro-lender, Mibanco, has had to reduce the risks to which it is exposed, and is no longer granting credit to poverty-stricken businesspeople such as Dorotea. “We’re still lending,” says her local manager. “But we’re looking for lower risks – not so poor, not so micro.”
Three years after the depths of the worst financial crash in eight decades, it is clearer than ever that the crisis many thought ended two years ago is dragging on – and in some ways, particularly in the US and across the eurozone, intensifying. Businesses and politicians say credit is either unavailable or too expensive. Banks complain that profits are being squeezed so hard that investors are deserting them. Regulators, stranded in the middle, are left wondering whether their natural crisis response – to draft tough new rules – is building a stronger system as intended or rather exacerbating the problems of a fragile global economy.
