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When Mama Atiya's husband died in 2006, her in-laws claimed the family property, a patriarchal tradition in the Democratic Republic of the Congo. Wholesaling smoked fish eventually provided her and 10 children (four adopted) a home, food, and schooling.

Atiya's entrepreneurial success originated with a $55 loan from Hope International, a Lancaster, Pennsylvania, microfinance ministry. Yet despite the promise of microfinance—including a 2006 Nobel Peace Prize for pioneer Muhammad Yunus—the worldwide interbank lending squeeze is expected to decrease the number of loans extended during 2009.

The fourth-quarter credit crunch forced Opportunity International to cut its 2009 forecast of 30 percent growth in half. World Vision's microfinance arm, Vision Fund, slashed its projected increase from 47 to 15 percent, meaning 200,000 entreprenuers will lose the opportunity to grow their businesses. And year-end giving—which was forecast to decline seriously—could force further adjustments.

"As financial institutions are struggling with their liquidity, they have less money to lend to microfinance institutions, which in turn means we have less to lend to the poor," said Joanna Wasmuth, communications director for Vision Fund.

Although many Christian microfinance organizations use donations to fund initial start-ups, they also use bonds, short-term loans, and other financing to fund loan pools.

"Our model … is leveraging donations," said Wasmuth. "One dollar that may be donated may be leveraged and become two or three dollars that we are able to lend."

As tighter credit markets squeeze several organizations, so does the reality that more microfinance organizations are tied to banking systems. "Increasingly they are becoming more formalized and regionalized by central banks," said Covenant College professor Russell Mask, author of two books on Christian microfinance. "So they are more connected."

"It's harder to get intermediate and long-term loans," said Ken VanderWeele, president of Opportunity Transformation Investments, which operates 17 banks in 16 nations. "These markets have really dried up. As we look at funding our first quarter growth [in 2009], we see a huge decline in available borrowed funds."

At the same time, Christian microfinance organizations are somewhat insulated from economic shocks by the nature of their operations. In addition to ongoing donations, loan repayments fund additional loans, creating self-sustaining momentum.

And some see a positive impact from the economic pinch. Amid Treasury bills' short-term yields sliding beneath one percent last fall, Hope president Peter Greer said several investors told him that the Hope fund's 3 percent return has been one of their best recent investments. Greer said his 10-year-old organization completed its first-ever private placement (an investment not offered to the general public) of $2.8 million last September, and recently embarked on another capital campaign to raise $6 million in private investments.

"We're finding that family foundations and [other] funds are targeting more of their resources toward microfinance investments," Greer said. "So I see [the financial crisis], in some sort of crazy way, as a very positive impact to hopefully channel more resources into the field."

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January 2009, Vol. 53, No. 1