Last November, Orrick, Herrington & Sutcliffe global finance partner Mary Rose Brusewitz flew to Nicaragua to see for herself where the money raised in a debt offering she helped structure in a pro bono project was going. The microfinance lender introduced Brusewitz, who is fluent in Spanish, to one of its repeat borrowers, a man who had gradually built up a successful food vending business with the tiny loans. Now, the cost of corn was soaring and he was struggling to make ends meet.

The past six months have been marked by twin crises — soaring food prices and a global credit contraction. The former threatens to wreck the budget (and historically low default rate) of millions of small microloan borrowers worldwide, says Brusewitz. The latter has stalled the budding securitization of the microfinance market, which had begun to broaden its investment base.

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