AbstractThis article empirically analyses the reasons for crises in microfinance institutions (MFIs), using a sample of 832 MFIs from 74 countries for the period 2003–2011. The methodology used is logit analysis with panel data. The main results show that both internal and external factors influence the probability of a crisis. We find different factors that reduce the likelihood of a crisis (company's performance, country's economic growth, political stability, and existence of a private credit bureau). On the other hand, excessive liquidity, a higher proportion of deposits over loans and more loans per employee all increase the probability of a crisis. Copyright © 2015 John Wiley & Sons, Ltd.