An overwhelming majority of the worlds poor live in the third world countries. Various approaches have been employed in alleviating poverty of which provision of credit that targets the poor is one. Despite the current enthusiasms in applying the concept of microfinance as a poverty alleviation tool in many countries, the risk management aspects of micro-financing should not be overlooked. This paper highlights several incidences of default risks in microfinance industry. The problem identified was that microfinance programs perform scantily because of delay in repayment and high default...