too many MFIs?

Cristina and I were talking the other day about the possibility of there being too many MFIs in a city/country/region. I found this post on Roodman's blog about this actually happening in El Salvador. Also on this point, here is a paper I have been meaning to read about how rising competition among MFIs affects client behavior. According to the abstract the authors found that competition has a negative effect on repayment rate as borrowers tend to start taking out multiple loans, but contrary to their hypothesis they don't find an increase in the client dropout rate.