SKS Microfinance, the largest Microfinance institution (MFI) in India, on Friday said that its balance sheet was healthy and did not resort to any emergency funding, as Orissa, following Andhra Pradesh, said it would look into the MFI's business processes in the state. It also said, through a release, that it was confident that "the regulation will actually strengthen the industry and benefit well funded, ethical lenders like SKS." The release...
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Microfinance: India considers rate cap on loans to poor by Amy Kazmin
In India, commercial banks, both public and private, are required to direct a large chunk of their net credit to designated “priority sectors” seen as having a positive impact on India’s economy, and wider society – to ensure funds flow into areas the government deems important, but might otherwise be neglected. These sectors – designated by the Reserve Bank of India – currently include broad areas of agriculture, small scale industries,...
More »New loan sharks by S Nagesh Kumar
The rural poor in Andhra Pradesh, a State showcased as a model for SHG-bank linkage, are caught in the vortex of Microfinance. WITHIN a decade of their coming into operation, Microfinance institutions (MFIs) have dealt a serious blow to the economy and the well-being of thousands of families in rural Andhra Pradesh. Harassment by their collection agents has allegedly driven at least 60 borrowers to death, and the number is...
More »India’s micro vision by Samar Halarnkar
Time magazine picked him as one of 100 people shaping our world. Today, he’s held responsible for bringing an exciting, inspirational business into disrepute. Oh, and his wife says he beat her and snatched their son. There could not be a more controversial torchbearer than Vikram Akula for an industry as quintessentially Indian as Microfinance, the business of providing the poor with loans, as small as R5,000, secured not with...
More »A cut above the rest, MFIs in East ease borrowers’ pain by Atmadip Ray
Amid the heat and dust over high interest rates charged by Microfinance institutions and reports of coercive recovery methods by some lenders in Andhra Pradesh, MFIs in eastern India are trying to strike a more cordial note with borrowers by lowering interest rates. At least three MFIs based out of Kolkata are on the verge of slashing lending rates by nearly 500 basis points to 19.1% per annum, on reducing balance...
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