The SKS IPO and the Andhra Pradesh ordinance have suddenly changed everything. Will it be the death knell or will it usher in a reformed and healthy industry? There are three basic facts about micro-finance in India. First, most of what is described as micro-finance industry is actually micro-loans. There is hardly any provision of micro-savings, micro-investments, micro-insurance or micro-pensions. This is mostly because of regulatory reasons, i.e. accepting money...

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...

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...

Among the several resolutions passed on Thursday by the 9th conference of the All India Democratic Women's Association (AIDWA) in Kanpur, one of the most important ones was on the need to regulate microfinance institutions (MFIs), which are exercising an iron grip on poor women debtors in several States of the country. The resolution drew attention to the “spate of suicides as a result of the harassment and strong-arm tactics employed...

Leading micro-lender SKS Microfinance today hinted that it could move the courts if the recent Andhra Pradesh notification prohibiting collection of loan repayments on a weekly basis is not withdrawn.The notification stipulated that the periodicity of repayment by self-help group (SGH) members to MFIs should not be less than a month, even under existing loan agreements.However, microfinance institutions operating in the state have railed against the move."In the event the...