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...

India’s rapidly growing private microcredit industry faces imminent collapse as almost all borrowers in one of India’s largest states have stopped repaying their loans, egged on by politicians who accuse the industry of earning outsize profits on the backs of the poor. The crisis has been building for weeks, but has now reached a critical stage. Indian banks, which put up about 80 percent of the money that the companies...

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...

A fast growing economy is a thirsty economy and India is no exception—with the country’s water supply already under great strain, India must reassess its consumption to meet escalating demands for water to produce food and energy. Business-as-usual water practices cannot remain the same in India as the economy and its demand for freshwater grows over the coming decades. With an astounding 75% of freshwater already used for agriculture in India,...

Indicating the official auditor CAG be permitted to look into the books of public-private partnership (PPP) projects, Prime Minister Manmohan Singh today underscored the need to ensure transparency in these infrastructure schemes. "CAG will play a leading role in ensuring that these new initiatives (PPP) deliver as intended," the Prime Minister said at a function to mark the 150 years of Comptroller and Auditor General of India. "There is a need to...