Sample some data on the microfinance performance in India: According to the data provided by www.mixmarket.org, microfinance in India reached close to 270 lakh active borrowers in 2009, with the average loan size close to Rs 8,000. This translates into total borrowing to over Rs 20,000 crore. Though this number seems large, it represents only 0.3% of our GDP. Thus, large swathes of poor, both in our villages and urban...

There has been a significant pick up in credit flow to industry, services and personal loan segments during the current financial year. However, credit flow to agriculture has declined further, data released by the Reserve Bank of India as part of Macroeconomic and Monetary Developments Second Quarter Review 2010-11 shows. While credit flow to industry was highest at Rs 1,07,386 crore, credit flow to agriculture contracted by Rs 13,481 crore during...

The accusation of ‘coercive' practices to recover the loans has been laid at the doors of some leading players Micro Finance institutions (MFIs) that are for profits are in the news for the wrong reasons. The ‘for profit' MFIs have grown spectacularly in recent times. But along with the large profits have come allegations of sharp practices. In Andhra Pradesh, where such MFIs have a sizable presence, the climate has now drastically...

India's banking industry has thrown its support behind microfinance lenders after weeks of upheaval and confusion. Major banks like the State Bank of India, Standard Chartered and Citi have all agreed to continue lending to microfinance firms. The multi-billion dollar industry was on the brink of a mass default. The banks' support has hung in the balance since lenders became embroiled in controversy in the southern state of Andhra Pradesh. About four weeks ago,...

In a significant step towards foolproof monitoring of micro finance institutions (MFIs) and gaining first-hand information on multiple lending, excessive rural indebtedness and irregularities in the sector, the state government has constituted four working committees that would integrate various databases of SHG bank linkage, ration cards & borrowers' data being submitted by MFIs on a priority. These committees would create and maintain the website on MFIs and also help in responding...