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...

Karnataka is expected to be one of the first beneficiaries of a major subsidised housing programme ‘Rajiv Awas Yojana' for the benefit of the urban poor to be taken up by the Union Government. Bangalore with 577 slums and with a population of nearly 10 lakh living there will stand to be the biggest beneficiary. To begin with, people residing in a total of 3.05 lakh dingy structures or thatched huts in...

The poster boy of microfinance is now seeking some anonymity. In Andhra Pradesh, the epicentre of the worst crisis faced by microfinance in India, SKS Microfinance is playing down its identity and going into preservation mode. At its modest office in a residential colony in Warangal district, India’s largest microfinance company has taken down its board. At its head office in upmarket Begumpet in Hyderabad, it hung a cloth mesh...

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,...

Even before the Reserve Bank of India (RBI) finalizes the guidelines for handing out new bank licences, its draft proposal has evoked unease in the National Bank for Agriculture and Rural Development (Nabard), which oversees the country’s 82 regional rural banks (RRBs). Nabard has taken exception to the banking regulator’s proposal to allow industrial houses to take over RRBs and convert them into full-fledged banks, saying such a move could dilute...