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Indian Microfinance – Infographic from Legatum

Interesting infographic from Legatum on impact of AP ordinance on Indian microfinance industry.

Apart from effective blacklisting of millions of poor women in AP from access to private credit, the ordinance has impacted availability of credit across the country. All in name of protecting the SHG initiative, and backed by suspect claims damages that MFIs were causing.

  • http://www.sequelventures.blogspot.com krish

    …Sad to see the MFI industry biting the dust before it hardly got off the ground…

    While it certainly would have dented the businesses of loan sharks thriving across rural India, the early players in MFI have also demonstrated lack of professionalism in swinging so soon from the `developmental’ plank to *usurious* extreme by hurrying to announce bulge bracket stock options and the like that gave the powerful moneylenders lobby the much needed stick to beat the industry with by telling the government that “but these guys are no different”.

  • Rakesh

    I think the MFI industry needs to come out clean in several aspects. First of all why AP, what was the positive environment there that incubated these companies, and whats negative now. Is it due to lessons learnt over the last few years.
    There has quite a bit of media attention to this industry, not all positive again and not all related to how philanothropic these initiatives are.
    Rural India espacially the advnaced states have seen stable cooperative banking for decades now which also had to come under strong regulation over the years. Any fianancing bodies have to coem under regulation soem tiem or the other.
    It needs an image change, simply blaming regulations will not help.