Microfinance has had a star billing as one of the most popular development policies of the last two decades. But crisis has struck the Indian state of Andhra Pradesh, the hub of the country's multibillion dollar microfinance sector. Events are being followed closely after the state legislature passed a controversial law to regulate microfinance firms.
To critics, the law represents a disastrous politicisation of the microfinance industry, which will effectively authorise mass defaults and could cripple the sector; already, collections of dues has fallen to below 10%.
To backers of the law, it's an attempt to rein back the worst excesses of an industry which, it is claimed, is charging exorbitant interest and is responsible for an increasing number of suicides because of heavy-handed debt collection methods.........click for more
Source Web Page: guardian.co.uk