At the Crossroads
Between 2005 and 2010 the microfinance industry saw a spectacular growth trajectory of almost 80 per cent a year, taking it to almost Rs. 25,000 Crore and making it one of the fastest growing industries in India. In October 200, a crisis led by an ordinance in Andhra Pradesh, where much of the lending was concentrated, limited collection methods and resulted in a dramatic drop in repayments. Now, one year later, media reports indicate that the industry has shrunk by 40 per cent. Microfinance is now in dire need of reinvention to emerge as a stable and responsible industry with a strong value proposition for the financial inclusion agenda.