Risk assessment | Of Mind and Money

Risk assessment

Microfinance 2.0

Posted on July 18, 2011 by Tara Thiagarajan in Microfinance, The Big Idea, Writing. Comments Off on Microfinance 2.0

The last decade has seen a sensational rise and fall of microfinance in India. After the crisis in Andhra Pradesh (AP) that claimed debt related suicides on account of exorbitant interest rates and high pressure collection tactics, the Reserve Bank of India (RBI) has finally put in place regulations based on the recommendations of the Malegam committee. With massive defaults to contend with and the new regulation that places caps on the rates and spreads, the industry is struggling to find its feet again. Many of the less efficient players are out of luck and out of business. Others are tightening their belts and getting more efficient in their operations. But, is microfinance 2.0 just about process efficiency? Or can it be something greater?

Where it began

Let’s start with the premise of microfinance and what it started out trying to … Read More »