tag:blogger.com,1999:blog-7182576430045656062.post1248806688174381826..comments2024-02-25T13:47:07.003+05:30Comments on Candid Unheard Voice of Indian Microfinance: Is Micro-Finance India’s Sub-Prime...???Ramesh S Arunachalamhttp://www.blogger.com/profile/09264606020720529040noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7182576430045656062.post-91445143596723540692010-12-03T16:40:48.281+05:302010-12-03T16:40:48.281+05:30May I suggest that the main problem with microfina...May I suggest that the main problem with microfinance (and not just Indian microfinance) is that it focuses on the wrong product, the poorer you get. The ultra-poor are a lot more interested in savings than they are in credit, because of the risks associated with easy debt. But MFIs have a business model that requires a revenue stream (the more so the more the markets get involved), so they need to focus on credit. Until the industry recognises that ideal MF clients (for credit) are already established small businesses that want to grow and that the ultra poor run risks with these products, this hand-wringing will only go on. It may be hard for the MF industry to confront this honestly, when so much is at stake, but it is becoming daily more necessary.Hugh Allenhttp://www.vsla.netnoreply@blogger.comtag:blogger.com,1999:blog-7182576430045656062.post-61771677526842707282010-12-03T15:02:04.864+05:302010-12-03T15:02:04.864+05:30Dear Sir
Agreed and you point is well taken. But...Dear Sir <br /><br />Agreed and you point is well taken. But the issue is when the same becomes excessive<br /><br />Please see this post<br /><br />http://microfinance-in-india.blogspot.com/search/label/Coercive%20Repayment<br /><br />Thanks<br /><br />RameshRamesh S Arunachalamhttps://www.blogger.com/profile/09264606020720529040noreply@blogger.comtag:blogger.com,1999:blog-7182576430045656062.post-74107578545565563732010-12-03T13:03:57.110+05:302010-12-03T13:03:57.110+05:30Agree with most parts of this well-written blog.
...Agree with most parts of this well-written blog.<br /><br />But this "coercive practices" is something that I fail to fathom. I'm just back from a recent visit to Kurnool in AP. Anybody who has been to a village will know that there is a strong community feeling (especially from among the same caste). They women told me that if a group member fails to repay, the others would come together to help her out. The others would stop helping only if this person is a habitual defaulter or if they know that the money has not been well-spent. Only after 3-4 such defaults, when others stop helping, the member feels the pinch.<br /><br />But then, isn't it precisely the "social collateral" on which the JLG model depends? And the JLG model itself is not being faulted (considering that NABARD and other banks are experimentg with it). Then why blame the MFIs?Balajee Genoreply@blogger.com