The media in recent weeks has been full of news – perhaps it’s more appropriate to call much of it “opinion” – about the state of microfinance in India and Bangladesh. A casual glance at headlines would seem to indicate that, for the microfinance sector, the sky is falling over south Asia. Indian microfinance institutions (MFIs) in the state of Andhra Pradesh (AP) have been embroiled in controversy about loan-collection practices … politicians in AP looking to curry favor with the public have urged borrowers not to make payments on their loans … the state government in AP has passed a restrictive law that has brought lending to a standstill … even Nobel Prize winners Professor Muhammad Yunus and Grameen Bank are fighting accusations of improper financial transactions and rumors of Prof. Yunus’s resignation as Managing Director.
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