MICROCAPITAL BRIEF: MicroSave Survey: Reliance on Loan Sharks High, Microfinance Repayment Rates Low in Andhra Pradesh, India

The downturn in the microfinance industry in the Indian state of Andhra Pradesh has resulted in brisk business for traditional moneylenders according to a study entitled “What are Clients doing Post the Andhra Pradesh MFI Crisis?” from MicroSave, a microfinance advisory firm with offices in India, Indonesia, the Philippines and Uganda. MicroSave surveyed 340 borrowers and found that 59 percent of the respondents stated that they have taken loans from moneylenders in the absence of loan availability from microfinance institutions (MFIs); In 37 percent of the respondents said that they relied on self help groups (SHGs); and 29 percent reported using “daily finance corporations”, which are similar to moneylenders. Repayment rates to MFIs in the region have also fallen between five and ten percent and no one is investing in new businesses.

By Ariana Malushi, Research Associate

MicroSave.org: “What are Clients doing Post the Andhra Pradesh MFI Crisis?”
http://www.microsave.org/research_paper/what-are-clients-doing-post-the-andhra-pradesh-mfi-crisis

Livemint.com: “MFI crisis helping loan sharks in AP”
http://www.livemint.com/2011/11/30215419/MFI-crisis-helping-loan-sharks.html?atype=tp

MicroCapital.org Story, December 20, 2011, “MICROCAPITAL BRIEF: Stymied by Local Regulation, Microfinance Institutions (MFIs) based in India’s Andhra Pradesh Expand Into Northern States”
https://www.microcapital.org/microcapital-brief-stymied-by-local-regulation-microfinance-institutions-mfis-based-in-indias-andrha-pradesh-expand-into-northern-states/

MicroCapital.org Story, December 22, 2009, “MICROCAPITAL BRIEF: Traditional Moneylenders Gain as Microfinance Industry Grows in India”
https://www.microcapital.org/microcapital-brief-traditional-moneylenders-gain-as-microfinance-industry-grows-in-india/

MicroCapital.org Story, October 11, 2011, “MICROCAPITAL BRIEF: Supreme Court of India Sends SKS Back to Andhra Pradesh High Court to Challenge Microfinance (Regulation of Moneylending) Act of 2010” https://www.microcapital.org/microcapital-brief-supreme-court-of-india-sends-sks-back-to-andhra-pradesh-high-court-to-challenge-microfinance-regulation-of-moneylending-act-of-2010/

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

Similar Posts: