The microfinance industry, which up to now has been one of the great triumphs out of the many anti-poverty and social justice campaigns created to help third world nations, is suddenly facing what appears to be imminent collapse in India.
Do any of these circumstances sound familiar?
Initially the work of non-profit groups, the tiny loans to the poor known as micro-credit once seemed a promising path out of poverty for millions. In recent years, foundations, venture capitalists and the World Bank have used India as a petri dish for similar for-profit "social enterprises" that seek to make money while filling a social need. Like-minded industries have sprung up in Africa, Latin America and other parts of Asia.But micro-finance in pursuit of profits has led some micro-credit companies around the world to extend loans to poor villagers at exorbitant interest rates and without enough regard for their ability to repay. Some companies have more than doubled their revenues annually.
To read the full, original article click on this link: Indian 'microfinance' system on the brink of disaster (Wizbang)
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