Taking Stock in India

The passage of time, the approach of the end of the year, and the ongoing review of microfinance regulation by the Reserve Bank of India--appointed Malegam committee seem to have prompted people to sum up what happened in Andhra Pradesh and extract lessons. E.g.:

• N. Srinivasan's letter to the Malegam committee.
• Ramesh Arunachalam's review of the events, with high-resolution data on financing I haven't seen elsewhere.
• MicroSave's quartet.
• A 5 point call for change from Bindu Ananth and Nachiket Mor, the dissident voices for the view that "the AP crisis was brought on primarily by the Ordinance that restricted the ability of MFIs to collect on the loans they had made." (Sure it was the trigger, but I am not persuaded it was the main deep cause.)
• Abhijit Banerjee's opinion piece warning that India could go the way of Brazil in 1980 unless it deemphasizes the populist politics that led, for example, to the attack on Andhra Pradesh's microcreditors.

The great attraction of loan write-offs just before elections is that unlike most government programmes, they get to the intended person, fast---the bank just takes your loan off its books and it is done. This is also why an embattled chief minister might want to tell his constituents that they no longer need to repay their 'unjust' microfinance loans. It might cross the politician's mind that next time there will be no loans to write off and that one day people may start to rue the fact that no one except the moneylender wants to lend to them, but right now they have a job to hold on to.