The largest crisis in the history of microfinance is now unfolding in India. After five years of growth so fast it has been described as “indescribable,” and after a lucrative initial public offering (IPO) by the leading firm, the government of the state of Andhra Pradesh has cracked down. Amid reports of microcredit-linked suicides, the state has urged borrowers to stop repaying, and millions have heeded the call. Bankruptcies of some of the world’s largest microcreditors are now a realistic possibility.
What is the reality of microcredit in India? Is the backlash an engineered campaign to protect a government-run (and World Bank–financed) finance program from private-sector competition? Or has the fast growth in credit ensnared the poor in debt? Some of each?
And what lessons does the crisis hold for actors worldwide, including microfinance institutions and investors ranging from the World Bank to Kiva users? When is microcredit—and investment in it—too much of a good thing?
Featuring
David Roodman
Senior Fellow, Center for Global Development
Stephen Rasmussen
Technology Program Manager, CGAP, World Bank
Swaminathan Aiyar
Consulting Editor, Economic Times
Contributor, Times of India
Research Fellow, Cato Institute
Liliana Rojas-Suarez
Senior Fellow, Center for Global Development
Beth Rhyne
Managing Director, Center for Financial Inclusion, ACCION International
Moderated by
Lawrence MacDonald
Vice President of Communications & Outreach, Center for Global Development