Microfinance industry itself took some hard knocks. Asset under management (outstanding loans or gross loan portfolio) fell Rs 3,000 crore to close at Rs 20,500 crore in 2011-12. MFIs that had large-scale operations in AP suffered the most. Non-repayment of loans by borrowers (at the behest of politicians and other community leaders) resulted in AP portfolios of most MFIs declining by 35%.
“Post the AP crisis, there was a massive overhauling of practices. MFI were brought under strict rules and regulations,” says Bindu Ananth, chair of IFMR Holdings, a leading financial inclusion platform. Microfinance, which was skulking in the corners of that unprecedented crisis, is now out and about. Of the 10 small finance bank licences given by RBI in 2015, eight were bagged by MFIs. And a bunch of MFIs are now preparing to launch IPOs.
For more on this story visit the following link: Microfinance Industry is Out of an Unprecedent Crisis, Thanks to Regulations & Diligent Borrowers
Source: The Economic Times