microfinance

Why is microfinance suddenly in the news for the wrong reasons?
First it was the suicides in AP and now the Grameen Bank and its tussle with the Bangla Desh govt.
Apart from the problems created by the collection methods, finance to SHGs is being attacked with the contention that it has social repurcussions-- one woman says that since she could not pay back her loan on time, her relationship with her group members is strained. That's serious in a village. There is the contention that some people take microfinance and buy themselves luxury goods instead of using it to start some enterprise. They are then not earning enough to repay. This leads to mounting debt and suicide.
There is the AP court ruling ordering regulation of these MFI.
However, how has Ela Bhatt managed her SEWA for so many years, growing to great heights without any such controversy?
It is difficult to know what is hype and what is true about the current crop of MFI.