The smallest loans in our economy are going bad again as lenders look for profits in a sector that was said to have been created to help the poorest
Small loans were supposed to save the world. And the Andhra Pradesh microfinance crisis of 2010 was supposed to be a cautionary tale. But, yet again, the Reserve Bank of India (RBI) has had to sound an alarm about more and more small borrowers being unable to pay off their debt. “The microfinance sector is showing signs of stress,” the RBI said in its latest report on the economy’s financial stability, and that these “pockets of stress” need “close monitoring”.