Can india’s MFI industry be saved?

Andhra Pradesh, India’s fourth largest state by area and fifth largest by population, has set a world record. About 9.2 million borrowers in the southern state have defaulted in repaying money borrowed from microfinance institutions (MFIs)—the largest number of defaulters in any location in the world. As Andhra Pradesh has a population of 84.6 million (2011 census provisional figure), theoretically one in every 11 Andhraites is a defaulter. This, however, is not the actual case as most such borrowers have more than one account.

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