Does microcredit have a darker side? The case of India

Satish Pillarisetti

Entreprendre & innover, 2021, vol. n° 48, issue 1, 51-57

Abstract: The darker side of microcredit in India can be seen in five ways: rapid portfolio growth; unhealthy competition and the poaching of clients; coercive collection practices; opaque functioning; and mission drift. The antidote to this is responsible lending. Responsible lending involves the adherence of MFIs to a broad set of client protection principles as included in the sector?s code of conduct. Enforcement of a code of conduct by self-regulatory organizations, regulators, and lenders will enable the microfinance sector in India to overcome its darker side.

Date: 2021
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