The Microfinance Contagion Scenario
Harvard Business Review
JUNE 10, 2011
So far, the Andhra Pradesh (AP) microfinance crisis has largely been viewed as a local issue, with relatively little impact beyond AP or India's borders. A large exposure to AP with its abysmal repayment rates is an existential crisis for MFIs in India. In other words, at current repayments rates, any MFI with more than 12% of its portfolio in AP is at risk of insolvency.