The Microfinance Contagion Scenario
Harvard Business Review
JUNE 10, 2011
In other words, at current repayments rates, any MFI with more than 12% of its portfolio in AP is at risk of insolvency. Indeed, the banks involved in rescheduling debt for Indian MFIs are demanding that the MFI management teams pledge all their existing equity and are refusing to make any new loans. 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.