By market standards, the SKS IPO is a great success. Institutional investors have over-subscribed their allocations by 13 times, and the company’s valuation of USD 1.5 billion came in at the top end of the offer band price.
As the Indian microfinance sector responds to the Andhra Pradesh crisis, an opportunity has been created in India, as well as in the global sector, to reevaluate their “people practices” and make them a core part of a system that has provided a safety net for millions.
While the origins of mass defaults may be rooted in cultural and political considerations, in this post we focus solely on customer behaviour and the lending practices of MFIs that operate in these towns.
Events of 2009 in the Kolar district in Karnataka, a state in southern India, offer a valuable case study for the microfinance sector because they show the complex intersection between cultural and social factors and household financial decisions.
Important reforms are taking place today aiming to strengthen confidence and responsible practices in (micro) finance. However, financial authorities are not the only ones making efforts to build effective and complete frameworks to ensure responsible finance.