Vaishnavi Prathap is a Researcher at IFMR Finance Foundation, based in Chennai, India. Her current research focuses on improving the delivery of financial services to low-income households
The rapid growth of microfinance in India has led to concerns about a repayment crisis. Some have tempered these worries by pointing to low delinquency rates. But do low delinquency rates tell the whole story?
Rapid expansion in the microfinance sector has been credited with advancing financial inclusion in India. This paper addresses what might constitute a loan mis-sale and seeks to inform the use of suitability guidelines for lending to low-income households by microfinance institutions, self-help groups, and various banks.
In order for financial products to help people meet their goals, the products need to fit in with a household's natural cash flows and financial situation.
